By popular vote, Swiss citizens on February 9, 2014 narrowly approved the constitutional initiative “Against Mass Immigration.” This initiative requires the reintroduction of maximum numbers and quotas for all foreign nationals who want to reside and work in Switzerland. This will be a fundamental change to the current situation, in particular for all EU/EFTA citizens who shall in future no longer benefit from the free movement of persons but be treated like any other foreign nationals. It will become more difficult for foreign nationals to work and reside in Switzerland. Even in those cases where a permit is ultimately granted, the upcoming necessary changes to the law will delay the process and trigger additional costs.

The Content of the Popular Initiative

The popular initiative requires that the immigration of foreign nationals shall be subject to annual maximum numbers and quotas. The maximum numbers shall apply to the immigration of all categories of foreign nationals, including asylum seekers. The right of permanent residence, the right of family members to join a foreign national who is granted a residence permit and the right to obtain social benefits may be restricted.

The annual quotas for foreign nationals who wish to exercise a gainful activity shall equally be limited in number and shall take into consideration Switzerland’s overall economic interest. Preference shall thereby again be granted to Swiss citizens. This also applies to those foreign nationals who reside abroad and work in Switzerland, the so-called border commuters. 

The relevant criteria for granting a residence and work permit within a quota system shall be (i) the application of an employer who has not found an adequate Swiss citizen for the job in question, (ii) the foreign national’s ability to integrate, and (iii) sufficient, independent financial means of existence for the immigrant.

The popular initiative requires that any international treaty that violates the above principles be renegotiated and amended within three years,i.e., by February 9, 2017. This will force the Federal Council to enter into a dialogue and possibly negotiations with the EU sooner rather than later since the popular initiative does not comply with the Bilateral Treaty on the Free Movement of Persons. 

The popular initiative leaves numerous relevant questions open. In particular, it does not specify how many annual quotas shall be granted, how they shall be determined, and by whom. The actual implementation of the popular initiative will thus have to be effected by a Federal Act which will need to be adopted by the two chambers of parliament. This Act might then even be subject to a referendum. The popular initiative hence requests that the Federal Council, by February 9, 2017 at the latest, adopts the necessary implementing provisions by way of Ordinance if the Federal Act has not entered into force by such date.

Consequences of the Popular Initiative 

The reintroduction of maximum numbers and quotas will, once introduced, render it more difficult and costly for businesses to get foreign national employees into Switzerland. EU and EFTA citizens will no longer be able to just enter Switzerland but will first have to apply for a work and residence permit and only once this permit is granted will they be able to work in Switzerland. 

The principles established by the popular initiative seem to indicate that it should still be possible to get well qualified employees into Switzerland because the principles basically correspond to the ones currently applicable to non-EU/EFTA citizens. This means that foreign nationals who have specific skills that cannot be found on the Swiss labor market should still be able to get a work and residence permit. 

The change will, however, most likely make it substantially more difficult for less-qualified EU/EFTA citizens to obtain a work and residence permit. While under the current system they basically could come to work in Switzerland without any previous application, they might see their work permit application rejected in the future and thus be prevented from working and living in Switzerland entirely. 

The authorities will most likely charge a fee for the work and residence permits even though a fee might be excluded for EU/EFTA citizens. Nevertheless, drafting and filing the work and residence permit application will trigger costs for the external advisor and/or the additional work that the Human Resources department of the applicant has to discharge. 

The acceptance of the popular initiative will also require a renegotiation of the Bilateral Treaty on the Free Movement of Persons between the European Community and its member states (i.e. the EU) on the one side and Switzerland on the other side. It is likely that the EU will not accept the unilateral reintroduction of maximum numbers and quotas by Switzerland. The European Commission has already announced that it is now up to the Swiss government to make proposals, but that the principle of free movement of persons is not up for negotiation. If no agreement can be found, Switzerland will inevitably violate the Bilateral Treaty and a subsequent termination of this treaty by the EU is a substantial risk. The termination of this treaty would automatically also trigger the termination of all other bilateral treaties upon the lapse of a six month period, namely including the treaties on free movement of transportation by land and air, but also the accession treaties to Schengen and Dublin. Currently pending negotiations on further bilateral treaties (like electricity) and an institutional framework agreement will likely be put on hold for the time being. 

According to the Federal Council, the acceptance of the popular vote shall have no impact on foreign nationals already living in Switzerland and the initiative shall only deploy its effects with respect to foreign nationals who enter Switzerland after the implementing legislation has entered into force. This interpretation is solely based on the Bilateral Treaty and not pertinent to other foreign nationals, and even in the case of EU/EFTA citizens there will likely be political discussions as to whether the principle shall also apply if a permit has to be renewed upon expiry of the implementation period. However, it is safe to assume that there will be a certain protection of the foreign national’s trust in the right to remain resident in Switzerland. In particular, the right of permanent establishment should not be affected by the change.

Conclusion 

For the time being, the exact effects of the popular vote are still unknown. However, further developments should be closely watched. In particular for EU and EFTA citizens who want to work and reside in Switzerland, it might be advisable for them to come to Switzerland before the implementing law enters into force.