Swiss labor law: What should you pay attention to?

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To support the growth of your business, you need to hire employees. Setting up the employment contract, legal duration, salary management, collective agreements: there are many points concerning labor law that you will have to pay particular attention to. And since in the event of an extreme violation of labor law (especially when employees' lives or health are threatened), the closure of the company may be at stake, rigor and attention must be the rule. To help you find your way, our guide will help you.

Setting up an employment contract

The employment contract is characterized by an agreement between two parties: the employer and the employee. This document stipulates in detail the arrangements to be put in place to ensure that the work is perfectly supervised.

By entering into an employment contract, the employer undertakes to provide the employee with a salary, to pay social insurance contributions, or to grant paid leave, while the employee commits to perform the tasks associated with his or her position.

There are two types of employment contracts that can be signed to hire an employee: a fixed-term contract and an open-ended contract. The elements that are not mentioned in the work contract are therefore mentioned in the Code of Obligations.

The big difference between these two types of contracts lies in the way in which the contract ends.

The employment contract that you draw up must specify fundamental criteria:

  • The name, address of both parties

  • The position occupied by the employee: function, tasks, work organization, and working time arrangements can be specified here. If additional or specific tasks are assigned to the employee, the job description must be completed here. The employer will not be able to unilaterally make changes to the employee's function.

  • Working hours: here you will specify the schedule and the volume of work to be performed by the employee.

  • The date of entry into service: the start of work will then be specified here. In the case of fixed-term contracts, the end date of the work will also have to be stipulated.

  • The trial period: if nothing is specified in the contract, the legal trial period is one month. However, the employer may decide to reduce, waive or increase this period up to three months.

  • Hierarchical relationships: the employment contract defines the departments the employee works in to carry out his tasks, and the hierarchical relationships he will have to conform to.

  • Termination of the contract: the notice periods depend on the years of service performed on the position. For example, after one year's work, the notice period is 1 month. After two to nine years of work, they are 2 months, and from the tenth year, they are 3 months. However, the employment contract may specify 30, 60, or 90-day net periods, which are useful in case of suspension of the notice period for example.

  • Salary: missions are carried out in exchange for a salary. You undertake, through the employment contract, to pay for the work provided at a rate agreed in advance with the employee. The employment contract may specify an hourly, daily, or monthly rate. It can also be a target, task, or even piecework rate. Please note: a service provided free of charge is not covered by the employment contract.

Working hours

This is a fundamental point of labor law. You are obliged to keep a record of the hours worked by your employees. In this sense, you must communicate:

  • The daily and weekly working hours

  • Days off

  • Compensatory Work Accomplished

  • Overtime worked

You must keep this information regarding each of your employees' schedules for a 5-year period. In case of control, if this rule has not been fulfilled, you may be liable to sanctions, ranging from a warning to a fine.

It is essential to note that, regardless of the working hours worked within the company, employees have the same rights and obligations.

Part-time work

When you hired staff, you can set up a part-time employment contract. It covers regular work, but at a rate of activity lower than full-time.

Part-time work is defined by hours, half days, or days. This working time must be specified in the employment contract and corresponds to a fraction of the normal working hours in the company.

Auxiliary or occasional work

With this type of work, the employer occasionally resorts to a worker. Often, casual work is put in place to cope successfully with a temporary work overload or absence of one of the company's employees.

For each occasional work assignment set up, you will have to draw up a new fixed-term contract, full-time or part-time, which will specify all the employee's working arrangements: position, task, duration, hierarchical superior, salary... With auxiliary work, you offer no guarantee of renewal at the end of the period specified in the contract.

Be careful, however: chain contracts are forbidden. In this sense, it will be impossible for you to set up a succession of fixed-term contracts without interruption.

On-call work

With on-call work, the worker is available whenever the employer needs him/her to carry out a task. Also known as work on-demand, on-call work must comply precisely with the applicable labor law: in this sense, the termination of the contract, holidays, or salary in the event of incapacity to work must of course be applied.

Here, it will be an open-ended contract (with a no termination date). Each period of work carried out is a continuation of the previous period. Part-time, on-call work does not entitle the employee to unemployment insurance benefits for the salary supplement. It is a type of work that implies total availability on the part of the employee. The time during which the employee is available in the company will be paid at the same rate as the actual work.

Temporary or agency work

With this working time, you may find yourself faced with two scenarios:

  1. The employee concludes a framework contract with an employment agency, which provides a framework agreement for each of his or her assignments. At the end of each assignment, the contract expires and the employee can choose to accept or refuse the new assignments offered to him or her.

  2. The worker is linked to the employer by an open-ended term contract (of indefinite duration), which hires out his services to third parties. Here, the permanent contract is maintained between each mission and it is up to the employer to assume the periods of inactivity.

In the context of intermediate or temporary work, the succession of several contracts in the service of the same employer raises the problem of the prohibition of "chain contracts".

However, here the case law takes account of the need for flexibility in this type of assignment.

Night work and Sunday work

In Switzerland night work and Sunday work are prohibited. However, some companies (such as security companies for example) have to use them to carry out their activities, and if this is your case, you will have to make a special request to the competent authorities: be careful, however, to set up this type of work, many legal conditions will have to be met here.

Labor law in payroll management

Payroll management is an essential point of labor law. In Switzerland, salaries are negotiated either individually or collectively. Labor law does not set a minimum wage. However, in many industries, working conditions concerning wages are set by mutual agreement within the framework of a collective labor agreement (CLA). These will govern wage levels and the associated payment obligations.

The payslips that you provide your employees with should be clear and contain several legal details:

  • The gross salary

  • The amounts of social deductions (made from Old Age and Survivors' Insurance, Disability Insurance, Loss of Earnings Insurance, CAF, pension fund, non-occupational accident insurance, and unemployment contributions)

  • The net salary

Work incapacity and sick leave

In the event of an accident, death of a relative, pregnancy, or illness, the employee may be required to take time off work.

In the event of an absence, the employee must inform his employer as soon as possible. If he is absent due to illness or accident, he must provide a medical certificate specifying the incapacity to work, and must resign on the third day of absence.

Collective labor agreements to guide you

To support you in complying with labor law, collective labor agreements are being implemented in many specific branches and companies. Collective bargaining is conducted by the social partners, which are trade unions and employers' associations.

They provide a precise framework for all labor regulations and relations between employers and employees. These documents concern all employees, whether on open-ended or fixed-term contracts.

Thanks to these agreements, the provisions on the content and termination of the individual employment contract of employees are specified. Collective labor agreements determine the rights and obligations of both parties (employers and employees) and warrant compliance with the measures laid down.

Thus, collective labor agreements (CLAs) define the provisions concerning:

  • the minimum wage

  • the 13th month

  • compensation

  • vocational training

  • working conditions

  • social guarantees

  • the holidays

  • legal working hours

  • protection against dismissal

  • payments in the event of sickness, maternity, or military service

CLAs are a reference for the employer, who will be able to find in these documents all the laws that enable him to scrupulously comply with labor law.

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