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Employment Law Overview Switzerland

Introduction

The legal regime governing employment relationships in Switzerland is generally more liberal and favorable towards the employer than in many other European countries. This is partly because labour unions are somehow less influential in Switzerland compared to, for example, labour unions in European Union countries, but also because the unemployment rate traditionally has been and remains relatively low in Switzerland.

According to the principle of freedom of contract, the parties of an employment agreement are free to agree on the content and terms of their agreement to an extent that is substantially greater than in most other European jurisdictions. Swiss employment law, however, does contain some basic mandatory provisions. Most important, are the mandatory provisions aiming to protect the safety and the health of the employee. Public labour protection regulations cover, among other things, working hours and breaks, special protection for young employees, pregnant women and breastfeeding mothers, work-related injury insurance and industrial accident prevention.

For issues relating to employment law, the provisions of the employment contract should be the first point of reference, taking into account mandatory statutory provisions. If the employment contract is silent on a certain issue, then the non-mandatory statutory provisions apply.

Key Points

  • Switzerland has a dual system for the admission of foreign workers (preferential treatment of EU/EFTA nationals).
  • Every employee has the right to decide whether to join a trade union or not. The unions are financed through the contributions of their members.
  • A Swiss employer is fully liable for social security contributions in respect of his employees.
  • Where the employer transfers a business or a part of a business to a third party, the employment relationship and all attendant rights and obligations pass to the acquirer as of the day of the transfer, unless the employee refuses to transfer.
  • In principle, no particular cause to terminate an employment relationship is required.
  • Swiss Code of Obligations (CO), Articles 319 to 362 [Bundesgesetz betreffend die Ergänzung des Schweizerischen Zivilgesetzbuches (Fünfter Teil: Obligationenrecht), SR 220]
  • Swiss Federal Act on Employment in Trade and Industry [Bundesgesetz über die Arbeit in Industrie, Gewerbe und Handel, SR 822.11]
  • Swiss Federal Act on Old-Age and Survivors’ Insurance  [Bundesgesetz über die Alters- und Hinterlassenenversicherung, SR 831.10]
  • Swiss Federal Act on Disability Insurance  [Bundesgesetz über die Invalidenversicherung, SR 831.20]
  • Swiss Federal Act on Occupational Pension Plans [Bundesgesetz über die berufliche Alters-, Hinterlassenen- und Invalidenvorsorge, SR 831.40]
  • Swiss Federal Act on Accident Insurance [Bundesgesetz über die Unfallversicherung, SR 832.20]
  • Swiss Federal Act on the Compulsory Unemployment Insurance and the Insolvency Compensation  [Bundesgesetz über die obligatorische Arbeitslosenversicherung und die Insolvenzentschädigung, SR 837.0]
  • Swiss Federal Act on Health Insurance  [Bundesgesetz über die Krankenversicherung, SR 832.10]
  • Swiss Federal Act on Gender Equality [Bundesgesetz über die Gleichstellung von Frau und Mann, SR 151.1]
  • Swiss Federal Act on Employee Information and Participation in Operations [Bundesgesetz über die Information und Mitsprache der Arbeitnehmerinnen und Arbeitnehmer in den Betrieben, SR 822.14]
  • Swiss Federal Act on Employment Exchange and Personnel Leasing[Bundesgesetz über die Arbeitsvermittlung und den Personalverleih, SR 823.11]
  • Swiss Federal Act on Employees Sent to Switzerland  [Bundesgesetz über die minimalen Arbeits- und Lohnbedingungen für in die Schweiz entsandten Arbeitnehmerinnen und Arbeitnehmer und flankierende Massnahmen, SR 823.20]
  • Swiss Federal Act on Income Compensation for Service Providers and for Maternity  [Bundesgesetz über den Erwerbsersatz für Dienstleistende und bei Mutterschaft, SR 834.1]

New Developments

Minimum Salaries: Switzerland does not know federal minimum wages other than those introduced by collective bargaining agreements. Having said this, cantonal or regional minimum wages are becoming more popular. In recent years, Basel City, Jura, Neuchatel, Ticino and Geneva have introduced cantonal minimum wages. In the cantons of Valais and Solothurn, corresponding votes are pending. Voters in the city of Zurich and Winterthur have also voted in favour of a communal minimum wage. However, the introduction of the municipal minimum wages has been delayed as the employers’ associations have appealed against it.

Important New Case Law on Blocking Periods: In its Judgement 1C_595/2023 of March 26, 2024, the Federal Supreme Court (FSC) ruled that in cases where an incapacity to work is limited to the current workplace, the temporary protection provisions regarding dismissal (blocking periods) do not apply. Further information on this topic may be found in our June 2024 Employment Law Tracker.

Any questions

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