Establishing compliant employment relationships in Switzerland requires a thorough understanding of the country's labor law framework. While Swiss law offers significant contractual freedom, certain provisions are mandatory and must be included or respected in any employment agreement. These regulations are primarily governed by the Swiss Code of Obligations (CO), supplemented by various federal laws and, importantly, collective bargaining agreements (CBAs) which can introduce additional requirements depending on the industry. Ensuring your employment contracts align with these legal standards is crucial for smooth operations and avoiding potential disputes.
A well-drafted employment agreement serves as the foundation of the working relationship, clearly defining the rights and obligations of both the employer and the employee. It must reflect the specific nature of the employment while adhering to the minimum standards set by Swiss law and applicable CBAs.
Types of Employment Agreements
Swiss law primarily recognizes two main types of individual employment agreements: the indefinite employment contract and the fixed-term employment contract. The choice between these types has significant implications, particularly regarding termination procedures.
| Contract Type | Description | Key Characteristic | Termination |
|---|---|---|---|
| Indefinite Term | Agreement without a specified end date. | Standard type of employment contract. | Requires notice period (unless for just cause). |
| Fixed Term | Agreement with a predetermined end date or for a specific, defined project. | Automatically ends on the specified date/completion. | Ends automatically; cannot be terminated early unless specified or for cause. |
While these are the primary types, specific arrangements like temporary work contracts (governed by separate law) or part-time contracts (which are typically indefinite or fixed-term contracts with reduced hours) also exist.
Essential Clauses
Swiss employment contracts, regardless of type, must include certain essential elements to be valid and clear. While not all terms are legally required to be in writing for an indefinite contract (some can be agreed verbally), it is highly recommended to document all key terms in writing to avoid ambiguity. Fixed-term contracts for more than one month or for an indefinite duration must be in writing.
Mandatory and highly recommended clauses typically include:
- Parties: Full names and addresses of the employer and employee.
- Start Date: The date the employment begins.
- Function/Job Title: A clear description of the employee's role and responsibilities.
- Workplace: The location where the work is performed.
- Salary: The amount of salary and how it is calculated (e.g., monthly, hourly).
- Working Hours: The agreed-upon weekly or monthly working hours.
- Holiday Entitlement: The minimum legal entitlement is four weeks per year (five weeks for employees under 20). CBAs or company policy may grant more.
- Notice Periods: For indefinite contracts, the notice periods applicable for termination (must meet or exceed legal minimums).
- Probationary Period: If applicable, the duration of the probationary period.
Additional clauses often included cover topics like social security contributions, expenses, confidentiality, intellectual property, and non-compete obligations.
Probationary Period
Swiss law allows for a probationary period at the beginning of an employment relationship. This period serves for both parties to assess the fit.
- Default Duration: The legal default probationary period is one month.
- Modification: The probationary period can be extended by written agreement up to a maximum of three months.
- CBAs: Applicable Collective Bargaining Agreements may stipulate different rules or maximum durations for the probationary period.
- Termination during Probation: During the probationary period, the notice period for termination is typically seven calendar days, unless a shorter or longer period is agreed upon in writing or stipulated by a CBA.
- Absence: If the employee is absent during probation due to illness, accident, or mandatory military service, the probationary period is extended by the duration of the absence.
If no probationary period is explicitly agreed upon in the contract, the default one-month period applies.
Confidentiality and Non-Compete Clauses
Confidentiality and non-compete clauses are common in Swiss employment agreements, particularly for roles involving sensitive information or client relationships.
- Confidentiality: Employees have a general duty of loyalty, including maintaining confidentiality of business secrets during employment. Specific confidentiality clauses in the contract reinforce this obligation and can extend it post-termination.
- Non-Compete (Post-Termination): A non-compete clause restricts an employee from working for a competitor or operating a competing business after the employment ends. For a non-compete clause to be legally enforceable in Switzerland, it must meet several strict criteria:
- It must be in writing.
- The employee must have had insight into the employer's clientele or manufacturing/business secrets.
- The use of this knowledge must be capable of causing the employer significant harm.
- The restriction must be reasonable in terms of time, place, and scope.
- It generally cannot exceed three years.
- It is typically not enforceable if the employer terminates the contract without just cause, or if the employee terminates for a just cause attributable to the employer.
Courts review non-compete clauses critically and may reduce their scope or invalidate them if deemed unreasonable or not meeting the legal requirements.
Contract Modification and Termination
Modifying an existing employment contract requires the agreement of both parties. Unilateral changes by the employer to essential terms (like salary or function) are generally considered a notice of termination with an offer to re-employ under new terms (known as "modification termination").
Termination of an indefinite employment contract typically requires observing statutory or contractually agreed notice periods.
- Notice Periods (after probation):
- During the first year of service: one month, effective at the end of a month.
- From the 2nd to the 9th year of service: two months, effective at the end of a month.
- From the 10th year of service onwards: three months, effective at the end of a month.
- Modification: Notice periods can be extended by written agreement, but they must be the same for both employer and employee.
- Termination for Just Cause: Both parties can terminate the contract with immediate effect for a "just cause," which is a serious reason making the continuation of the employment relationship unreasonable.
- Protection Against Dismissal: Swiss law provides protection against "abusive" dismissal (e.g., dismissal based on discriminatory reasons, during protected periods like illness or pregnancy, or for exercising constitutional rights). Abusive dismissal does not invalidate the termination but can lead to a financial penalty for the employer.
- Fixed-Term Contracts: As noted, fixed-term contracts end automatically on the agreed date and cannot typically be terminated early unless specifically agreed upon in the contract or for just cause. Repeatedly renewing fixed-term contracts without objective justification can lead to them being reclassified as indefinite contracts.
