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Switzerland

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
  • 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
  • In principle, no particular cause to terminate an employment relationship is required.
  • Swiss Code of Obligations (CO), Articles 319 to 362, SR 220[Bundesgesetz betreffend die Ergänzung des Schweizerischen Zivilgesetzbuches (Fünfter Teil: Obligationenrecht),SR 220]
  • Swiss Federal Act on Employment in Trade and Industry, SR 822.11[Bundesgesetz über die Arbeit in Industrie, Gewerbe und Handel, SR 822.11]
  • Swiss Federal Act on Old-Age and Survivors’ Insurance, SR 831.10[Bundesgesetz über die Alters- und Hinterlassenenversicherung, SR 831.10]
  • Swiss Federal Act on Disability Insurance, SR 831.20[Bundesgesetz über die Invalidenversicherung, SR 831.20]
  • Swiss Federal Act on Occupational Pension Plans, SR 831.40[Bundesgesetz über die berufliche Alters-, Hinterlassenen- und Invalidenvorsorge, SR 831.40]
  • Swiss Federal Act on Accident Insurance, SR 832.20[Bundesgesetz über die Unfallversicherung, SR 832.20]
  • Swiss Federal Act on the Compulsory Unemployment Insurance and the Insolvency Compensation, SR 0[Bundesgesetz über die obligatorische Arbeitslosenversicherung und die Insolvenzentschädigung, SR 837.0]
  • Swiss Federal Act on Health Insurance, SR 832.10[Bundesgesetz über die Krankenversicherung, SR 832.10]
  • Swiss Federal Act on Gender Equality, SR 151.1[Bundesgesetz über die Gleichstellung von Frau und Mann, SR 151.1]
  • Swiss Federal Act on Employee Information and Participation in Operations, SR 14[Bundesgesetz über die Information und Mitsprache der Arbeitnehmerinnen und Arbeitnehmer in den Betrieben, SR 822.14]
  • Swiss Federal Act on Protection from Passive Smoking, SR 818.31[Bundesgesetz zum Schutz vor Passivrauchen, SR 818.31]
  • Swiss Federal Act on Employment Exchange and Personnel Leasing, SR 11[Bundesgesetz über die Arbeitsvermittlung und den Personalverleih, SR 823.11]
  • Swiss Federal Act on Employees Sent to Switzerland, SR 823.20[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, SR 1[Bundesgesetz über den Erwerbsersatz für Dienstleistende und bei Mutterschaft, SR 834.1]

New Developments

Paid Paternity Leave (new legislation as per 1 January 2021)

On 27 September 2020, the Swiss people clearly approved the proposal for a paid two-week paternity leave with 60.3% of votes in favour. Fathers must take the new two-week paid paternity leave within six months after the child’s birth. They can either take such leave days consecutively or as individual days.

Employers must apply to the relevant social security authorities for loss of income compensation, as it is not paid out automatically. The amount of compensation is the same as under the maternity insurance: 80% of the average earned income before the birth of the child, up to a maximum of CHF 196 per day.

Paid Care Leave (new legislation as per 1 January 2021)

In addition to paternity leave, the new so-called care leave legislation introduces an obligation on the employer to continue to pay the salary for the care of a family member or partner with a health impairment, during a short-term absence of a maximum of three days per specific impairment, up to a maximum of ten days per year (329h CO).

Care Leave for the Care of Seriously Ill Children (new legislation as per 1 July 2021)

Newly introduced is a childcare leave if an employee’s child is seriously impaired in health due to illness or accident. The leave is limited to a maximum of 14 weeks (329i CO). Salary continuation is governed by the Swiss Federal Act on Income Compensation for Service Providers and for Maternity, which amounts to 80% of the salary and is capped at CHF 196 per day.

Newly introduced Minimum Wages in Canton Geneva and Ticino

CHF 23 per hour worked or CHF 4182 per month for a 42-hour week: this minimum wage is now due to all workers in the canton of Geneva. 58.2% of the electorate in the canton of Geneva voted for the minimum wage initiative submitted by the unions in 2018.

In Ticino as well, the population has agreed to a cantonal minimum wage of CHF 19 per hour from 1 January 2021, with annual increases in stages.

Only two cantons had a statutory minimum wage until now: Neuchâtel and Jura. Neuchâtel was the first canton to introduce a minimum wage in the summer 2017. The trend will most likely continue, as another popular initiative for a minimum wage has been launched in the canton of Basel City.

Wage Equality Analysis

As of 1 July 2020, the Swiss Gender Equality Act has been revised. It now stipulates that employers with 100 or more employees are obliged to carry out a pay equality analysis within one year, to have it verified by an independent body by 30 June 2022 and to inform employees and shareholders of the results by 30 June 2023, at the latest. The aim is to enforce the constitutional right to equal pay for work of equal value.

Any questions

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