Switzerland is a country located in central Europe, rich in natural highlights such as the Alps and some of the most picturesque lakes in the world. The country is a major tourist destination, known for its resorts and hiking possibilities, located in the beautiful mountainous parts of the country. It has historically been a welcoming banking hub, known for respecting the privacy of those who want to do business there. As a result of its landlocked geographical reality, Switzerland has always preferred to be a neutral state in all global conflicts. Its political stability has made Switzerland one of the wealthiest countries in the world. The country has a rich and diverse culture, with the majority of its population deriving their heritage from the French, Germans, and Italians, reflected in both languages spoken, as well as their cuisine.
Per Swiss employment law, individual labor contracts regulate the rights and obligations of employers and employees.
Contracts for an indefinite duration are considered to be permanent and can be concluded in writing or orally. Employers must provide a written statement of employment terms in case of indefinite-term contracts or contracts that last for more than 1 month. Such agreements end with a notice of dismissal. The first month of employment is considered a probation period for permanent employees.
Written contracts are not required by Swiss law. For employment agreements concluded for an indefinite duration or for longer than 1 month, employers must provide written notification to employees within 1 month of the beginning of the employment relationship. The following information must be included:
The names of the contracting parties
The date of the beginning of the employment relationship
The employee’s function and responsibilities
The salary and any additional benefits
The length of the workweek
Employers in Switzerland have the authority to request their employees to provide a written undertaking that they will abstain from engaging in any competitive activities post-employment, notably refraining from establishing a competing business or working for one. This prohibition on competition is enforceable only if the employee has access to sensitive information like client lists or trade secrets, which could significantly harm the employer if utilized. The restrictions on competition must be reasonable in terms of duration, geographical area, and scope, ensuring that they do not unduly hinder the employee's future economic endeavors, except in special circumstances where they can be extended to more than 3 years. Courts have the discretion to intervene if the restrictions are deemed excessive, considering all relevant circumstances, including any justifications provided by the employer.
In Switzerland, employers can hire temporary workers through temporary staffing agencies. There is a triangular agreement between the client employer, staffing agency, and temporary employees. The agreement between the client employer and the employment agency regulates how much the client company pays the employment agency for the temporary workers. The staffing agency pays temporary workers their wages. The staffing agency is responsible for looking for jobs on the temporary worker's behalf, and provides them with support throughout the entire process.
The temporary employment agency must conclude a contract with the employee in writing with the following information:
Type of work to be performed
Place of work and the start of the assignment
Duration of the assignment or the notice period
Working hours
Salary, any expenses and allowances, as well as the deductions for social security
Benefits in case of overtime, illness, maternity, accident, military service, and vacation
Dates for the payment of wages, allowances, and other benefits
The staffing agency pays temporary workers their wages. The staffing agency is responsible for looking for jobs on the temporary worker's behalf, and provides them with support throughout the entire process. Temporary assignments can also be for an indefinite term, but they can be terminated by either party by giving a notice period of 2 days in the first 3 months of employment or 7 days from the fourth to the sixth month of employment.
The first month of the employment relationship in case of employment contracts for an indefinite duration is considered the probationary period. It may not exceed 3 months for permanent employment agreements and is waived for fixed-term contracts. There is no statutory provision of leave during probation; employees and employers can decide upon leaves.
During the probation period, either party may terminate the contract at any time by giving 7 days’ notice to the other party.
If the employee is absent from work during the probationary period due to sickness, accident, or the performance of a legal duty that is not voluntarily assumed, probationary period is prolonged accordingly. Employers have the right to terminate the employment contract in such a situation. Probationary employees do not have the same level of protection against dismissal in case of illness or accidents or pregnancy as permanent employees.
Under the Federal Labour Act of Switzerland, the maximum for weekly working hours is 45 for industrial workers, office, technical, and other employees, including salespersons in large retail stores. For all other commercial enterprises, the legal maximum working hours are 50 per week. Regular weekly working hours are determined by employment or collective bargaining agreements.
Nighttime work cannot exceed 9 hours per shift; however, if the employee works only for a maximum of 3 out of 7 consecutive nights, the working time may be increased to 10 hours per shift.
Permanent or regular evening, night, and Sunday work must be considered indispensable for either technical or economic reasons. Time off equal to 10% of the hours of night work performed must be provided for night work carried out on 25 or more nights per calendar year.
Under the Swiss Code of Obligations, both full-time and part-time employees are entitled to a minimum of 4 weeks of paid annual vacation after the first year of service (5 weeks for employees under 20 years of age). If the employee has worked for less than 1 year, the duration of annual leave is fixed pro-rata.
