1. What types of employment contract are recognised in Switzerland?
In Switzerland the recognised types of employment contract are as follows:
- A fixed-term contract: the duration of the contract relationship is determined by the parties involved.
- An employment contract for an unlimited period: this is the most common type of employment contract, in which the parties do not determine a maximum term (it is open-ended).
- An apprenticeship contract / Vocational Education and Training (VET): only valid in written form, this is a mixed contract in which the employee learns a specific trade or profession through a dual component training system, combining in-company training (the practical component) and a vocational school education (the theoretical and general education component).
2. What are the minimum and maximum terms for which a fixed-term employment contract can be concluded in Switzerland?
There is no minimum or maximum term for a fixed-term employment contract.
3. How can a contract of employment be terminated in Switzerland?
A fixed-term contract ends without notice on the date agreed at the outset. A fixed-term employment relationship tacitly extended beyond the agreed duration is deemed to be an open-ended employment relationship.
After ten years, any employment relationship contracted for a longer duration may be terminated by either party by giving six months’ notice expiring at the end of a month.
An employment relationship for an unlimited period may be terminated by either party. The party giving notice of termination must state his reasons in writing if the other party so requests.
As for seniority, in Switzerland, the ordinary legal retirement age is 64 years for women and 65 years for men.
4. What are the applicable notice periods, and what determines their length?
Notice periods must be the same for both parties.
Notice lengths vary before and after the probation period, which is the first month of an employment relationship up to a maximum of three months. When the probation period is interrupted by illness, accident or performance of a non-voluntary legal obligation (such as military service), the probation period is extended accordingly.
Notice during the probation period
During the probation period, either party may terminate the contract at any time by giving seven days notice.
Notice after the probation period
The employment relationship may be terminated with a notice period of one month during the first year of service, a notice period of two months for two to nine years of service, and a notice period of three months thereafter. All such notice must expire at the end of a calendar month.
These notice periods may be varied by written individual, standard or collective employment contract; however, they may be reduced to less than one month only by collective employment contract and only for the first year of service.
5. Is it possible to employ employees as teleworkers in Switzerland, and are there any particular regulations that apply (differentiating from other regulations)?
In Switzerland teleworking is not subject to any special regulation.
If the employer grants this possibility, a note must be included in the employment contract or in a separate regulation under the heading “Workplace” in which it is specified that this working model is allowed.
It is recommended that the employer establish in writing the following points in the contract:
- duration of telework (number of hours or days weekly);
- rules concerning availability and response times;
- how to record working time;
- prohibition of night work (11.00PM to 6.00AM) and Sunday work;
- instructions concerning home teleworking;
- devices and materials, as well as reimbursement of the same;
- behaviour in the event of technical problems, for example in case it is impossible to work; and
- rules concerning sensitive data and liability.
6. What are the rights for women who become pregnant during their employment contract, and are they protected from being dismissed?
In general, any discrimination based on gender is strictly forbidden. The Swiss law namely prohibits any unjustified discrimination in the hiring procedures, work assignments, working conditions, remuneration, continuing education, the promotion and dismissal of employees owing to gender, as well as any form of sexual harassment. The principle of “equal pay for equal work” relating to men and women has constitutional status.
The Swiss law protects women becoming pregnant during the employment contract from both an economic standpoint and in the event of termination of an employment contract. These conditions are applicable to all employers and all employees involved in an employment contract governed by private law, including part-time employees, apprentices, commercial employees and employees who work at home for their employers. Employees in public services are generally covered by their own statutes, which are wider than ordinary rules.
Employers are required to let pregnant women work in such a way and in such conditions that the health of the latter as well as the health of the child are not put at risk. For example, pregnant women who have to work standing up have the right, from the fourth month of pregnancy onwards, to a daily rest period of 12 hours. In addition to legal breaks, pregnant women are entitled to a short break of 10 minutes after every two hours. From the sixth month of pregnancy, they could be expected to work standing up for at most four hours per day.
