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Contracts: Vacation, Illness, Confidentiality

Switzerland has some of the most flexible hire and fire rules, which make it a very employer-friendly jurisdiction. However, if the employment rules are not respected, the employment courts, on the contrary, tend to be very employee-friendly. The following are helpful practical rules and tips.

Vacation

Employees are entitled to a minimum of 20 days of paid vacation per year after the age of 20, and 25 days before reaching the age of 20. These days are calculated in a pro rata manner if the employment agreement lasts for less than a year or if it is terminated before the end of the year. In case of a full-time employment contract, these 20 days do not include public holidays.

In case of termination, vacation days still due to the employee are calculated in a proportional manner and must be taken by the employee, at the request of the employer, before the end of the employment contract. If the employer prefers, he/she can decide to pay the balance days of vacation to the employee with the equivalent in salary. However the payment of a salary instead of vacation is forbidden until and unless the employment agreement has been terminated.

The employer is released from the obligation of paying the salary or can request the reimbursement of the salary, if during the “period of vacation” the employee begins working and getting paid by a new employer without taking into account the legitimate interests of his/her former employer.

Illness

An employee is obliged to inform the employer orally of his/her illness as of the first day. The contract should state that a medical certificate must be provided if the illness exceeds three days.

It is a classic strategy for employees to produce a medical certificate for the date the notice of termination is provided (to prolong the notice period and negotiate the terms of the termination with the employer). For this reason, it is recommended for the employer to have insurance covering the employee’s salary during illness (the “assurance perte de gain”). According to the terms of the policy agreed with the insurance company, this covers the salary of the employee during any illness exceeding a certain “waiting” period (e.g. 30 days). The advantage of this insurance is also that the insurance appointed doctor checks the veracity of the “illness” before deciding whether or not to pay the salary.

Confidentiality and Non-compete Clause

According to articles 340 and 340a of the Swiss Code of Obligations (CO), the non-compete clause is admissible only if the employee has access to clients and work secrets, and if the use of such information can cause a prejudice to the employer. The non-compete needs to be sufficiently limited:

  • To the specific business activity of the employer (in which the employee was active during employment);
  • To the geographic location in which the employee was active for the employer;
  • To a time limit (not exceeding three years) fixed in proportion to the duration of the employment.

The non-compete clause should not “excessively restrict the economic future of the employee”.  Swiss courts rarely admit the validity of a non-compete clause for employees active in independent professional services (lawyers, doctors, accountants).

It is recommended to:

  • Provide for a dissuasive penalty clause applicable in case of a violation of the non-compete;
  • To reserve the possibility to claim damages for the amount exceeding the penalty; and
  • To reserve the right to file an urgent application before the court to order the employee to stop any activity in violation of the non-compete which is causing or could cause an important prejudice to the employer.

The employment agreement needs to specifically mention all the items provided by the employer to the employee (e.g. mobile phone, tablet, key to the office etc.) for the purpose of the employment and which need to be returned to the employer at his/her first request. The agreement should also specify the return of the hard and soft copies of all confidential documents.

Data Protection

The rules on data protection are very strict in Switzerland. Employers should always seek the permission from employee candidates to contact their previous employers before contacting them (even if their names are mentioned on the curriculum vitae of the employee).


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