Practical Tips for Employers and Employees in Switzerland
Employers in Switzerland: Employment Contracts
A distinction needs to be made between hiring office employees and domestic employees.
Although there is no minimum salary for office employees, there are strict conditions and a minimum salary requirement for domestic employees.
When hiring office employees, employers should keep trace of everything that has been agreed during the pre-contractual discussions in writing. Therefore, it is strongly recommended to have a written contract with employees (even though it is not compulsory under Swiss law).
The employment contract should include:
- the term (fixed or permanent) of the contract
- a precise job description
- the amount of the gross salary and on which day it will be paid each month
- whether it is payable twelve or thirteen times a year
- the conditions for the bonus (if any)
- the duration of a trial period if applicable (maximum three months)
- the number of annual vacation days of the employee
- a confidentiality and non-compete clause (if applicable)
- the list of items to be returned by the employee to the employer in case of termination
Gross Salary and Bonus
Employers in Switzerland are personally liable (on a civil and penal basis) for the payment of the social security of their employees, their tax at source (unless they are Swiss or C-permit holders) and their professional accident insurance. The premium for the non-professional accident insurance can be split (at the discretion of the employer) in equal parts between the employer and the employee.
If a bonus is mentioned in the employment agreement, it is important for the employer to clearly indicate whether it is granted automatically each year or whether it is discretionary. The classic dispute before the employment courts is due to ambiguous clauses concerning the bonus.
Duration and Termination of Employment Contracts
If the employment agreement is concluded for a fixed term, it is not possible for either party to terminate the contract before the end of the term unless it is for justified reasons (“justes motifs”).
If the employment agreement is for an unlimited term, then the legal notice period for ordinary termination applies to both parties. However, either party can of course also terminate the contract with immediate effect for “justes motifs”.
If the employment agreement is terminated with immediate effect, there is a high probability that the employee will take the employer to court to contest the termination, since this type of termination prevents the employee from receiving unemployment benefits.
In case of a dispute before the employment court, it will always be the word of the employer against that of the employee. It is therefore essential to keep a written trace of all warnings given to employees. Two to three written warnings are in principle considered necessary by case law before the notification of a termination with immediate effect.
The employer does not need to provide the employee with a reason for terminating his/her employment contract with the regular notice period. However, if the employee requests the employer to provide the reasons for the termination, the latter is obliged to do so.
It is important to note that a letter of termination for ordinary termination needs to be provided and received by an employee before the last day of any month in order for the notice period to begin at the 1st of the following month. For example, if the employer provides the employee with a letter of termination on the 5th of April, and the applicable notice period is one month, the notice period will only start running on the 1st of May and the contract will be terminated on the 31st of May.
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