Protection from dismissal
After the probation period has expired, the employer may not terminate the employment relationship during an employee’s pregnancy up to sixteen weeks following birth.
Where the employee is prevented from working by personal circumstances for which they are not at fault, such as pregnancy, the employer must pay their salary for a limited time, including fair compensation for lost benefits in kind, provided the employment relationship has lasted or was contracted for longer than three months.
Employees are entitled to maternity leave of a minimum of 14 weeks (or 98 days) after the birth, which is to be taken as one single period. Interruptions are not possible.
During maternity leave, the employee is entitled to 80% of salary in the form of daily indemnities.
The employer may not reduce the holiday entitlement of a female employee who is prevented from working due to pregnancy for up to two months, or has received maternity benefits.
7. What types of paid days-off are the employees entitled to in Switzerland?
The employer must allow the employee one day off per week, generally Sunday or, where circumstances do not permit this, a full weekday instead. In special circumstances, the employer may allow the employee several days off together or two half-days instead of one full day, provided the employee consents to this.
In addition, the employer must allow the employee the customary hours and days off work and, once notice has been given to terminate the employment relationship, the time required to seek other employment.
Employees who are unable to work due to illness generally need to submit a medical certificate as of the third day off work. Employers are required to continue paying employees their full wages for a certain period during illness: the minimum duration is three weeks during the first year of service, thereafter wages are to be granted for appropriately longer periods depending on the duration of the employment relationship and the particular circumstances.
Case law of each Canton has determined how these “appropriately longer periods” are to be interpreted: the so-called “Bernese scale”, elaborated by the superior court of Canton Berne, provides as follows:
- during the first year of employment: 3 weeks of full salary
- second year: 1 month of full salary
- 3 to 4 years: 2 months of full salary
- 5 to 9 years: 3 months of full salary
- 10 to 14 years: 4 months of full salary
- 15 to 19 years: 5 months of full salary
- 20 to 25 years: 6 months of full salary
Other agreements can be reached, but they must be specified in writing for a particular employee (e.g. in their employment contract), in the standard employment contract, or in a collective employment agreement.
Consisting with this latter option, most employers subscribe to an insurance for a daily allowance to be able to pay their employees 80% during prolonged absences due to illness. Wage continuation applies for the duration of the employee’s inability to work, but no longer than 720 days within 900 consecutive days.
The employer must allow the employee at least four weeks’ holiday during each year of service, and five weeks’ holiday for employees under the age of 20. Where an employee has not yet completed one year’s service, their holiday entitlement is fixed pro rata.
The holiday entitlement for a given year of service is generally granted during that year, and at least two weeks of holiday must be taken consecutively. The employer determines the timing of holidays taking due account of the employee’s wishes to the extent that these are compatible with the interests of the business or household.
Where in a given year of service the employee, through their own fault, is prevented from working for more than a month in total, the employer may reduce his holiday entitlement by one-twelfth for each full month of absence.
However, where the total absence does not exceed one month in a given year of service, and is the result of personal circumstances for which the employee is not at fault (such as illness, accident, legal obligations, public duties or leave for youth work), the employer is not entitled to reduce their holiday entitlement.
The employer must pay the employee the full salary due for the holiday entitlement and fair compensation for any lost benefits in kind. During the employment relationship, the holiday entitlement may not be replaced by monetary payments or other benefits.
Leave for extracurricular youth work
During each year of service the employer must grant employees under the age of 30 leave of up to one working week for the purpose of carrying out unpaid leadership, care or advisory activities in connection with extracurricular youth work for cultural or social organisations, and for related initial and ongoing training.
The employee has no salary entitlement during such leave for youth work. An individual agreement, standard employment contract or collective employment contract may provide otherwise to the employee’s benefit.
The employer and employee should agree on the timing and duration of leave for youth work, having due regard for each other’s interests. Where they cannot reach agreement, such leave must be granted on condition that the employee gives two months’ advance notice of their intention to exercise their right. Any leave for youth work not taken by the end of the calendar year is forfeited.
