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Country snapshot

Key considerations
Which issues would you most highlight to someone new to your country?

In contrast to most other European countries, Switzerland has liberal employment legislation, which facilitates the conclusion and termination of employment relations. The employment relationship is governed by the Code of Obligations and the Labour Act.

While employment agreements may be concluded orally, it is recommended that they be concluded in writing in order to take advantage of the flexibility that the legislation offers.

What do you consider unique to those doing business in your country?

Employers can rely on Switzerland’s high-quality public education system to produce a qualified workforce. Further, a well-established social system offers economic stability to a large part of the population. The liberal legislation allows for flexibility in individual employment relationships. Over the last few years, the importance of part-time work has grown.

Is there any general advice you would give in the employment area?

Newly established companies should not use the same standard agreements that they use for operations abroad, as they may:

  • violate Swiss law; or
  • inadvertently include benefits that are required under foreign laws only.

Emerging issues/hot topics/proposals for reform
Are there any noteworthy proposals for reform in your jurisdiction?

The working time regulations under the Labour Act are under revision. The revisions are expected to result in more stringent rules in the near future in relation to working hours and breaks. The observance of these rules will be controlled more frequently by the labour inspectorates.

What are the emerging trends in employment law in your jurisdiction?

N/A.

The employment relationship

Country specific laws
What laws and regulations govern the employment relationship?

The most notable laws and regulations are as follows:

  • the Code of Obligations;
  • the Labour Act and its implementing ordinances;
  • social security laws;
  • the Law on the Participation of Employees;
  • the Equal Treatment Act; and
  • the Personnel Lending Act.

Who do these cover, including categories of worker?

The above laws generally apply to all employees. The Labour Act and the Law on the Participation of Employees do not apply to true management functions.

Misclassification
Are there specific rules regarding employee/contractor classification?

Case law provides some guidance in this respect. Self-employed contractors are generally defined by their autonomy to structure their work and, as a rule, should not have a fixed workplace or use company equipment to perform their services. However, if a contractor is subordinated to the company engaging him or her, integrated in the company's workforce and spends more than 70% of his or her entire working time working for the same employer, he or she may be deemed a de facto employee.

Contracts
Must an employment contract be in writing?

Oral agreements are valid, but written agreements are market practice and thus recommended.

Are any terms implied into employment contracts?

All statutory rules are deemed to be implied unless the parties deviate from such rules by written agreement. For example, this applies to:

  • the determination of notice periods by virtue of the employee’s length of service;
  • the one-month probation period; and
  • compensation for overtime with time off or payment in lieu of time off. 

Are mandatory arbitration/dispute resolution agreements enforceable?

Mandatory arbitration/dispute resolution agreements are generally unenforceable. However, in an international employment law context, arbitration agreements limited to certain topics may be permissible if the parties agree to opt out of the applicable Swiss procedural rules.

How can employers make changes to existing employment agreements?

This depends on how the employment agreement is structured. Fundamental changes to employment agreements require employee consent. Alternatively, the employer may choose to terminate the old employment relationship (respecting the applicable notice periods) and offer the employee a new employment agreement with new conditions.

Foreign workers
Is a distinction drawn between local and foreign workers?

From an employment perspective, foreign and local workers must be treated equally and no distinction may be drawn. The necessary work permits for foreigners must be obtained and, for non-EU applicants, the employer must show that it tried to find an alternative candidate in Switzerland or the European Union. From an immigration perspective, priority is given to Swiss and EU citizens in such situations. Finally, in certain sectors, foreign employees will be subject to an automatic salary deduction by the employer for withholding tax purposes.

Recruitment

Advertising
What are the requirements relating to advertising positions?

There are no specific requirements regarding advertising positions. An exception exists for advertising positions in connection with personnel lending.

Background checks
What can employers do with regard to background checks and inquiries in relation to the following:

(a) Criminal records?

Yes – to the extent that the position in question justifies asking the candidate for an excerpt from the criminal register (eg, for positions requiring higher trustworthiness).

(b) Medical history?

Medical history may be requested only to the extent that this is justified by the work involved (eg, dealing with heavy workloads or dangerous jobs where physical fitness is a requirement).

