Division of a settlement payment into wage replacement and damages as well as calculation of the creditable loss of work in cross-border unemployment insurance

Facts

The insured person (born 1963) was employed as a trainer by the employer in France from 1 July to 12 December 2021. His place of residence and domicile were in Switzerland. On 13 December 2021, he was dismissed without notice by the employer and on 27 December 2021, the employment relationship was terminated due to alleged serious misconduct by the insured person. The last salary payment was made on 12 December 2021. On 3 January 2022, the parties concluded a settlement agreement under which the employer undertook to pay the insured person compensation of EUR 100,000. On 4 March 2022, the insured person registered with the employment agency and on 10 March 2022 with the unemployment insurance fund.

The unemployment insurance fund of the Canton of SocRA rejected the entitlement claim for the period from 13 December 2021 to 12 October 2022 due to a lack of creditable loss of work with a decision dated 15 June 2022. The appeal decision of 28 February 2023 confirmed the rejection for the period from 13 December 2021 to 4 October 2022, but opened the reference period for benefit entitlement from 5 October 2022. The Administrative Court of the Canton of SocRA amended the appeal decision with a judgment of 3 April 2024 by recognising the entitlement claim as of 25 May 2022. In all other respects, it dismissed the appeal.

Both the unemployment insurance fund (8C_254/2024) and the insured person (8C_266/2024) filed appeals in public law matters against this judgment. The unemployment insurance fund requested the annulment of the judgment and a ruling that the entitlement claim be rejected for the period from 13 December 2021 to 28 September 2022 (subsidiarily until 13 July 2022). The insured person requested the annulment of the judgment and an order for the unemployment insurance fund to pay unemployment benefits for the period from 13 December 2021 to 24 May 2022. The insured person also requested the joinder of the two appeal proceedings.

Considerations

The Federal Supreme Court joined the two appeal proceedings pursuant to Art. 97 para. 1 FSCA, as they were based on the same facts and concerned connected legal issues. It examined the appeals for violations of federal law, in particular Art. 11 para. 3 UIA, and based its review on the facts established by the lower court. There was no obvious inaccuracy in the establishment of the facts, as the lower court had substantiated its assessment of evidence in a comprehensible manner.

The central issue in dispute was the qualification of the settlement payment of EUR 100,000 as a compensation claim within the meaning of Art. 11 para. 3 UIA. The lower court divided the payment into a wage replacement component (EUR 97,500) and a component for damages for damage to image, moral and reputation (EUR 2,500). The insured person objected to the arbitrary determination of the damages component, as the sources of the SECO for the amount of EUR 2,500 were not disclosed and the settlement agreement of 3 January 2022 designated the damage to image as the main purpose of the payment. The Federal Supreme Court held that the lower court had arbitrarily determined the damages component, as it relied on unverified internet research by the SECO and ignored the clear wording of the settlement agreement. In addition, the insured person had admitted contributory negligence in the cantonal proceedings with regard to the dismissal without notice, which had to be taken into account in the reassessment of the damages component.

The unemployment insurance fund further…