An employment contract must define certain work-related conditions, including:
- job specifications;
- salary (including any other financial incentives);
- working hours; and
- overtime and holiday policies.
While these cornerstones of an employment contract are usually well defined, an important component which is often less considered is the place or places where an employee will perform his or her work.
Overlooking present and potential work locations of employees could be problematic if a dispute arises since the place of work at the time of a dispute often determines the judicial forum. According to international private law in Switzerland and most other European countries, the place of work also determines the applicable employment law, even if the parties to an employment contract have favoured a particular employment law.
To the extent that the contracting parties have agreed on one or more places of work, a substantial change in work location requires the employment contract to be amended, while minor location changes remain subject to the employer's imminent instructional rights.
If the contracting parties cannot agree on an amendment, the employer must terminate the employment contract by means of a termination notice combined with an offer of a new employment contract which includes the modified place of work. If the employee accepts the contract offer, the employment contract continues with the amended place of work; if the offer is declined, the employment relationship is terminated.
One approach to prevent difficulties in renegotiating an employment contract is to allow the employer in advance to change or extend the employee's place or places of work. However, such a relocation clause, which entitles the employer to transfer the employee to another place of employment by exercising its instructional rights as an employer, is limited, as Swiss law generally prohibits excessive contractual commitments which interfere with personal circumstances.
The Supreme Court saw such an excessive commitment in a case where an employee agreed to a fixed place of work but allowed the employer to relocate the employee to any of its national branches, which required the employee to bear longer commuting times and higher costs without compensation.
The employer's instructional rights must never unreasonably interfere with the employee's family or other personal circumstances. Additional considerations for employers which may affect the operational necessity and urgency of relocation include:
- the duration of the relocation process as a whole;
- the distance and duration of the commute before and after the transfer;
- the degree of employment (ie, full or part time); and
- the working hours required thereunder.
For further information on this topic please contact Thomas Rihm at Rihm Rechtsanwälte by telephone (+41 44 377 77 20) or email ([email protected]). The Rihm Rechtsanwälte website can be accessed at www.rihm-law.ch.