What is the legal framework for individual transfers? What restrictions can be placed on individuals moving between clubs?

The relationship between professional athletes and their clubs is typically based on an employment contract (usually in fixed-term agreements). Therefore, when an athlete is transferred, his or her employment contract with the former club has to be terminated (unless the respective term has expired) and a (new) employment contract with the new club will be entered into. Generally, restrictive covenants (eg, non-competition undertakings) are permitted under Swiss employment law. However, in the sporting industry these restrictive covenants are considered an unreasonable impairment of the athletes’ economic prospects, and are thus seen as excessive and not enforceable. Additional restrictions (eg, restrictions on the transfer of minors or transfer bans imposed on clubs) can arise, including from regulations in a particular sport (eg, the UEFA Financial Fair Play Regulations for football).

Ending contractual obligations

Can individuals buy their way out of their contractual obligations to professional sports clubs?

Not unilaterally. They would need the consent of the respective professional sports club or a specific provision in the employment agreement, such as a buy-out clause.

Welfare obligations

What are the key athlete welfare obligations for employers?

The employer’s duty of care comprises a wide range of obligations regarding the safeguarding of the welfare of the employees, including the athlete's health and safety, and personality rights. Under Swiss law, athletes have a right to remain occupied. Therefore, an athlete is entitled to at least train with the team he or she was hired for, provided that there are no disciplinary offences for which he or she is responsible.

Young athletes

Are there restrictions on the employment and transfer of young athletes?

Yes, under Swiss labour laws, minors (children under the age of 15 years) may only be employed on an exceptional basis, and if certain requirements are fulfilled. Special provisions of a particular sports federation may also apply, such as article 19 of the FIFA Regulations on the Status and Transfer of Players, which generally prohibits the international transfer of minors.

What are the key child protection rules and safeguarding considerations?

Based on Swiss labour laws, minors (children under the age of 15 years) may be employed for sports activities provided that (i) the physical and mental development of the minor is in no way jeopardised; and (ii) the minor's school attendance and performance are not impaired. Maximum working hours for minors are three hours per day and nine hours per week. Also, a notification has to be made to local authorities.

Club and country representation

What employment relationship issues arise when athletes represent both club and country?

The contractual relationship of athletes that represent both their club and their country is typically exclusively with the club. In certain sports, most notably football, clubs are obligated to let selected athletes participate in activities of their respective national team. Players and their clubs are usually obligated to accept invitations of the national team. The contractual relationship with the club (salary, insurance, etc) remains in force during these activities. Issues can arise if athletes suffer from injuries during activities with the national team.

Selection and eligibility

How are selection and eligibility disputes dealt with by national bodies?

The right to select athletes for the relevant games and activities lies with the relevant sports federation or, in relation to the Olympic Games, with the Swiss Olympic Committee. The relevant eligibility and selection criteria differ depending on the sport and are typically performance-based. In circumstances where disputes arise and athletes seek to appeal against the decision of the selectors, the rules governing the athlete’s relationship with the club, the relevant sports federation and the Swiss Olympic Committee set out the terms for the athlete’s right of appeal. Ultimately, these decisions can (usually) be appealed to the CAS.

What are the key taxation issues for foreign athletes competing in your jurisdiction to be aware of?

Athletes residing abroad who engage in gainful activity in Switzerland are subject to limited tax liability owing to their economic affiliation. These athletes are subject to withholding tax in the canton concerned, whereby the sports event organiser must deduct the amount of withholding tax owed from the prize money and other premiums and deliver them to the tax authority. The double taxation agreements (DTAs) between Switzerland and the athlete's country of residence generally provide for the right of taxation of the country in which the sports event is held, whereby payments such as prize money and other premiums for taxation are mostly allocated to the venue of the sports event. Whether the athlete is in an employment relationship or is self-employed is irrelevant in most cases. In addition, payments that are not made to the athletes directly but to a third party that organises the event for the athlete are subject to taxation in Switzerland.

Foreign athletes competing in Switzerland with a worldwide turnover of 100,000 Swiss francs are also subject to value added tax, provided that the tax is not paid by the sports event organiser using the method outlined above. Additional social security deductions may apply.

Athletes residing in Switzerland are generally subject to federal, cantonal and communal taxes on their worldwide income. Accordingly, any income received by an athlete is taxable (eg, prizes in the form of cash or non-cash premiums, sponsorship income and entry fee). This taxation is, however, limited by certain rules provided by DTAs Switzerland has entered into.