Federal Court ruling on changes to bonus plan

Under Swiss law, an employer needs their employees’ consent to change the terms of a bonus plan, unless the changes are entirely to the employees’ benefit. In a recent case, the Swiss Federal Court considered the circumstances in which an employee’s consent can be implied to changes that are to their disadvantage.

In a judgment given on 14 August (FTD 4A_133/2015), the Court ruled that an employee’s consent to a disadvantageous change will only be implied where the circumstances are such that an employee acting in good faith would be expected to make it clear if they do not agree to the change. This could be the case where it is obvious to the employee that their employer believes the change is agreed and that the employer would approach the matter differently if it thought otherwise.

In the case before the Court, the employer had written to the employee explaining the proposed changes to his bonus scheme and had invited him to an information meeting. The employee must have been aware of the differences between the old and new schemes because they were clear to see. Furthermore, it would have been apparent to the employee that his employer was under the impression that he agreed with the amendments. In those exceptional circumstances, the Court was prepared to accept that, if the employee did not agree with the proposed changes, he should have said so; the fact that he did not do so led the Court to conclude that he had impliedly agreed to the changes.

The facts of this case were quite unusual and it is clear that consent will only be implied in quite limited circumstances. As such, employers who wish to change a bonus plan in a way that does not benefit employees should err on the side of caution and obtain their explicit agreement.