Switzerland: Labour and Employment Comparative Guide

Last Updated: 6 August 2019
Article by Roland Bachmann
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1 Legal framework

1.1 Are there statutory sources of labour and employment law?

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 Workers' 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 insurance, as well as collective labour agreements that apply in various economic sectors, have a significant impact on the employment relationship.

1.2 Is there a contractual system that operates in parallel, or in addition to, the statutory sources?

Yes. Collective labour agreements have a significant impact on the employment relationship. Collective labour agreements do not apply in all economic sectors in Switzerland.

1.3 Are employment contracts commonly used at all levels? If so, what types of contracts are used and how are they created? Must they be in writing must they include specific information? Are implied clauses allowed?

Employment contracts are commonly used at all levels. For high-ranking management positions, they usually contain much more detailed provisions compared to contracts for other functions.

The conclusion of an employment contract requires a mutual expression of intent by the contracting parties. The parties' expression of intent may be express or implied. No consideration is needed to conclude an employment contract. The employment contract is deemed to have been concluded where the employer accepts the performance of work over a certain period in its service which, in the circumstances, could reasonably be expected only in exchange for salary.

As a rule, employment contracts are not subject to any specific formal requirements. However, written contracts are recommended and very common. If the employment contract has been concluded for an indefinite duration or for longer than one month, then within one month of the beginning of the employment relationship, the employer must inform the employee in writing of:

  • the names of the contracting parties;
  • the date of commencement of the employment relationship;
  • the employee's function;
  • the salary and any additional benefits; and
  • the length of the working week.

Some clauses must be agreed upon in writing to be valid. In particular, non-compete clauses for a specific duration after termination of employment must be in writing in order to be valid and binding.

Parties under an employment contract must adhere to mandatory statutory laws and any applicable collective labour agreement. 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.

2 Employment rights and representations

2.1 What, if any, are the rights to parental leave, at either a national or local level?

The most important rules on a federal level regarding parental leave are as follows:

  • As a rule, men have the right to attend birth, but are not entitled to parental leave.
  • Mothers of new-born children are entitled to at least 14 weeks' maternity leave. Social insurance provides for partial coverage against loss of salary if the legal requirements are met (SR 834.1).
  • Mothers of new-born children are prohibited from working for the first eight weeks following childbirth.
  • In the eight weeks before the baby's due date, pregnant employees are prohibited from working between 8:00pm and 6:00am.
  • Pregnant employees may refuse to work at any time if they feel unwell. However, they will lose salary payments if they are unable to submit a medical certificate.
  • Article 336(c) of the Code of Obligations prohibits employers from giving termination notices to female employees during pregnancy or for 16 weeks following the birth of a child.

2.2 How long does it last and what benefits are given during this time?

Mothers of 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).

2.3 Are trade unions recognised and what rights do they have?

Trade unions are recognised if they meet certain requirements. 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.

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).

The Federal Constitution sets out the requirements for collective actions. Recognised unions may organise strikes or employee lock-outs (Article 28 of the Federal Constitution; SR 101). 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). 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 in 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 the end of a strike. Criminal acts are prohibited at all times.

2.4 How are data protection rules applied in the workforce and how does this affect employees' privacy rights?

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.

2.5 Are contingent worker arrangements specifically regulated?

Statutory law provides that a fixed-term employment relationship ends without notice. However, if a contingent worker relationship is tacitly extended beyond the agreed duration, the employment relationship is deemed to be open ended and notice must be given to terminate employment.

After 10 years, any employment relationship contracted for a longer duration may be terminated by either party by giving six months' notice, expiring at the end of a month.

Further, there are specific regulations on temporary work arrangements in terms of staffing arrangements provided by employment agencies. Those arrangements are often entered into for a limited period and provide for flexible workforces (Federal Act on Placement Agencies and Staffing Leasing Services; SR 823.11).

3 Employment benefits

3.1 Is there a national minimum wage that must be adhered to?

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

3.2 Is there an entitlement to payment for overtime?

As a rule, employers must compensate overtime with a supplemental pay of at least 25%. By mutual agreement, overtime may be compensated by time off in lieu, which must be of (at least) equal duration.

There are two categories of overtime under Swiss law:

  • Overhours: If the number of hours worked exceeds the contractually agreed working time, those 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, the maximum weekly working hours are 45 or 50 hours, depending on the category of worker.

For overhours only, the parties may agree in writing that they will be included in the normal salary, and that there will be no extra compensation or time off in lieu.

An employee is exempt from performing overtime work to the extent that he or she 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 his or her obligations.

3.3 Is there an entitlement to annual leave? If so, what is the minimum that employees are entitled to receive?

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 several paid public holidays (eg, 1 August).

3.4 Is there a requirement to provide sick leave? If so, what is the minimum that employees are entitled to receive?

The most important rules regarding sick 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.

3.5 Is there a statutory retirement age? If so, what is it?

In Switzerland, the statutory retirement age is 65 for men and 64 for women. Employees may opt for early retirement pursuant to the applicable pension benefits plan or choose to postpone retirement.

4 Discrimination and harassment

4.1 What actions are classified as unlawfully discriminatory?

The Federal Act on Gender Equality (SR 151.1) provides that employees must not be discriminated against on the basis of gender, whether directly or indirectly, including on the basis of marital status, family situation or, in the case of female employees, 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.

Specifically, any harassing behaviour of a sexual nature or other behaviour related to the person's gender that adversely affects the dignity of women or men at the workplace is discriminatory. Such behaviour includes, in particular, threats, the promise of advantages, the use of coercion and the exertion of pressure in order to obtain favours of a sexual nature.

