Background
see 4.1
Summary
Precedence of the Agreement on the Free Movement of Persons between Switzerland and the EC over federal law: ruling of 9 May 2007 in the case of State Secretariat for Economic Affairs v C. (BGE 133 V 367)
Swiss unemployment insurance law establishes a right to compensation in the event of unemployment accruing to insured persons who have become unemployed. On an exceptional basis, insured persons may also claim benefits who were unable to pay the insurance premiums because of prolonged work incapacity due to illness and are unable to find employment when they regain their ability to work. With a view to the entry into force of the Agreement on the Free Movement of Persons between Switzerland and the EU and its member states, the Swiss legislature amended domestic law and added the requirement of Swiss residency during the period of work incapacity as an additional legal condition of eligibility for benefits. The Federal Supreme Court had to decide whether a Swiss national who had not resided in Switzerland during the period of work incapacity (for health reasons) was nevertheless entitled to unemployment benefits. The residency requirement under national law conflicted with the prohibition of discrimination under the Agreement on the Free Movement of Persons stating that a worker who is a national of a Contracting Party (thus including Swiss nationals) shall enjoy the same tax and social security advantages as domestic workers. The Federal Supreme Court found that an exemption from the obligation to pay contributions amounts to a privilege within the meaning of the Agreement on the Free Movement of Persons. The Swiss residency requirement can be a permissible instrument to confirm a real connection with the Swiss labour market, but in the case under review it was found to be neither objectively justified nor appropriate because the claimant had been employed in Switzerland before work incapacity occurred. It thus had to be decided whether the Agreement on the Free Movement of Persons took precedence over national law, which the Federal Supreme Court upheld. The right of free movement of persons is of human rights significance, which in itself speaks in favour of the primacy of the Agreement on the Free Movement of Persons. The other contracting states would likewise have to recognize the Agreement’s primacy over their own national law because the Agreement on the Free Movement of Persons has a high degree of democratic legitimacy, it was argued, as it was adopted by referendum and is not in conflict with principles of the Swiss legal system. Finally, the Agreement on the Free Movement of Persons implies primacy as individuals falling within the scope of persons covered by the Agreement can appeal against alleged violations of the Agreement, which logically requires that Agreement to take precedence over domestic law.