(c) Drug screening?

Drug screening is justified only to the extent that it is required due to the work involved (eg, for truck drivers or dangerous jobs where physical fitness is required).

(d) Credit checks?

Credit checks are generally not permissible unless the position in question justifies such a check (eg, bankers, accountants or lawyers).

(e) Immigration status?

Employers must verify whether an employee has a suitable permit to work in Switzerland.

(f) Social media?

Employers cannot screen a candidate's social media accounts. However, professional sites such as LinkedIn and Xing may be screened.

(g) Other?

Employers may contact references given in an applicant’s CV or job application.

Wages and working time

Pay
Is there a national minimum wage and, if so, what is it?

Switzerland has no national minimum wage. Some collective bargaining agreements provide for minimum wages and these agreements may apply to a specific industry. Further, the Cantons of Neuchatel and Jura have adopted minimum wages and the Canton of Ticino is debating whether to vote on this issue.

Are there restrictions on working hours?

For employees working in industry, office personnel and employees working in larger retail shops, the maximum weekly working time is 45 hours. For all other employees, the maximum weekly working time is 50 hours. Working hours above these limits are possible only within defined limits and must be compensated by time off or pay with a 25% surcharge.

Hours and overtime
What are the requirements for meal and rest breaks?

The requirements depend on the employee’s daily working time. For employees working more than five and a half hours per day, a 15-minute break must be provided. Employees working more than seven hours per day are entitled to a rest/meal break of 30 minutes. For employees working nine or more hours per day, a rest/meal break of 60 minutes must be provided.

How should overtime be calculated?

Overtime is the difference between the agreed working time (eg, 40 hours per week) and the maximum working hours (ie, 45 hours or 50 hours per week). Excess overtime is any working time above 45 hours or 50 hours per week. Overtime is usually assessed on a weekly or monthly basis.

What exemptions are there from overtime?

Employees may waive their right to extra compensation for overtime up to the maximum of 45 hours. Waivers must be in writing. Above the stated limit, a waiver will be null and void, except for employees in a true management function.

Is there a minimum paid holiday entitlement?

The minimum paid holiday entitlement is 20 days.

What are the rules applicable to final pay and deductions from wages?

At the end of the notice period, the employer must pay the employee’s final salary, provide compensation for any untaken holidays and overtime and pay any expenses that the employee accrued. In contrast, the employer may make deductions for holidays taken in excess of the employee's entitlement or for a negative balance in working hours, provided that the subsistence minimum is observed.

Record keeping
What payroll and payment records must be maintained?

Payroll records (including social security charges) must be kept for 10 years after termination of the employment relationship.

Discrimination, harassment & family leave

What is the position in relation to:
Protected categories

(a) Age?

Generally, discrimination based on an employee’s age is prohibited. However, certain mandatory distinctions based on the age of an employee are required by law – for example, there is an extra protective regulation regarding employees under the age of 18. Further, the Federal Tribunal recently held that employers have a higher duty of care with respect to elderly employees, at least in the context of previous consultation before terminating such employees.

(b) Race

Equal treatment applies regardless of an employee's race.

(c) Disability?

Employers may not discriminate against disabled employees and must act against any behaviour that excludes or harms disabled employees. Further, there are certain obligations regarding the accessibility of new office buildings which hold more than 50 employees.

(d) Gender?

Equal treatment is guaranteed by the Constitution and the Equal Treatment Act 

(e) Sexual orientation?

Employers may not discriminate based on an employee’s sexual orientation.

(f) Religion?

Employers may not discriminate based on an employee’s religion. However, certain restrictions may apply (eg, special prayer rituals generally must be held during breaks).

(g) Medical?

Employees are protected from termination during certain periods, to the extent that they are incapacitated from work due to illness or accident. Protection from termination depends on the employee’s length of service and is as follows:

  • first year of service – 30 days after an accident or illness;
  • second to fifth year of service – 90 days after an accident or illness; and
  • five or more years of service – 180 days after an accident or illness.

Each new accident or illness will trigger a new period. Further, employees generally may not be discriminated against based on any medical condition.

(h) Other?

