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Swiss Employment Law: Whether You’re An Employee or Employer, Know Your Rights

Written by Ralf Voger, Attorney at Law at Studhalter & Pfister Rechtsanwälte AG.

Following is a summary of some of the most important regulations in Swiss employment law. In particular, the requirements for the conclusion of an employment contract, the respective rights and obligations of the employee and employer as well as the regulations for terminating a contract are explained.

Requirements for an Employment Contract

In order to conclude an employment contract, the parties must agree, in principle, that work is owed, that this work is remunerated and that it is to be performed for an indefinite or specified period of time. There must be no agreement about the exact amount of the remuneration. The employment contract can be concluded verbally or in writing.

An employment contract may also exist without agreement on the aforementioned three points if the employer accepts the performance of work for which the payment of a salary is required.

Obligations of the Employee

The following duties of the employee are legally anchored:

  • Duty to work in person (no substitution)
  • Duty of care and loyalty
  • Compliance with general directives and instructions
  • Overtime

Overtime

An obligation to work overtime exists if the overtime is necessary, the employee can perform the overtime (physically or mentally) and the overtime hours are reasonable.

As a rule, the employer has to pay a wage for overtime which is calculated on the basis of the normal wage plus a surcharge of at least 25%. In the employment contract, however, it can be agreed that the overtime hours are already covered by the wage or that the overtime work is compensated at the hourly wage without a surcharge. It can also be agreed that overtime work is compensated by free time of at least the same duration.

If the employee exceeds the statutory maximum working time of 45 hours or 50 hours per week, depending on the sector, the overtime does not represent overtime but extra hours. Extra hours can be compensated by free time of at least the same duration. If no compensation in the form of free time is contractually agreed, extra time must be remunerated in addition to hourly wages together with a surcharge of at least 25%.

The regulations on extra hours are mandatory and cannot be amended by an employment contract.

Obligations of the Employer

  • Payment of the agreed salary
  • Provision of work tools and materials
  • Reimbursment of necessary expenses
  • Protection of the employee’s personal rights
  • Granting of holidays
  • Provision of employment references (true / benevolent)

Holidays

The employee is entitled to at least four weeks‘ paid holiday per year. As long as the employee’s requests regarding the period of leave are compatible with the company’s interests, the employer must take these requests into account.

Maternity and Paternity Leave

The employee is entitled to maternity leave of at least 14 weeks following the birth of a child. During this period she is entitled to 80% of her salary.

Swiss employment law does not provide for paternity leave. The employer is free to grant his or her employees a contractual right to paternity leave. Swiss companies generally grant paternity leave of two to four days in duration.

Employee Unable to Work

If the employee is prevented from working due to no fault of his or her own, due to personal circumstances that lie in his person, the law provides, amongst other things, that in cases of illness, accident, military service or pregnancy, the employer must continue to pay wages for a limited period of time. During this period, the full salary must be paid. In the first year of service, the employee is entitled to continued pay for three weeks and thereafter, for a reasonable longer period.

By written agreement, a regulation deviating from the law can be met. Many Swiss employment contracts provide for a daily sickness benefit insurance (KTG). This replaces the statutory regulation on the obligation to continue to pay wages. As a rule, daily sickness benefit insurance pays the employee 80% of the salary for a maximum of 720 days.

Termination

The termination is not bound to specific reasons and either party may decide, at any time, to terminate the employment contract.

If no formal requirement has been agreed in the employment contract, notice of termination may be given orally or in writing. For reasons of proof, written notice of termination is recommended. The employee who has been dismissed is generally advised to obtain written reasons for the dismissal.

Unless otherwise agreed in writing in the employment contract, the following periods of notice shall apply with a termination date at the end of a month:

  • 1 month during the first year of employment
  • 2 months for 2 – 9 years of employment
  • 3 months thereafter

Abusive Notice of Termination

A dismissal is deemed abusive if it is based, inter alia, on age, gender, nationality, political or religious convictions or in order to avoid a request from an employee.

The abusively terminating party must pay compensation to the terminated party. The compensation shall be determined by the court and may amount to up to six months’ wages. The amount of compensation depends on the seriousness of the abuse and the circumstances of the individual case.

In order for the terminated party to be able to claim compensation, he or she must follow two steps:

  • Step 1: Write an objection to the termination within the  notice period
  • Step 2: File a claim for damages within 180 days of the termination of the employment relationship

In order not to miss the aforementioned deadlines, it is advisable to seek legal assistance at an early stage.

Termination Restrictions

The employer is not permitted to issue a notice of termination during certain, legally determined blocked periods. For example:

  • during pregnancy and for 16 weeks after birth
  • during an illness or accident
  • during military or civil service

Notice of termination during these blocked periods shall be considered null and void.

Extraordinary Termination

If there is a so-called good cause, either party may terminate the employment relationship without notice at any time. An important reason is when there has been a breach of trust between the employer and the employee and therefore, the continuation of the employment relationship can no longer be expected.

If the employer terminates the employment contract without notice and for no important reason, the employee is entitled to payment of the salary for the duration of the notice period. In addition, the employee is entitled to compensation for up to a maximum of six months’ salary.

If the employee terminates the employment contract without notice and without good cause, the employer is entitled to compensation amounting to one quarter of the employee’s salary for one month, subject to additional damages.

Ralf Voger is an Attorney at Law at Studhalter & Pfister Rechtsanwälte AG, rv@stu-law.ch.

For further information regarding our services: www.stu-law.ch

charlie.hartmann@livinginluzern.swiss

Charlie Hartmann is the managing director of the Living in Luzern organisation which focuses on helping international residents connect, grow and thrive in Switzerland.

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