Planning for the Christmas vacations is already in its final stages for many. This raises the question for some whether one could not avoid the cold season a little longer.

Case study

Peter Myer is Senior HR Business Partner at Pharma AG in Basel since 5 years. He holds both German and South African citizenship. He has lived in Switzerland for over 10 years. His parents still live in Cape Town (South Africa).

He is thinking about extending the 2 weeks he normally spends in Cape Town over Christmas to 6 weeks. However, he does not want to take unpaid leave or use up all his vacation days for this. Instead, he would like to work from South Africa for 4 weeks (January 1 to January 31).

His father has to have an operation and he would like to be on site in South Africa during this period.

Question

With his request, he goes to the Global Mobility Team to clarify whether this is possible.

Solution

For granting the opportunity to work abroad, it is useful to consider an internal approval process. Here, such a request should first be considered from

  • technical aspects: is there a possibility for the employee to work from the desired destination
  • Work or assignment perspective: does the employee have to be away from the company during this time?
  • or the supervisor's point of view: does the supervisor agree?

should be considered.

Only then should the Global Mobility Team be involved and check the legal aspects.

The above three points have been fulfilled in the case of Peter Myer's wish to work in South Africa. Accordingly, the other legal aspects must now be checked.

Labour law

The mandatory labor law aspects in South Africa must be taken into account during the 4 weeks of work in South Africa. In a comparison between these and those of Switzerland or the employment conditions of Mr. Myer, no adjustment is needed. Only the 1st of January is a public holiday in the month of January, on which Mr. Myer is not allowed to work.

Immigration law

Due to the fact that Mr. Myer has the citizenship of South Africa, he can work in South Africa.

Tax law

There is a double taxation agreement between Switzerland and South Africa. Based on the 183-day rule, Mr. Myer can be exempted from tax liability in South Africa and pays taxes on the complete income in Switzerland.

It is important to note that the tax year in South Africa runs from March 1 to February 28/29.

Permanent establishment

His function at Pharma AG is a managerial function, but his stay is only 1 month. The risk can be classified as low due to his activity on site and the time period.

Social security law

There is no social security agreement between Switzerland and South Africa.

Since he fulfills the 5-year pre-insurance period in the AHV, an application for continuation of the compulsory AHV/IV can be submitted for him to the compensation office or Alps. Based on this continuation, the other branches of social insurance (unemployment insurance, pension fund, accident insurance, daily sickness insurance insurance and health insurance) can also be continued.

However, Mr. Myer should take out supplementary health insurance covering South Africa.

Fazit

The Global Mobility Team can approve the assignment in South Africa after their legal review and only has to submit the application for the continuation of the mandatory AHV/IV as well as inform the employee that he/she additionally takes out an international health insurance cover.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.