In Liechtenstein, the employment law framework primarily consists of two types of employment contracts: individual employment agreements and collective employment agreements. Additionally, these contracts can be influenced by collective agreements that dictate specific terms within an individual contract.

Individual Employment Agreements

Individual employment agreements are contracts established between a single employer and a single employee. These contracts can be either written or oral, although a written document is highly recommended. If an agreement is established orally, the employer may be obliged to provide a written document to the employee outlining the key terms of employment.

The individual agreements should detail various aspects of the employment relationship, including:

• Personal details of both parties (employer and employee)
• Commencement date of employment
• Type of employment (full-time, part-time, etc.)
• Working hours, breaks, and overtime details
• Workplace information (type of work and performance expectations)
• Job title
• Wages and salary details, including payroll cycle, gratuities, and expense reimbursements
• Terms of termination, notice periods, and severance pay
• Holiday and leave entitlements (annual leave, sick leave, maternity leave)

Fixed-Term vs. Indefinite Contracts

Individual employment agreements can be established as either fixed-term contracts for a specified period or indefinite contracts with no end date.

• Fixed-Term Contracts: These are typically used for temporary positions or project-based work.
• Indefinite Contracts: These are the most common type of employment contract in Liechtenstein and are offered after a successful probationary period.

Collective Employment Agreements (Gesamtarbeitsverträge)

Collective employment agreements, known as "Gesamtarbeitsverträge" (GAV) in German, establish industry-wide standards for employment conditions. They typically cover aspects such as working hours, minimum wage, holiday entitlement, and notice periods.

Collective agreements can be negotiated between employer associations and employee unions and may be declared generally binding by the government. This means the terms of the GAV would then apply to all employers and employees within that specific industry, regardless of whether they were part of the original negotiations.

Employment agreements in Liechtenstein establish the rights and obligations of both employers and employees. To ensure a comprehensive and legally sound agreement, several key clauses should be included.

Basic Employment Details

These include the employee's name, position, and official title, as well as the name and location of the employer. The start date and duration of employment should also be clearly defined, specifying whether it's a fixed-term or open-ended contract.

Work and Compensation

The primary work location should be specified, along with whether remote work is permitted. The agreement should outline the daily or weekly working hours and rest periods, and clearly describe the employee's primary tasks and expected performance. The employee's salary, including base pay, bonuses, allowances, and any applicable deductions, should be detailed, along with the frequency and method of salary payment.

Leave and Entitlements

The agreement should define the annual leave entitlement and any specific regulations regarding vacation days. Procedures for sick leave, potential sick pay, and disability benefits should also be outlined.

Termination

The notice period required for termination by both employer and employee should be clearly defined. The grounds for termination with or without cause, following Liechtenstein's labor laws, should also be specified.

Additional Clauses

If applicable, a clause protecting the employer's confidential information and intellectual property can be included. The agreement can also establish ownership rights over any intellectual property created by the employee during employment. The process for resolving any disagreements arising from the employment contract should be outlined, along with the governing law and jurisdiction in case of legal disputes.

In Liechtenstein, the probationary period serves as an initial evaluation stage for both employers and employees. It's important to note that probation periods are common but not legally required. The typical probationary period is one month, with a maximum extension of three months stipulated in the employment contract. This period allows employers to assess the employee's suitability for the role and vice versa.

During Probation

During probation, a shorter notice period applies for termination by either party. Typically, only seven days' notice is required. Certain employment protections, like those against dismissal due to illness or pregnancy, might not apply during probation.

For Employers

Employers should clearly define the objectives and expectations for the probation period within the employment agreement. Implementing a structured process to evaluate the employee's performance during probation is also recommended. Providing constructive feedback to the employee throughout the probation period is crucial.

For Employees

Employees may have some room to negotiate the length of the probationary period during the contract stage. It's important to ensure a clear understanding of the employer's expectations and how performance will be assessed. Maintaining open communication with the employer regarding progress and any questions is also advised.

In Liechtenstein, employment agreements can incorporate clauses to safeguard the employer's confidential data and limit competition from previous employees. However, these clauses are subject to specific legal considerations.

Confidentiality Clauses

Confidentiality clauses are designed to protect the employer's trade secrets, customer lists, and other sensitive data. While Liechtenstein's labor law does not explicitly regulate confidentiality clauses, they are generally enforceable by courts provided they meet certain criteria.

• Legitimate Interest: The confidentiality clause must protect a legitimate business interest of the employer.
• Specificity: The clause should clearly define the confidential information protected.
• Reasonable Scope: The scope of confidential information and the duration of confidentiality obligations should be reasonable and not overly broad.

For instance, a confidentiality clause could restrict the employee from disclosing the employer's customer list to competitors but wouldn't prevent them from disclosing general industry knowledge.

Non-Compete Clauses

Non-compete clauses limit an employee's ability to work for a competitor or start a competing business after leaving the company. Liechtenstein's approach to non-compete clauses is stricter compared to some other jurisdictions.

• Strict Scrutiny: Courts will heavily scrutinize non-compete clauses to ensure they are reasonable and don't unduly restrict the employee's ability to earn a living.
• Geographical and Time Limits: Non-compete clauses are generally only upheld if they are limited to a specific geographic area and a reasonable timeframe (typically up to one year).

For example, a non-compete clause for a salesperson in Liechtenstein might be restricted to a 6-month period following termination and only cover a specific region where the salesperson had established client relationships.

Important Note

The enforceability of non-compete clauses can vary depending on the specific circumstances of the employment relationship and the employee's position. Therefore, it's advisable for employers to consult with legal counsel when drafting non-compete clauses.