Employment contract in Switzerland – How it works ?

When talking about work in Switzerland, the employment contract is a central element that deserves our attention. Think of it as a bridge between your future employer and you, clearly establishing what each can expect from the other.

This document is not just a formality; it is the heart of employment relations, defining the rules of the game for both parties.

Whether you’re about to land your first job or you’re an employer keen on complying with the laws, Karpeo’s team of chartered accountants will help you understand the basics of the Swiss employment contract.

Understanding the employment contract in Switzerland

An employment contract is a bit like a recipe that describes how to prepare a dish. It details who does what, under what conditions, and what each party brings to the other.

Definition and characteristics

The employment contract establishes a legal link between the employer and the employee, binding each party to respect specific obligations.

This contract involves rights and duties precisely defined from Article 319 in the Code of Obligations. Simply put, it’s an agreement where the employee commits to performing work in exchange for remuneration from the employer.

For the employee, this includes the obligation to carry out the agreed work, while for the employer, it includes paying the monthtly salary, paying social insurance contributions, and granting paid leave.

Types of employment contracts

In Switzerland, there are several types of employment contracts, each adapted to different needs.

Fixed-term contract (CDD)

These types of agreements have a fixed predetermined duration. At the end of this period, the employer can choose to extend the contract, convert it into a permanent contract, or not offer a renewal.

Permanent contract or open-ended contract (CDI)

In this case, the work duration is undetermined by mutual agreement between the employer and the employee.

Both parties have the right to terminate the contract under specific conditions, with the employer and employee generally required to observe a notice period before the employment relationship ends.

Standard employment contract (CTT)

Standard employment contracts mainly apply to professions requiring regulation of employment relations. Their function is similar to that of an ordinary employment contract.

The clauses of a standard employment contract are not subject to negotiation, as they are predefined by collective labor agreements (CCT) to guarantee workers a minimum wage and social benefits.

Essential elements of a Swiss employment contract

Swiss legislation strictly frames the drafting of employment contracts to ensure the protection of employees and clarify the obligations of employers.

Here are the essential elements that must be included in a Swiss employment contract.

Mandatory information of an employment contract

The function or role

Every employment contract must clearly identify the concerned parties, i.e., the employer and the employee, with their personal information but it must also specify the role or function of the employee within the company, with a description of their main tasks and responsibilities.

Remuneration

The salary amount must be clearly stipulated, including the amount, the frequency of payment, i.e., whether it is daily or monthly payment, and any other form of remuneration (bonuses, commissions, etc.).

This ensures total transparency regarding the employee’s compensation.

Work schedules

The working hours, including the weekly distribution and overtime, must be defined. This also includes the terms concerning evening work, weekends, and public holidays.

Work conditions

Duration of work according to the contract

In Switzerland, legislation stipulates a maximum working hours range from 45 to 50 hours per week.

However, some collective labor agreements mean the weekly average is around 42 hours. The contract must specify the weekly duration of work, conforming to Swiss legislation.

The right to vacation

The right to annual vacation must be mentioned. Swiss law guarantees a minimum of four weeks of paid vacation per year for workers over 20 years old. Some companies may offer more, so it’s important to thoroughly analyze this point.

Public holidays

Public holidays vary according to the cantons in Switzerland. Those recognized by the canton where the employee works must be specified in the contract, indicating how they are paid and treated.

Probation period

Most employment contracts provide for a probation period, during which the employer and the employee can terminate the contract at short notice.

The duration of this probation period must be clearly indicated, generally not exceeding three months. In the absence of a written agreement to the contrary, the probation period is set at one month.

Modification and termination of the employment contract

In the Swiss professional framework, employment contracts are not set in stone. They can be modified and, of course, end, under very specific conditions.

Any major change in your employment contract, such as salary, schedule, functions, or duration of work, requires your prior consent.

Conditions for modifying the contract

Modifications to an employment contract must be agreed upon by both parties.

This can concern salary, work schedules, or tasks to be performed. To be valid, these modifications must be made in writing.

In general, an employer cannot unilaterally change a contract without the employee’s agreement, unless specific clauses of the initial contract allow it.

Termination of the contract and employment relations

It is important to note that the termination of an employment contract is subject to strict rules designed to protect the rights of employees while allowing employers to manage their staff effectively.

The end of an employment contract can occur in several ways:

Ordinary termination of the employment contract

Most of the time, either the employer or the employee can end the contract by respecting a notice period, which varies according to the employee’s seniority and the terms of the contract.

This period allows each to prepare for the transition. Notice periods are generally one month during the probation period, then range from one to three months once the probation period has passed. Specific details should be checked in the employment contract, as they can vary.

Immediate termination for just cause

In some serious cases, the contract can be terminated immediately, without notice.

This includes, for example, serious violation of contractual obligations by one of the parties. The reasons justifying such termination are strictly defined by law and jurisprudence.

In case of disagreement on the termination, the parties can resort to mediation or the labor court to resolve the dispute.

Specific aspects of the employment contract

The Swiss labor market is distinguished by certain specificities that influence the drafting and application of employment contracts.

These particularities can concern different types of contracts as well as dispute management.

Special contracts

Employment contract for foreign workers

Switzerland welcomes a large number of foreign workers and cross-border commuters, requiring specific work permits.

The employment contract must comply with Swiss employment conditions while taking into account the legal status of the foreign worker.

Apprenticeships and internships

Apprenticeship and internship contracts are common in Switzerland, offering young professionals and students valuable experience.

These contracts are regulated to ensure both adequate learning experience and protection of interns and apprentices from any form of abuse.

Conclusion

Understanding your employment contract in Switzerland is essential to ensure a serene and fair professional relationship. This document frames the rights and obligations of each party, both the employer and the employee.

In case of doubt or judicious questioning, it is wise to seek the advice of a professional or an expert who can help you navigate the subtleties of your contract, while ensuring that your interests are well protected. Contact our certified accountants for more information.