Workers to be paid in euros due to strong franc

Workers' salaries have come under scrutiny as a result of the strong franc swissinfo.ch

As part of a bid to offset the impact of the surging Swiss franc, companies are resorting to paying employees in euros or handing heavier salary cuts to cross-border workers. But unions warns the practice could be illegal.

Labour unions attest that Graubünden-based road transport company Della Santa informed its employees through an SMS to furnish bank details of a euro account for payment of wages. The company employs around 100 people. Unions denounced the company’s policy, calling it illegal, and also warned that such practices could lead to a more permanent lowering of salary levels.

“Considering that Italy-based workers get a salary hike of 20% compared to the Swiss, we’ve decided to create new work contracts that stipulate an exchange rate of 1.22 francs to the euro,” explained company owner and director Romano Della Santa. However, he added that employees will continue to be paid family support contributions in francs.

Almost half of Della Santa’s turnover is euros. The current exchange rate is a threat to society, said the director, who also fears that layoffs may be on the horizon.

Unions also accuse Italian food packaging company Fabbri, which owns a production centre in Ticino, of slashing the salaries of cross-border workers by 15% and Swiss workers by 5% since the Swiss National Bank’s decision to remove the euro peg. The company employs 500 workers who are based in Switzerland and Italy.

Mathias Regotz, vice president of the Syna union, said that such practices threaten domestic consumption and could spark an economic crisis.

According to a decision made by a Ticino court last summer, paying salaries in a foreign currency is not illegal. However, the court emphasised that the convention of the free movement of people does not allow a cross-border worker to be treated any different from a resident. This also applies to salaries.