If employees fall sick during their leave, they are entitled to postpone their leave by providing a medical certificate to their employees. They can also take any remaining days of leave during their notice period or a cash payment in lieu of leave days.
Employees need their employer's approval to take time off. If their leave days are not compatible with the company's needs or interests, their employer can ask them to reschedule. At least 2 weeks of annual leave must be taken consecutively.
Employers must pay their employees the full salary due for the holiday entitlement and fair compensation for any lost benefits in kind. During the employment relationship, the holiday entitlement may not be replaced by monetary payments or other benefits.
Employees are entitled to full salary payment during sick leave if they have worked for more than 3 months. During the first year of employment, the entitlement to sick pay is limited to 3 weeks: after that, it is extended based on the years of service. The duration of leave also varies among cantons: in the canton of Zurich, for instance, sick pay is due for 3 months at 100% and 3 months at 75% of the wages in the first year of service, 6 months at 100% and 6 months at 75% in the second year, and 12 months at 100% from the third year of service.
Employees must submit a medical certificate to their employers no later than on the third day of illness to receive the benefit.
By written agreement, the employer's statutory obligation to sick pay can be replaced by insurance that issues daily allowances of up to 80% of the employee's wages. Employers pay at least half of the premium amounts. The wage payment may continue for the duration of the employee's inability to work but cannot exceed 720 or 730 days within 900 consecutive days.
Under the Swiss Code of Obligations, the right to maternity leave applies to full-time, part-time employees, and self-employed persons if they were insured under the OASI/AHV scheme for 9 months prior to childbirth and have worked for at least 5 months during their pregnancy. The minimum length of maternity leave is 14 weeks, starting from the delivery date. Employees who return to work before the end of the maternity leave lose their entitlement to compensation. Women are not allowed to work for 8 weeks after giving birth. If an employee adopts a child, they are entitled to 2 weeks of adoption leave.
In the event of the newborn child's hospitalization, the paid maternity leave is extended to a maximum of 56 days. If the other parent passes away within 6 months after the child’s birth, the female employee is entitled to an additional 2 weeks of leave. This leave may be taken either in full weeks or on a daily basis, within 6 months from the day following the parent’s death.
The employer is prohibited from terminating the employee's labor contract during her maternity leave and for 16 weeks after childbirth. Discrimination based on pregnancy is not permitted at any stage of the employment relationship, including during hiring.
Switzerland grants 2 weeks (14 days) of paternity leave to employees. It is available to the child's legal father, or to the mother's wife who is recognized as the other parent. This leave can be taken within 6 months of birth and can be taken in full weeks or on a day-to-day basis. If the mother dies on the day of the birth or during the 97 days thereafter, the other parent is entitled to 98 additional daily allowances (the equivalent of 14 weeks), taken as one continuous period. If an employee adopts a child, they are entitled to 2 weeks of adoption leave.
The father or the mother's wife must have been compulsorily insured with the AHV (Old-Age and Survivors' Insurance) during the 9 months immediately preceding the birth of the child, and must have been gainfully employed for at least 5 months during this period.
Compensation is paid for income lost while on paternity leave as 80% of the average earned income before the birth of the child, up to a maximum of CHF 220 (Swiss Francs) per day. Fathers have no legal right to extend their paternity leave. They must arrange with their employer if they wish to do so.
Employees who take their leave in weekly increments receive 7 daily allowances per week. Those who take their leave in daily increments receive an additional 2 daily allowances for every 5 days of leave taken.
Per the labor law of Switzerland, the statutory notice periods are:
7 days during probation
30 days in case of mass redundancy
1 month from the last day of the month in the first year of service
2 months from the last day of the month for the second through the ninth year
3 months from the last day of the month from the tenth year of service
Notice can be given in writing or orally. Parties may agree on a different notice period. Such an agreement must be in writing, and the agreed notice period must not be less than 1 month.
Fixed-term employment contracts generally end on the agreed-upon date. However, they may be terminated early in the following circumstances:
Serious cases
The contract contains provisions for early termination
Mutual agreement between the employer and employee
Fixed-term agreements for more than 10 years require 6 months' notice.
Severance is paid only in case of dismissal of employees above 50 years of age with tenure of at least 20 years. The minimum severance payment cannot be below 2 months and exceed 8 months of salary. If the employee receives benefits from an occupational benefits scheme, these benefits may be deducted from the severance allowance to the same extent they were funded by the employer either directly or through the contributions to the occupational benefits scheme.
