Country snapshot

Key considerations

Which issues would you most highlight to someone new to your country?

Employment law in Switzerland is relatively liberal. If there are no special circumstances (eg, incapacity for work, pregnancy or mass redundancies), an employment contract can be terminated for any valid (ie, not abusive) reason, subject to the applicable notice period. However, employee protection is important, which is why formal procedures and legal structures exist to protect workers, which must be adhered to (eg, restrictions on working time and the prevention of discrimination).

Foreign nationals – especially non-EU nationals – must be careful to obtain and renew their work permit.

What do you consider unique to those doing business in your country?

N/A.

Is there any general advice you would give in the employment area?

Employers are advised to have employment contracts which are governed by Swiss law reviewed by a lawyer specialised in Swiss employment matters before they are executed – preferably by a Swiss Bar Association-certified specialist in employment law. Otherwise, contractual provisions may not be enforceable.

Emerging issues/hot topics/proposals for reform

Are there any noteworthy proposals for reform in your jurisdiction?

A new Swiss federal law due to come into force on 1 July 2020 places an obligation on companies employing more than 100 employees at the beginning of a given calendar year to undergo a scientific analysis of their salary policies to prevent gender pay gaps. With this legislation, Switzerland joins a selected group of countries that require gender pay gap reporting. Under the new rules, firms with 100 or more employees will have to provide a gender pay gap analysis every four years. Companies must inform employees and shareholders of the results.

To better utilise the potential of the domestic workforce, the Swiss parliament adopted a law introducing a job registration requirement for occupations with a high level of unemployment in Switzerland. Since 1 July 2018, employers are thus legally required to register vacancies for occupations with the regional employment centre (RAV) where the unemployment rate for that occupation is at least 8% (as per an official list). On 1 January 2020 this threshold will be lowered to 5% and a new list of occupations will be applicable. The job registration requirement is designed to ensure that jobseekers registered with the RAV are informed first about job vacancies in their occupations. This gives them a five-day head start over other candidates. It also allows for the RAV to send employers a list of suitable candidates and to establish close relationships with recruiters of the private sector.

What are the emerging trends in employment law in your jurisdiction?

There is a trend towards more flexible employment relationships with regard to:

  • part-time work;
  • variable weekly working hours; and
  • project work.

The employment relationship

Country specific laws

What laws and regulations govern the employment relationship?

The most important statutory laws governing the employment relationship are:

  • the Code of Obligations (SR 220);
  • the Federal Work Act (SR 822.11);
  • the Federal Act on Gender Equality (SR 151.11);
  • the Federal Act on Worker's Participation (822.14);
  • the Federal Act on Deployment (SR 823.20);
  • the Federal Act on Placement Agencies and Staffing Leasing Services (SR 823.11); and
  • the Federal Ordinance against Excessive Compensations with Listed Companies (221.331).

Most of these laws have corresponding ordinances.

Statutory laws on Swiss social security and social insurances, as well as collective labour agreements that apply in various sectors, have a significant impact on the employment relationship.

Who do these cover, including categories of worker?

Most provisions of these laws cover all categories of worker in the private sector. Employment in the public sector is governed by public laws.

Misclassification

Are there specific rules regarding employee/contractor classification?

The employee-contractor classification is governed by Articles 18 and 319 of the Code of Obligations, as well as by case law. Work control, grade of subordination and integration into business organisation are crucial factors in determining the legal classification of the contract.

Contracts

Must an employment contract be in writing?

As a rule, employment contracts are not subject to any specific formal requirement (Article 320 of the Code of Obligation). However, written contracts are recommended and common. Article 330b of the Code of Obligations requires a written information letter after the commencement of work that should include the names of the contracting parties, the date of commencement of the employment, the function of the employee, information regarding salary and wage supplements, as well as weekly working hours.

Are any terms implied into employment contracts?

