• Switzerland's news in English

Cargo firm slammed for 'discriminating' against EU workers

Meritxell Mir · 20 Oct 2011, 15:00

Published: 17 Oct 2011 15:00 GMT+02:00
Updated: 20 Oct 2011 15:00 GMT+02:00

Facebook Twitter Google+ reddit

Farnair, a small cargo airline based near Basel, has decided to reduce the salaries of its cross-border workers by 10 percent and pay them in euros, in a move slammed by unions and experts as "discriminatory" and "xenophobic".

"They convert the salaries into euros calculating them with a fantasy exchange rate," Hans Hartmann at Unia, the largest Swiss trade union told The Local on Monday.

The move will affect around half of Farnair's 144 employees with those living in Switzerland retaining the same salaries. Unions have reacted angrily to the move and Hartmann called the practice of differential pay rates illegal, arguing that it violated bilateral agreements with the EU.

He added that while there have been a few cases of companies paying their cross-border workers in euros in response to the recent appreciation of the franc, he denied press reports that it is a "growing problem". 

Farnair announced the measures in an October 4th email sent by chief executive, Guy Girard.

The airline, based in Allschwill in northern Switzerland, justified targeting workers living in France and Germany by arguing that cross-border commuters possess greater purchasing power than their co-workers living in Switzerland.

Farnair cited the lower cost of living in neighbouring countries, allied with a dramatic increase in the value of the franc, which has risen by 20 percent against the euro over the last 18 months.

To support its arguments, Farnair cited a study conducted by the UBS bank entitled "Wealth management research, prices and earnings". First published in 2009 and updated in August 2011, the report says living expenses in Switzerland are currently 30 percent higher than in neighbouring European countries.

But trade unions and employment experts said Farnair’s decision to cut the salaries of cross-border workers was discriminatory and against the law.

“This is illegal by all means because it is discriminating,” Thomas Geiser, professor of labour law at Sankt Gallen University, told The Local, explaining that "bilateral agreements with the European Union do not allow Swiss companies to pay European workers less than Swiss workers.”

This view is supported by René Zurin, head of the VOPD union's civil aviation sector. “What counts is the place of work, not where people live,” he said.

Francisca van der Meer, head of Shared Services at Farnair Europe, however disagreed that the firm had done anything wrong.

“We did not want to cut everyone’s salary by 10 percent without looking into their buying power, because that would be unfair,” she told The Local.

To have done so would have been "discriminatory to our Swiss people or the people living in Switzerland, because they did not get a raise in their buying power of 20 percent [like the ones residing in other European countries],” she said.

One of the company workers affected by the new wage conditions, who asked to remain anonymous, however called the decision “unfair” and “ridiculous” and argued that some of her colleagues living in Switzerland "can, and actually do, buy in Germany or France, therefore also enjoying an increase in their buying power".

"People should not be penalised for where they choose to live,” she told The Local.

Professor Geiser agreed with the criticism of the company's arguments which he described as “simply absurd”. He gave the hypothetical example of a Farnair employee working in Basel, where apartments are quite expensive, but living in Münchenstein, on the outskirts of the city, where housing is cheaper.

“Why don't employers think of paying them less in this case? It is absolutely the same thing, I don’t see a difference."

Geiser argued that the company's underlying motives may extend beyond simply parrying currency exchange costs.

“I think this is xenophobia, and you have a lot of that in Switzerland,” he said.

Three months after the company’s notice, cross-border employees are set to see their salaries cut by 10 percent and converted into euro using a fixed exchange rate of 1.21 francs per euro.

“It is either this, or we have to leave Switzerland and then everybody loses his or her job,” warned van der Meer, who said that 99 percent of the company’s income is in euros whereas 95 percent of outgoings are in francs.

The letter states that "Farnair assumes full currency risk" so "employees receiving their wages in euro do not have to fear any currency-related loss of buying power in the future should the position of the Swiss franc weaken.”

Those not willing to sign up to the new conditions will lose their jobs.

While experts concur that cutting the salary of only part of the workforce based on their place of residence is illegal, there is no such clear agreement when it comes to paying in euros instead of Swiss francs.

Geiser said it was legally permissible, but the unions are continuing to fight against a measure being considered by several firms that point to the superior purchasing power of cross-border workers.

Over the summer, Unia handed over a petition to the government asking it to forbid the payment of salaries in euros, having collecting 18,000 signatures in previous weeks.

But on September 16th the Federal Council decided not to ban the practice, although the final word will be reserved for the courts.