4.2 Are there specified groups or classifications entitled to protection?

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, race, religion, disability or gender, and despite the fact that the employee has performed his or her job well (Article 336(1)(a) of the Code of Obligations).

4.3 What protections are employed against discrimination in the workforce?

In Switzerland, there is no statutory provision which describes what specific protection must be employed against discrimination in the workforce. The duty to protect against discrimination emanates from the employer's duty to protect employees' personality and privacy rights. The employer must safeguard employees' personality rights, have due regard for their health and ensure that proper moral standards are maintained. In particular, it must ensure that employees are not sexually harassed.

In order to safeguard the personal safety, health and integrity of its employees, an employer must take all reasonable and appropriate measures that are shown by experience to be necessary and that are feasible under the circumstances using the latest technology.

Specifically, employers may arrange for meetings between co-workers, coaching sessions and other measures to stop discriminatory behaviour at the workplace.

4.4 How is a discrimination claim processed?

Employees which feel discriminated against in the workplace may file a complaint with the employer. The employee is then protected against unfair dismissal for the duration of any proceedings to examine the complaint at the place of work, and of any conciliation or court proceedings, and for six months thereafter.

In case of dismissal, the employee may challenge the termination if it takes place without good cause following a complaint of discrimination by the employee to a superior or the filing of a complaint with a conciliation board or a court.

The dismissal must be challenged in court before the expiry of the period of notice of termination. The court may order the temporary reinstatement of the employee for the duration of the proceedings if it appears likely that the requirements for overturning the dismissal are well founded. Instead, the employee may opt not to continue employment and may claim for compensation on the grounds of unfair dismissal.

Job candidates whose application has been refused and who claim discrimination may request a written statement of reasons from the employer. A claim must be brought within three months of the employer giving notice of refusal of employment.

4.5 What remedies are available?

If there is unlawful discrimination at the workplace, the following remedies are available:

  • court order prohibiting or preventing threatened discrimination;
  • court order requiring actual discrimination to cease;
  • court ruling confirming that discrimination is taking place if it is continuing to have a disruptive effect;
  • claim for the payment of any salary due that is calculated free of any discriminatory element;
  • claim for compensation on the grounds of discrimination. Courts will fix the amount of compensation by taking all circumstances into account. As a rule, compensation will not exceed an amount equivalent to six months' salary; and
  • claim for compensatory damages based on other grounds than discrimination.

4.6 What protections and remedies are available against harassment, bullying and retaliation/victimisation?

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).

Employees may claim for medical costs and other damages, if the employer fails to stop bullying and victimisation among co-workers.

5 Dismissals and terminations

5.1 Must a valid reason be given to lawfully terminate an employment contract?

To lawfully give notice of termination, no valid reason need be given. However, the party giving notice of termination must state the reason in writing if the other party so requests.

5.2 Is a minimum notice period required?

Employers are required to give notice of termination. Notice can be given orally, unless the employment contract states otherwise. As a rule, statutory law provides for the following notice periods:

  • During the probationary period, either party may terminate the contract at any time by giving seven days' notice. The probationary period is considered to be the first month of an employment relationship.
  • After expiry of the probationary period, the employment relationship may be terminated at one month's notice during the first year of service, at two months' notice in the second to ninth years of service and at three months' notice thereafter.

These notice periods may be varied by written individual, standard or collective employment contract. However, they may be reduced to less than one month only by collective employment contract and only for the first year of service.

Notice periods must be the same for both parties. Where an agreement provides for different notice periods, the longer period is applicable to both parties. However, where the employer has given notice to terminate the employment relationship or expressed an intention to do so for economic reasons, the employee may be permitted a shorter notice period by individual agreement, standard employment contract or collective employment contract.

5.3 What rights do employees have when arguing unfair dismissal?

In case of unfair dismissal, the employee has a claim for compensation against the employer. The court determines the amount of compensation taking due account of all circumstances of the case. Compensation for unfair dismissal will not exceed an amount equivalent to six months' salary for the employee. The employee may, however, bring claims for additional damages that are based on other grounds than unfair dismissal.

The employee seeking compensation for unfair dismissal must submit an objection letter to the employer by no later than the end of the notice period. The employee may want to request that the employer state the reasons for the dismissal in writing prior to submitting the objection letter.

Where the objection has been properly submitted and the parties cannot reach agreement, the employee must bring his or her claim within 180 days of the end of employment. The claim becomes time-barred if not brought within this legal deadline.

5.4 What rights, if any, are there to statutory severance pay?

In the unlikely absence of pension benefits funds, federal law provides for the following rules:

  • Where an employment relationship with an employee of at least 50 years of age comes to an end after 20 years or more of service, the employer must pay the employee a severance allowance.
  • The severance allowance may be reduced or dispensed with if the employee has terminated the employment relationship without good cause, or if the employer itself has terminated it with immediate effect for good cause or the payment of such allowance would inflict financial hardship on it.
  • Where the employee receives benefits from an occupational benefits scheme, these may be deducted from the severance allowance to the extent that they were funded by the employer either directly or through its contributions to the occupational benefits scheme. In Switzerland, employers are in most cases under a legal obligation to have such an occupational pension benefits scheme. It follows therefrom that employees do not have a right to claim for severance pay in almost every instance.

Social plans may provide for severance pay if there are mass redundancies.

6 Employment tribunals

6.1 How are employment-related complaints dealt with?

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).

6.2 What are the procedures and timeframes for employment-related tribunals actions?

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.

The typical timescale for proceedings in the first instance is six to 18 months.

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

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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