KEY DEVELOPMENTS FOR 2017
Mass Immigration Initiative
In February 2014, Switzerland adopted the so-called “mass immigration initiative”, obliging Swiss parliament and government to implement stricter rules on immigration into Switzerland. The limitations imposed by the initiative are generally considered to be inconsistent with the free movement of persons between Switzerland and the EU. The initiative sets a deadline of three years for its implementation, meaning that it should be implemented by February 2017. The Swiss parliament is currently debating proposals as to how the initiative can be achieved, e.g. priority of Swiss nationals or residents when new vacancies are filled. It remains to be seen whether a political consensus can be achieved and what effect such solution will have on the relationship between Switzerland and the EU. A further vote regarding the abolishment of the limitations imposed by the “mass immigration initiative” in 2014 is, however, anticipated.
KEY DEVELOPMENTS FOR 2016
New exceptions to avoid / simplify the record keeping obligation
Since 1 January 2016, new exceptions allow employers in certain cases to avoid or simplify employee record keeping obligations in relation to employees who have the ability to schedule their own working hours. However, there are strict additional conditions which must be met for these reduced obligations to apply.
Protection of older employees against dismissal
Under Swiss law, an employer is generally free to make employees redundant without having a specific reason (“freedom to give notice”). However, terminating an employment relationship for abusive reasons (which are defined narrowly), can result in compensation payments. Recent case law shows a tendency to better protect older employees who have significant periods of service. In these cases, before such employees are made redundant, an employer has to check whether a notice of termination can be avoided, e.g., by reassigning the employee to a new position within the organisation. If the employer fails to do so, the notice of termination is likely to be deemed ‘abusive’, potentially resulting in a compensatory penalty of up to six months’ pay.
Increase in the maximum salary covered under the accident insurance scheme
As of 2016, the maximum salary insured under the accident insurance scheme has been increased from CHF 126,000 to CHF 148,200. That figure is not only important in accident insurance itself, but serves also as an important benchmark in other social insurances (such as unemployment insurance) and under certain employment law provisions (e.g., regarding the hiring out of employees). Under Swiss law, many relevant social insurances (accident and unemployment insurance as well as old age and survivors’ insurance and occupational pension plans etc.) are linked to the employment relationship. It is the employer’s duty to deduct the employee’s share of the respective contributions and to transfer such share with its own contributions to the respective authorities and insurance institutions.
Improved coverage of short-time work
If an employer is not able to fully occupy all employees for economic reasons for a limited period of time, employees may apply for short-time work benefits from the unemployment insurance. Taking into consideration economic difficulties (especially for export businesses), the Swiss government has decided to implement an improved coverage of short-time work.
New bonus-related leading cases
There are no specific provisions applicable to bonus payments under Swiss statutory employment law. Depending on the circumstances of the specific case, a bonus may either be qualified as salary or ‘gratification’ (which is discretionary). This distinction has numerous legal implications, and in the course of 2016, the Swiss Supreme Court decided several cases which addressed whether and to what extent very high bonus agreements may be qualified as a discretionary gratification. However, there remains ambiguity which is likely to be the subject of further litigation and clarification by the courts.
With thanks to Thomas Kälin of Meyerlustenberger for his invaluable collaboration on this update.