At the employer’s request, the employee must furnish proof of the activities and functions they have carried out in relation to youth work.
8. Is it possible to include a non-competition clause in the employment contract, and what are the grounds for concluding a valid non-competition agreement?
Yes, non-competition clauses are allowed under Swiss law.
Given that such a clause is likely to have an adverse effect on the employee’s economic freedom, it is subject to a number of limitations, relating notably to the type of business concerned, time limits and location.
Formally, the employer will not be in a position to introduce a non-competition clause via an internal regulation. Such a clause has to be expressly convened in the employment contract in written form.
The prohibition must be appropriately restricted with regard to place, time and scope such that it does not unfairly compromise the employee’s future economic activity. In principle, the effects of a non-competition clause may not exceed three years from the end of the employment relationship.
In any case, a non-competition clause which would compel the employee to change his professional activity altogether should be deemed null and void, as it would be considered contrary to public order.
Employee’s waiver after the end of the relationship
An employee with capacity to act may give the employer a written undertaking to refrain from engaging in any activity that competes with the employer once the employment relationship has ended and in particular to refrain from running a rival business for their own account, or from working for or participating in such a business.
Consequences of infringement
An employee who infringes the prohibition of competition must provide compensation for the resultant damage to the employer. Where an employee who infringes the prohibition is liable to pay a contractual penalty, unless otherwise agreed they may exempt themselves from the prohibition by paying it; however, they remain liable in damages for any further damage.
Where expressly so agreed in writing, in addition to the agreed contractual penalty and any further damages, the employer may insist that the situation that breaches the contract be rectified to the extent justified by the injury or threat to the employer’s interests and by the conduct of the employee.
The prohibition of competition is binding only where the employment relationship allows the employee to have knowledge of the employer’s clientele or manufacturing and trade secrets, and where the use of such knowledge might cause the employer substantial harm.
The prohibition to compete is also extinguished if the employer terminates the employment relationship without the employee having given them any just cause to do so or if the employee terminates such relationship for good cause attributable to the employer.
The clause is extinguished as well once the employer demonstrably no longer has a substantial interest in its continuation.
Failure to comply with the above mentioned limitations, or the absence of such limitations, does not, in principle, render the non-competition clause null and void. The judge may, at their discretion, impose restrictions on an excessive prohibition of competition, taking due account of all the circumstances; in particular it will have due regard to any consideration made by the employer.
9. Is the employer obliged to pay compensation for the period of validity of a non-competition clause/agreement after the termination of employment?
A non-competition clause, although common in the practice, is not required to be paired with financial compensation, as such consideration is not a prerequisite to the validity of that clause under Swiss law.
10. What happens to employees if their employer goes bankrupt in Switzerland, and are they entitled to severance pay?
In the event of an employer becoming insolvent or going bankrupt, the public insolvency compensation system covers employees’ open salary claims for a maximum of four months.
However, there is no entitlement to insolvency compensation for people who, in their capacity as a shareholder or stakeholder with a financial interest in the company or as a member of the most senior executive decision-making committee, had a significant impact on the employer’s decisions, as well as their spouses working at the company.
Applications for insolvency compensation must be made by each individual employee to the responsible public unemployment insurance fund within 60 days from the bankruptcy of the employer.
11. Are there any courts specially appointed for the purpose of dealing with labour law matters in Switzerland?
In Switzerland courts are regulated by each Canton according to their own rules.
Therefore, even if the employment law in Switzerland is regulated on a federal level, employment disputes between employers and employees are heard by local cantonal courts. Some Cantons have specialised labour courts while other Cantons only have ordinary civil courts.
12. In the event that an employee is a debtor in enforcement proceedings in Switzerland, to what extent is it possible for a bailiff to seize remuneration?
In cases where an employee is involved in enforcement proceedings, their remuneration can be seized to an extent decided case-by-case by the bailiff – there is no fixed amount. The employee is entitled to the salary necessary to cover their minimum subsistence, as well as their family’s.