Employers must generally respect the individual personality of employees and duly ensure their safety and health.

Family and medical leave
What is the position in relation to family and medical leave?

Employers must grant employees free time for urgent personal matters which cannot be dealt with during free time. The respective case law offers guidelines as to the amount of time that should be granted for certain events (eg, one day for the wedding of a close relative, three days for the employee's own wedding and one day to move house).

After childbirth, mothers are entitled to at least 14 weeks of maternity leave. Switzerland has no statutory paternity or adoption leave.

Harassment
What is the position in relation to harassment?

Sexual harassment may justify termination for cause and may lead to indemnity claims against the employer for undue protection of the employee's personality or infractions under the Equal Treatment Act.

Employers must adopt and enforce sexual harassment policies in order to mitigate such claims. Further, employers have a general duty of care towards their employees, and must refrain from harassing or bullying employees and protect employees from harassment or bullying by other employees.

Whistleblowing
What is the position in relation to whistleblowing?

Whistleblowers are insufficiently protected under Swiss law. A whistleblower may notify the competent external authority only once he or she has raised his or her concerns internally with the employer and given the employer adequate time to deal with the issue.

Notifications to the media are permissible only in serious and limited situations, and only if the notified competent authority has not acted.

If a whistleblower is terminated for correctly bringing an issue to the attention of the competent authority, he or she may file a claim for abusive termination. Planned legislation will address the issue of whistleblowing, codify these principles and protect whistleblowers.

Privacy in the workplace

Privacy and monitoring
What are employees’ rights with regard to privacy and monitoring?

Employers are generally prohibited from monitoring the workplace, unless the monitoring is:

  • required for a legitimate reason; and
  • communicated to the employees in advance, except where there is a concrete suspicion of violations of contractual obligations or criminal activity.

Email accounts may be searched only with employee consent or where private use of emails is strictly forbidden. Finally, the monitoring of employees’ general behaviour is forbidden.

To what extent can employers regulate off-duty conduct?

Employers can regulate off-duty conduct only to the extent that such conduct interferes with the employee's duties (eg, the employer may restrict secondary employment, excessive alcohol or drug consumption and similar behaviour). Employees in managerial positions will be subject to stricter rules regarding off-duty conduct.

Are there rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?

Employers may prohibit or block the use of social media on their networks. However, to the extent that use is permitted, employers cannot monitor social media accounts or collect passwords without employee consent (in exceptional cases, an overriding interest may justify monitoring).

Trade secrets and restrictive covenants

Intellectual Property
Who owns IP rights created by employees during the course of their employment?

As a rule, employers own all IP rights. If an employee creates intellectual property in the course of his or her work, but not in the performance of his or her contractual obligations, he or she may own the intellectual property. However, the employer may reserve the right (in writing) to acquire intellectual property in advance.

Restrictive covenants
What types of restrictive covenants are recognised and enforceable?

The following restrictive covenants are recognised and generally enforceable under Swiss law:

  • confidentiality agreements;
  • non-compete agreements; and
  • non-solicitation agreements.

Certain limitations restrict the enforceability of these agreements. For example, excessive non-compete provisions may be reduced by the courts and, in most cases, will not be enforceable for more than three years after termination of employment. Similarly, liquidated damages that are agreed to in the case of violation of a non-compete obligation and are considered excessive may be reduced by the courts.

Non-compete
Are there any special rules on non-competes for particular classes of employee?

No special rules on non-competes apply for particular classes of employee.

A non-compete will be enforceable only to the extent that the employee:

  • had access to business secrets and customer relations, whose use may harm the employer; and
  • has terminated the employment relationship.

Non-compete undertakings must be agreed in writing and specify the term, territory and scope of application.

Discipline and grievance procedures

Procedures
Are there specific laws on the procedures employers must follow with regard to discipline and grievance procedures?

No.

Industrial relations

Unions and layoffs
Is your country (or a particular area) known to be heavily unionised?

Switzerland is not heavily unionised and the existing unions have lost influence in recent years. Nonetheless, strong unions exist in certain industries – for example, construction.

What are the rules on trade union recognition?

