Employment agreements in Switzerland are governed primarily by the Swiss Code of Obligations (CO), specifically Articles 319 to 362. While the CO provides the fundamental framework, collective bargaining agreements (CBAs) and standard employment contracts (SECs) can supplement or modify these provisions, often offering more favorable terms for employees. Understanding these legal foundations is crucial for employers hiring in Switzerland to ensure compliance and establish clear terms of employment.
A well-drafted employment contract is essential for both employers and employees, outlining the rights and obligations of each party. It serves as the primary document defining the working relationship, covering aspects from duties and compensation to working hours and termination conditions. Adhering to Swiss legal requirements when creating these agreements is vital to avoid potential disputes and ensure a smooth employment lifecycle.
Types of Employment Agreements
Swiss law primarily recognizes two main types of employment contracts: indefinite and fixed-term. The choice between these types depends on the nature and expected duration of the work.
| Contract Type | Description | Key Characteristics |
|---|---|---|
| Indefinite | Standard type, continues until terminated by notice or other legal reason. | No predetermined end date; requires notice period for termination; most common type. |
| Fixed-Term | Ends automatically on a specified date or upon completion of a specific task. | Predetermined end date; no notice required for termination (unless specified); limited use to avoid circumvention of indefinite contract rules. |
While the CO primarily regulates individual employment contracts, collective bargaining agreements (CBAs) negotiated between employer associations and trade unions are common in many sectors. These CBAs often set minimum standards for wages, working hours, holidays, and other conditions, which supersede individual contract terms if more favorable to the employee. Standard employment contracts (SECs) are issued by cantonal or federal authorities for specific professions or sectors where no CBA exists, also setting minimum conditions.
Essential Clauses
Swiss law mandates that certain terms must be included in an employment contract, or at least clearly defined within the employment relationship. While written form is not strictly required for all employment contracts (oral agreements are possible but not recommended), certain elements must be in writing if agreed upon, such as a probationary period deviating from the standard or a non-compete clause. Best practice dictates a comprehensive written agreement covering all key aspects.
Mandatory and common clauses typically include:
- Parties: Full names and addresses of the employer and employee.
- Start Date: The date the employment begins.
- Function/Role: A description of the employee's position and main duties.
- Salary: The amount of salary, how it is calculated (e.g., monthly, hourly), and payment frequency.
- Working Hours: The agreed-upon weekly working hours.
- Holidays: The minimum number of paid holiday days per year (legally mandated minimums apply).
- Social Security Contributions: Information regarding deductions for social insurance.
- Probationary Period: If applicable, the duration of the probationary period.
- Notice Periods: The applicable notice periods for termination (can be based on CO, CBA, or contract).
Other important clauses often included cover topics like overtime compensation, sickness and accident pay, confidentiality, intellectual property, and applicable collective bargaining agreements or company policies.
Probationary Period
The probationary period in Switzerland allows both the employer and the employee to assess the suitability of the employment relationship. According to the Swiss Code of Obligations, the first month of employment is automatically considered a probationary period unless otherwise agreed upon in writing.
Key regulations regarding the probationary period:
- Standard Duration: One month, unless otherwise agreed.
- Maximum Duration: Can be extended by written agreement up to a maximum of three months.
- Notice Period during Probation: During the probationary period, the employment contract can be terminated by either party with seven days' notice, effective at any day.
- Suspension: The probationary period is suspended during periods of illness, accident, military service, or other mandatory service.
It is crucial that any agreement to extend the probationary period beyond one month is made in writing before the start of employment or during the initial standard probationary month.
Confidentiality and Non-Compete Clauses
Confidentiality and non-compete clauses are common in Swiss employment contracts, particularly for roles involving sensitive information or client relationships.
- Confidentiality Clauses: These are generally enforceable and require the employee to keep company secrets and confidential information confidential during and after the employment relationship. The scope and duration should be reasonable.
- Non-Compete Clauses (Post-Termination): These clauses restrict an employee from working for a competitor or operating a competing business after leaving the company. For a non-compete clause to be legally valid and enforceable in Switzerland, it must meet several strict criteria:
- It must be in writing.
- The employee must have gained insight into the employer's clientele or manufacturing/business secrets.
- The use of this knowledge must be capable of causing the employer significant harm.
- The restriction must be reasonable in terms of time, place, and scope.
- It cannot unduly hinder the employee's economic advancement.
Swiss courts tend to interpret non-compete clauses restrictively. A clause that is too broad in scope, duration, or geographical area may be deemed unenforceable or its scope may be reduced by a court. The maximum duration is generally three years, but shorter periods are more likely to be upheld.
Contract Modification and Termination
Modifying an existing employment contract in Switzerland typically requires the mutual agreement of both the employer and the employee. Significant changes to essential terms (like salary, position, or working hours) constitute a material change and cannot be unilaterally imposed by the employer. If an employee does not agree to a material change proposed by the employer, the employer's only recourse may be to terminate the existing contract (observing notice periods) and offer a new contract with the modified terms. This is sometimes referred to as a "termination for change" (Änderungskündigung).
Termination of an indefinite employment contract requires notice. The statutory notice periods under the Swiss Code of Obligations depend on the employee's years of service:
- During Probation: 7 days (effective any day).
- After Probation (1st year of service): 1 month (effective end of a month).
- 2nd to 9th year of service: 2 months (effective end of a month).
- From 10th year of service onwards: 3 months (effective end of a month).
These statutory notice periods can be extended by written agreement or by a collective bargaining agreement, but they cannot be shortened by individual contract to the detriment of the employee. Termination must be justified; while Swiss law operates under a principle of freedom of termination, termination is considered unfair if based on certain prohibited grounds (e.g., discrimination, retaliation, during protected periods like illness or pregnancy). Fixed-term contracts generally end automatically on the agreed-upon date without notice, unless early termination clauses are included.