Parties under an employment contract must adhere to mandatory statutory laws and any applicable collective labour agreements. If contracting parties deviate from those provisions, the mandatory terms are implied into the employment contract and the mutually agreed provisions of the contract are void.

Are mandatory arbitration/dispute resolution agreements enforceable?

Mandatory arbitration agreements are unenforceable in employment matters if they concern mandatory statutory provisions of a non-Swiss employment contract.

How can employers make changes to existing employment agreements?

Changes to an existing employment agreement can be mutually agreed at any time. If the employee refuses any changes, the employer may give a termination notice and propose an amended employment agreement to the employee. If the employee wishes to continue employment, he or she must accept the changes to the existing employment agreement when the applicable notice period expires. The employment ends if the employee rejects the offer. Reasonable grounds are required for notice to be given to change employment terms in case they are disadvantageous to the employee.

Foreign workers

Is a distinction drawn between local and foreign workers?

In general, there is no distinction between local and foreign workers. However, if the employee is a foreign national (especially a non-EU national), the employer may want to conclude the contract subject to a valid work permit.

 Recruitment

Advertising

What are the requirements relating to advertising positions?

Ads must not be discriminatory. Special rules apply to job ads by placement and staffing agencies.

Background checks

What can employers do with regard to background checks and inquiries in relation to the following:

(a) Criminal records?

Employers can request an official extract of the criminal records if such data is necessary to assess the applicant's eligibility for the job.

(b) Medical history?

Applicants must answer questions relating to health conditions truthfully if such data is necessary to assess the applicant's eligibility for the job.

(c) Drug screening?

Applicants can be requested to undergo drug screening tests if such test results are necessary to assess the applicant's eligibility for the job.

(d) Credit checks?

Employers can request an official extract of the Enforced Payment Collection Register records if such data is necessary to assess the applicant's eligibility for the job.

(e) Immigration status?

Applicants are requested to present their work permit. If the applicant does not hold a valid work permit, the employer must apply for a permit well in advance of the commencement of work in Switzerland. EU nationals benefit from the bilateral agreement between Switzerland and the European Union on the free movement of persons (SR 0.142.112.681).

(f) Social media?

The use of social media for background checks is debated in Switzerland. Some scholars opine that employers must abstain from such practices; others think that employers are under an obligation to confront the applicant with online search results.

(g) Other?

N/A.

Wages and working time

Pay

Is there a national minimum wage and, if so, what is it?

There is no national minimum wage. However, collective labour agreements and standard employment contracts may provide for minimum wages that apply in respective branches and sectors.

Are there restrictions on working hours?

As a rule, the maximum weekly working hours are 45 or 50 hours, depending on the category of worker.

Hours and overtime

What are the requirements for meal and rest breaks?

The Federal Work Act (SR 822.11) provides rules regarding breaks. Work must be interrupted for:

  • 15 minutes if the daily working time exceeds five-and-a-half hours;
  • 30 minutes if the daily working time exceeds seven hours; or
  • one hour if the daily working time exceeds nine hours.

Under Article 36 of the Federal Work Act, employees with family duties may request a lunch break of at least 90 minutes. The care and upbringing of children under 15 years and the care of immediate family are considered to be family duties.

How should overtime be calculated?

There are two categories of overtime under Swiss law:

  • Overhours – if the number of hours worked exceeds the contractually agreed working time, the number of working hours exceeding the contractually agreed working hours are considered overhours.
  • Overtime – if the number of hours worked exceeds the maximum working time allowed under the Federal Work Act, the number of working hours exceeding such maximum working time is considered overtime.

As a rule, employers must compensate overhours and overtime with a supplemental pay of at least 25%. By mutual agreement, overhours and overtime may be compensated by time off in lieu, which must be of (at least) equal duration. For overhours, the parties may agree in writing that there will be no extra compensation or time off in lieu, but that this is included in the normal salary.

What exemptions are there from overtime?

The employee is exempted from performing overtime work to the extent that they may not reasonably be expected to do so. For example, if the employee's physical condition prevents the performance of overtime work, the employee is exempted from their obligations.