Except for certain cantonal-level rules on the recognition of trade unions for government employees, no specific rules on trade union recognition exist. Naturally, the rules governing the establishment of a respective legal entity must be respected.

What are the rules on collective bargaining?

Under Swiss law, a collective bargaining agreement is a contract whereby employers or employer associations and employee associations jointly set out clauses to govern the conclusion, nature and termination of employment relationships between the employer and individual employees. Collective bargaining agreements may also contain other clauses, provided that these pertain to the relationship between employers and employees or are limited to the formulation of such clauses. No clause in a collective bargaining agreement can compel an employer or employee to join a contracting association and any such clause will be considered void.

Employers and employees bound by a collective bargaining agreement may accede to it with the consent of the contracting parties. Provisions on the formation, nature and termination of individual employment relationships are generally binding on participating employers and employees. Finally, if the statutory prerequisites are fulfilled, the competent federal or cantonal authorities may, based on a respective application by the contracting association, declare a collective bargaining agreement generally applicable to a certain industry.

Termination

Notice
Are employers required to give notice of termination?

Employers must respect the applicable statutory notice periods of one, two or three months, depending on the employee’s years of service. The employer and employee may agree, in writing, on shorter or longer notice periods. However, the employer and employee cannot agree on a notice period of less than one month.

Redundancies
What are the rules that govern redundancy procedures?

Except for certain periods during which the employee may not be terminated, and as long as the applicable notice period is respected, no specific procedures must be adhered to in relation to redundancy procedures. 

Are there particular rules for collective redundancies/mass layoffs?

If the prerequisites for a mass layoff are fulfilled, specific rules apply. If a mass layoff is intended, the employer must consult with the employees' representative (or the employees if no representative exists). Further, the employer must inform the local employment authorities about the contemplated mass layoff and subsequently inform them of the outcome of the consultation, as well as providing further details on the mass dismissal.

During the consultation, the employees must be given a chance to suggest how to prevent the mass layoff. In addition, the employees must be informed of the following during the consultation:

  • the reasons for the mass layoff;
  • the number of employees concerned;
  • the number of persons usually employed; and
  • the period within which the employer will give notice of termination.

Protections
What protections do employees have on dismissal?

Employers are generally free to terminate employees while respecting the applicable notice period. However, employees are protected to a certain extent, with regard to both the subject matter of dismissal and when the notice of termination is given.

Terminations made during certain inopportune times (eg, during leave for illness or accident, pregnancy or military service) are null and void. Terminations based on certain defined criteria (eg, based on the employee's race or religion or the fact the employee rightfully exercised his or her rights) may qualify as an abusive termination and will remain effective (ie, no re-engagement), but the employee can seek indemnity payment from his or her employer of up to six months’ salary. 

Courts/tribunals

Jurisdiction and procedure
Which tribunals or courts have jurisdiction to hear complaints?

Within Switzerland, the court at the domicile or registered office of the defendant, or where the employee normally carries out his or her work, has jurisdiction to decide the case. If a job applicant or employee brings an action based on the Personnel Lending Act, the court at the place of the business establishment of the recruitment or hiring agent with which the contract was concluded also has jurisdiction.

What is the procedure and typical timescale?

Employment disputes with values of Sfr30,000 or less are dealt with in a simplified procedure and are free of court fees at the cantonal level. Additionally, the formal requirements imposed on the parties are less strict (eg, the court will ask questions in order to establish the facts). For disputes with a value of over Sfr30,000, a more formalistic procedure applies.

No fixed timescales for court proceedings exist. However, the court cannot unduly delay the proceedings, and procedural rules are set out to expedite proceedings. Nonetheless, first-instance proceedings (including mandatory settlement negotiation) will likely take over one year.

Appeals
What is the route for appeals?

Complaints must generally be brought before a local justice of the peace during mandatory settlement proceedings. If the complaint cannot be settled by the parties, the claim may be brought before a first-instance cantonal court, which may be an ordinary court or a special employment court. Subsequently, an appeal may be filed with the second-instance court (ie, the highest cantonal court). Finally, the claim may be brought before the Federal Tribunal if certain prerequisites are met (eg, the dispute meets the minimum value requriement).