“It is just the Council’s opinion, because it is the courts that have to decide the matter,” said Ewald Ackermann, spokesperson for the Federation of Swiss Unions (USS).

Meritxell Mir (news@thelocal.ch)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Montreux throws hat in Olympic rings
Could Montreux host the 2026 Games? Photo: Ivo Scholz/Swiss Tourism

Montreux is to put itself forward as the host city for the 2026 winter Olympics as part of a potential bid by the cantons of Valais and Vaud.

Geneva car share scheme could help reduce city traffic
Catch a Car is aimed at short hops within a city. Photo: Catch a Car

Catch a Car, already in Basel, launches in Geneva next month.

Swiss women will ‘work for free’ for the rest of year
Female employees in Switzerland earn 19.3 percent less than their male colleagues. File photo: Randy Kashka

Switzerland's gender pay gap means from today, Friday October 21st, women in the country will effectively be working for free for the rest of 2016.

Swiss luxury watches stolen in Paris raid
Police outside the Girard-Perregaux watch store on Thursday. Photo: Bertrand Guay/AFP

The 10 Girard-Perregaux watches are worth half a million euros in total.

Brother-in-law arrested over murder of Swiss teacher
The victim worked in a school in Stabio, near the town of Mendrisio. Photo: Oliver Graf

The primary school teacher was found dead in Ticino earlier this week.

Inside Switzerland’s largest nuclear bunker – 40 years on
Designed to house 20,000 people, the bunker was built in and over two motorway tunnels. Photo: Unterirdisch Ueberleben

The Local takes a tour of the Sonnenberg bunker in Lucerne, opened 40 years ago at the height of the Cold War.

Ten Swiss ski resorts named most expensive in Europe
File photo: Renato Bagattini/Swiss Tourism

Skiers in Switzerland pay the highest prices for their ski passes of anywhere in Europe, according to research.

Eco group fights Bern over wind farm plans
There are currently more than 30 wind farms in Switzerland. Photo: Alpiq

Wind turbines are “gigantic and destructive” machines, says Paysage Libre Suisse.

Vegan wins battle to be accepted by Swiss army
Antoni Da Campo will now carry out his military service. Photo: Antoni Da Campo

A Swiss man who was told he would not be accepted for military service because of his strict veganism has finally succeeded in making the army change its mind.

Geneva terror suspects to receive compensation
File photo: Emran Kassim

The Swiss public prosecutor has dropped the case against them.

Sponsored Article
How to vote absentee from abroad in the US elections
Photo: Richard Juilliard/AFP
Man makes Geneva airport bomb threat ‘for a joke’
Sponsored Article
Last chance to vote absentee in the US elections
Photo: AFP
Solar Impulse team reveals plans for unmanned plane
File photo: Martin Abegglen
Swiss to vote on passport rules for 3rd gen foreigners
Sponsored Article
How to vote absentee from abroad in the US elections
Photo: AFP
Swiss wingsuit hotspot Lauterbrunnen won’t impose ban
Photo: Swiss Tourism
Six reasons Switzerland isn’t as boring as you might think
Photo: Swiss Tourism
Report: Switzerland one of world’s best places for girls
Photo: The Local
Thief returns Swiss cow bells worth thousands
File photo: Wikimedia Commons
One in three rapists isn’t locked up: statistics
Photo: activistin.ch
Tampon-tax protest turns Zurich fountains red
Photo: AFP
Geneva police to lift ban on bearded officers
Photo: Marcel Gillieron/AFP
Suicide chef’s restaurant keeps Michelin stars
Photo: Lara de Salis
11 things the Swiss get tired of hearing abroad
Photo:  Ivo Scholz/Swiss-image.ch
Survey: expats in Switzerland have money but few friends
Photo: AFP
Swiss press criticize Bern’s 'capitulation' on immigration
Photo: Jura Trois Lacs tourism
German ex-policeman is Swiss city’s new hermit
Photo: Dmitry A. Mottl
Ticino votes to favour local workers over foreigners
Photo: file
Some deodorants could cause breast cancer: Swiss study
Photo: Royal Savoy
In pictures: Inside the latest Swiss luxury hotel
Photo: AFP
Geneva airport bomb hoaxer faces 90,000-franc bill
Photo: Schaffhausen police
Mother leaves toddler son alone in car to go clubbing
Photo: Fabrice Coffrini/AFP
Swiss populist attacked by knife-wielding pensioner
Photo: File
Bern argues over passports for 3rd generation foreigners
Photo: Broad Bean Media
Muslim pupils must shake hands – ‘no ifs and buts’
jobs available