Is there a minimum paid holiday entitlement?

The minimum entitlement of paid vacation is four weeks (20 working days) and five weeks’ vacation (25 working days) for employees under 20 years. Further, Switzerland has paid public holidays (eg, 1 August).

What are the rules applicable to final pay and deductions from wages?

Swiss social insurance laws provide for deductions from wages. Further, employers may be obliged to deduct source tax from the employee's wages under certain circumstances. Deductions are shown on the employee's pay slip. The regulations on deductions for social insurance and taxes are detailed and rather complex.

Record keeping

What payroll and payment records must be maintained?

For accounting and tax purposes, employers maintain (among other things) pay slips and expense receipts of the employee. For example, leasing agreements and expense receipts regarding the employee's company car must be maintained.

Discrimination, harassment & family leave

What is the position in relation to:

Protected categories

(a) Age?

Although protected classes are not recognised under Swiss law, several laws provide for similar protection. For example, unlawful dismissal may apply if a termination notice was given purely based on the grounds of age and despite the fact that the employee had performed his or her job well (Article 336(1)(a) of the Code of Obligations). However, parties may contractually agree to terminate employment automatically if the employee reaches a certain age (eg, retirement age).

(b) Race

Although protected classes are not recognised under Swiss law, several laws provide for similar protection. For example, unlawful dismissal may apply if a termination notice was given purely based on the grounds of race and despite the fact that the employee had performed their job well (Article 336 Paragraph 1(a) of the Code of Obligations).

(c) Disability?

Although protected classes are not recognised under Swiss law, several laws provide for similar protection. For example, unlawful dismissal may apply if a termination notice was given purely based on the grounds of disability and despite the fact that the employee performed their job well (Article 336(1)(a) of the Code of Obligations).

(d) Gender?

The Federal Act on Gender Equality (SR 151.1) provides that employees must not be discriminated against on the basis of gender, as well as marital status or family situation (including pregnancy). This regulation chiefly applies to the following:

  • hiring;
  • allocation of duties;
  • working conditions;
  • pay;
  • basic and continuing education and training;
  • promotions; and
  • dismissal.

Appropriate measures aimed at achieving true equality are not regarded as discriminatory.

(e) Sexual orientation?

The Federal Act on Gender Equality (SR 151.1) provides that employees must not be discriminated against on the grounds of sexual orientation, marital status or family situation (including pregnancy). This regulation chiefly applies to the following:

  • hiring;
  • allocation of duties;
  • working conditions;
  • pay;
  • basic and continuing education and training;
  • promotions; and
  • dismissal.

Appropriate measures aimed at achieving true equality are not regarded as discriminatory.

(f) Religion?

Although protected classes are not recognised under Swiss law, several laws provide for similar protection. For example, unlawful dismissal may apply if a termination notice was given purely based on the grounds of the employee exercising their constitutional right of religious freedom and despite the fact that the employee performed their job well (Article 336(1)(b) of the Code of Obligations).

(g) Medical?

Although protected classes are not recognised under Swiss law, several laws provide for similar protection. Article 336(c) of the Code of Obligations prohibits employers from giving termination notices to employees who are prevented from working by illness or accident for up to:

  • 30 days in the first year of service;
  • 90 days in the second to fifth years of service; and
  • 180 days in the sixth and subsequent years of service.

(h) Other?

N/A.

Family and medical leave

What is the position in relation to family and medical leave?

The most important rules regarding family leave are as follows:

  • Mothers of a new-born children are entitled to maternity leave of at least 14 weeks. Social insurance provides for partial coverage against loss of salary, if the legal requirements are met (SR 834.1).
  • In the eight weeks before the baby’s due date, pregnant employees are prohibited from working between 8:00pm and 6:00am. Mothers of a new-born child are prohibited from working during the first eight weeks after childbirth.
  • Article 336(c) of the Code of Obligations prohibits employers from giving termination notices to female employees during pregnancy or 16 weeks following birth of their child.

