Internationally operating companies, which are also active in the USA, Great Britain or Australia, are increasingly confronted with claims for compensation from the employer-employee relationship. Legal harmonisation within the European Union – and in Germany in particular through the General Equal Treatment Act (AGG) – has also increased this risk there. In addition to the Federal Constitution, the Swiss Code of Obligations and the Equal Opportunities Act (GLG), the Labour Act (ArG) with regulations on working and rest periods and on health protection forms the basis of employee protection in Switzerland. The five ordinances and the corresponding guidelines accompany the implementation of the ArG.
The EPLI policy provides cover for liability risks arising from unlawful employment practices, such as discrimination based on origin, colour, sex, religion, etc., refusal of promotion, unjustified demotion, transfer, disciplinary measures, misjudgement, etc., sexual harassment in the workplace or unjustified dismissal. In addition to insurance cover, some insurers also support preventive risk management by providing advice in cooperation with specialised law firms.
Although the risk of being sued as an employer as a result of EPLI lawsuits remains much higher in the US than in most countries, awareness of the employer’s obligations to protect its employees and treat job applicants fairly has increased in recent years, and with it the relevance and demand for EPLI policies.