The most important rules regarding medical leave are as follows:

  • If the employee is prevented from working by illness or accident and the legal requirements are met, the employer is obliged to continue salary payments for a limited time. Under Article 324(a) of the Code of Obligations, employers must pay three weeks' salary during the first year of employment; this payment increases based on the employee’s length of service (SR 220). Swiss courts use scales to determine the appropriate period of continued salary payments (eg, scales of Basel, Bern and Zurich). Many employers take out insurance which provides coverage against loss of salary in the event of medical leave.
  • Under certain circumstances, employees may request time off to care for sick children (Article 36(3) of the Federal Work Act; SR 822.11).
  • Article 336(c) of the Code of Obligations prohibits employers from giving termination notices to employees who are prevented from working by illness or accident for up to:
    • 30 days in the first year of service;
    • 90 days in the second to fifth years of service; and
    • 180 days in the sixth and subsequent years of service.

Harassment

What is the position in relation to harassment?

Under Article 328 of the Code of Obligations (SR 220), employers are obliged to safeguard their employees’ health and ensure that proper moral standards are maintained. In particular, they must ensure that employees are not sexually harassed and that any victims of sexual harassment suffer no further adverse consequences.

Sexual harassment is a crime pursuant to Article 198 of the Swiss Criminal Code (SR 311.0).

Whistleblowing

What is the position in relation to whistleblowing?

Whistleblowing is currently under review in Switzerland. The circumstances under which employees may internally or externally report misbehaviour or other grievances remain undetermined. Under Article 321(a) of the Code of Obligations, employees have a duty of loyalty towards their employers and are contractually obliged to keep confidential business information a secret. The Federal Council proposed new laws to better protect employees in the private sector who report grievances despite their duties of loyalty and of confidentiality. However, Parliament has sent the draft back to the government for review.

Privacy in the workplace

Privacy and monitoring

What are employees’ rights with regard to privacy and monitoring?

Under Article 328 of the Code of Obligations, employers must acknowledge and safeguard their employees’ personality rights, including privacy, and must take all reasonable measures using the latest technology to appropriately protect employees' privacy.

Under Article 26 Ordinance 3 of the Federal Work Act, in principle, monitoring systems which systematically control an employee’s behaviour in the workplace are prohibited (SR 822.113).

Employees have additional rights under the Federal Act on Data Protection (SR 235.1). Under Article 328(b) of the Code of Obligations, employers may handle only data that is needed to assess an employee’s eligibility and ability to perform work, or that is required by law to properly process the employment relationship.

To what extent can employers regulate off-duty conduct?

Under Article 321(a)(1) of the Code of Obligations, employees have a duty of loyalty towards their employer. Therefore, high-ranking executives must abstain from making disparaging comments about their workplace, co-workers and supervisors at all times. There is a reasonable expectation that executives loyally represent their employer even while off duty.

With regard to employees with no executive status, the increased political, ideological or social exposure of the employer’s business may demand from the employee that he or she acts in line with the purpose of the business even while off duty.

Are there rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?

The above rules apply to employees' rights to privacy and background checks relating to social media.

Trade secrets and restrictive covenants

Intellectual Property

Who owns IP rights created by employees during the course of their employment?

Employers own all of the IP rights that employees create during the performance of contractual work obligations.

By written agreement, an employer may reserve the right to acquire inventions and designs that were created during the course of employment, but not during the performance of contractual work obligations.

Since there is no specific provision regarding copyright – in contrast to the other IP rights – it is recommended that the issue of copyright is accordingly clarified in the employment contract.

Restrictive covenants

What types of restrictive covenants are recognised and enforceable?

Non-compete and non-solicitation covenants are recognised clauses. To be enforceable, such clauses must be drafted carefully.

Non-compete

Are there any special rules on non-competes for particular classes of employee?

N/A.

Discipline and grievance procedures

Procedures

Are there specific laws on the procedures employers must follow with regard to discipline and grievance procedures?

N/A.

Industrial relations

Unions and layoffs

Is your country (or a particular area) known to be heavily unionised?

Switzerland is not known to be heavily unionised, but some strong and highly active unions play an important role.

What are the rules on trade union recognition?

The following requirements must be met for trade or labour union recognition:

  • Unions must have legal capacity.
  • Unions must be independent from employers – in particular, there must be financial, organisational and staff independence.
  • Unions must be independent from third parties (eg, governmental authorities).
  • Membership must be voluntary (ie, no compulsory membership).
  • By statute, the union must be competent to negotiate and enter into a collective labour agreement.

What are the rules on collective bargaining?

The rules on collective bargaining are set out in the Code of Obligations (SR 220) and the Federal Act on Declaring Generally Applicable Collective Bargaining Agreements (SR 221.215.311).

Article 28 of the Federal Constitution (SR 101) sets out the requirements for collective actions (eg, organised strikes or employee lock-outs). The following requirements must be met to avoid unauthorised collective action:

  • Only recognised unions are authorised to organise collective actions (see above regarding trade and labour union recognition).
  • The purpose of the collective action must be to amend an existing collective labour agreement or to fight for a new collective labour agreement – organised strikes must target items which may form part of a collective labour agreement.
  • As a rule, unions have a duty to negotiate before taking collective action. Article 357(a)(2) of the Code of Obligations provides for a duty of the parties to maintain peace and to abstain from collective actions regarding matters already regulated by the collective bargaining agreement (SR 220). Provisions of the collective bargaining agreement may provide for an extension of the duty to maintain peace to any other item for a limited period. Further, statutory laws may generally prohibit strikes for sectors which are critical to maintain public security and health.
  • Collective actions must be fair – vital parts of a business must be maintained to allow for the resumption of work upon end of strike. Criminal acts are prohibited at all times.

Termination

Notice

Are employers required to give notice of termination?

Employers are required to give a notice of termination. Notice can be given orally, unless the employment contract states otherwise.

Redundancies

What are the rules that govern redundancy procedures?

Redundancy procedures are set out in Article 335 of the Code of Obligations (SR 220).

Are there particular rules for collective redundancies/mass layoffs?

Mass redundancies are set out in Article 335(d) of the Code of Obligations. In case of mass layoffs, special rules and procedures must be followed by the employer.

Protections

What protections do employees have on dismissal?

Employees have the following protection on dismissal:

  • Employees have the right to ask for a written motivation letter of the employer explaining the grounds for dismissal.
  • Employees may challenge the dismissal – if it was wrongful, the employee is entitled to compensation for wrongful dismissal.
  • If an employee was discriminated against based on his or her gender, the court may order the temporary reinstatement of the employee.
  • If the employer gives a notice of termination during a protected period as defined by statutory law (eg, illness, military or civil protection duty, pregnancy or childbirth) the notice is void and has no effect.

Courts/tribunals

Jurisdiction and procedure

Which tribunals or courts have jurisdiction to hear complaints?

State courts and arbitral tribunals have jurisdiction to hear employment complaints.

However, arbitral tribunals may have limited subject matter jurisdiction under certain circumstances. State commercial courts do not have subject matter jurisdiction to hear employment cases.

The first-instance court to hear employment cases is often a district court. Some district courts have divisions focusing exclusively on employment matters. Some Swiss cantons have established employment courts.

What is the procedure and typical timescale?

The complaint is heard by a conciliation authority (to obtain authorisation to proceed) and then handled by a first-instance court (exchanges of briefs and hearings, including witness hearings). The typical timescale for proceedings is six to 18 months.

Appeals

What is the route for appeals?

Appeals are handled by appellate courts and the Swiss Federal Tribunal. 

Law stated date

Correct on

Give the date on which the above content is accurate.

November 2019.