International Employment Law Guide

Analysis

Switzerland

International Employment Law Guide

This page outlines country-level details about the onboarding process when hiring employees, and touches upon the applicable rules when terminating employment contracts.

Last updated: 1 April 2021

A. Hiring of employees (onboarding)

Mandatory employer requirements

Employment law in Switzerland is relatively liberal and allows for a wide range of flexible arrangements of employment relationship. An individual employment contract can in general be agreed upon in writing, orally, or even implicitly. There are a few exceptions, such as apprenticeship contracts, which must be in writing. Furthermore, Swiss law does not stipulate time limits with regard to the conclusion of an employment contract.

If the employment contract includes neither express nor implied terms, the relevant statutory provisions apply. Swiss law addresses most issues that are relevant to an employment relationship. Many provisions are mandatory—that is, they cannot be contractually changed or can only be changed in the employee’s favor. Furthermore, numerous public law provisions aim to protect certain categories of employees, such as females, youths, or people working at night.

Collective agreements apply to certain sectors, for example, the machine industry or the chemical and pharmaceutical industry. In addition, the Federal Government can enact mandatory standard employment terms for certain industries or certain types of workers.

Thus, when employing an individual in Switzerland, the employer, either a Swiss company or a foreign company with no presence in Switzerland, needs to comply with the above-mentioned regulations depending on the industry in which it operates and some other obligations. This includes the registration of the employee with the necessary social security schemes (e.g., old age/invalidity, accident insurance, unemployment fund, pension plan, etc.). In addition, certain applications/registrations may need to be filed if the employee is not a Swiss national, notably regarding immigration and/or income tax purpose.

Probation periods

The probation period is, in principle, reserved for open-ended employment contracts, so that in principle, no probation period applies in case of a fixed-term contract. However, the parties may mutually agree in writing to include one in the fixed-term employment contract.

For open-ended employment contracts, if not stated otherwise, the first month of employment is considered as the probation period. It can be excluded or extended by written agreement to a maximum of three months. During the probation period, either party may terminate the employment agreement at any time with seven days’ notice. No further mandatory actions are needed upon expiry of the probation period.

Hiring checks

During the hiring process, an employer may perform only checks related to the assessment of the suitability of the candidate for the respective role. This includes in particular personal details, education, professional background, including reference letters. Further background checks (e.g., oral/written references by previous employers, hiring tests) generally require the explicit consent of the candidate.

Medical examination
There is no legal requirement to conduct medical checks upon hiring. Medical examinations are only permissible if it is relevant to the proposed role/function and are subject to proportionality requirements. The medical examiner is still bound by the duty of secrecy and must only disclose his/her assessment of the candidate's suitability for the role.

In addition, questions relating to health conditions can be asked during a job interview only if such data is necessary for the assessment of the candidate’s eligibility for the role.

Criminal background check
Criminal background checks are only permissible if they are relevant for the proposed work and are subject to proportionality requirements.

Reference and education checks
Reference and education checks are common and permissible with the consent of the individual.

Diversity & inclusion

Swiss law does not require that specific diversity measures with focus on gender, race or disability be established in the workplace, except for the public sector. However, the employment law and related case laws provide for anti-discrimination in the workplace regarding race, gender, religion, age, nationality and health. Nevertheless, these provisions do not oblige for any positive action.

As regards the Swiss gender equality act, new provisions on equal pay took effect on 1 July 2020. Since this date:

  • Companies with 100 or more employees are required to perform an equal pay analysis by the end of June 2021.
  • The analysis must be audited by an independent approved third party by the end of June 2022.
  • The equal pay analysis must be performed every 4 years, unless a company is found to have an equal pay system in place.
  • The results of the analysis must be shared with employees and if the company is listed, additionally with its shareholders.

Types of employment contracts

There are two main types of employment contracts: fixed-term (the contract ends on the date set at the outset) and open-ended (the contract ends by notice of termination) employment contracts although there are variants of these main types. Depending on the scope and nature of the employment, there are other types of contracts, e.g., on-call duty employees, agency workers.

There is no limit to the duration of a fixed-term employment contract. However, if the same parties enter into successive employment contracts without an objective reason to do so, a court may consider this as unlawful and rule that the employment should be considered open-ended. As a consequence, the length of the previous employments will be counted towards the years of service.

The maximum duration employment contract is a contract that has the particularity of combining the characteristics of the fixed-term and the open-ended employment contracts. It is a hybrid contract, which can be terminated ordinarily during its entire duration, but in any case ends automatically at the term agreed by the parties. During the term of the contract, the rules of the open-ended employment agreement apply.

The minimum duration employment contract is also a hybrid contract. It can only be terminated after the minimum duration agreed between the parties has expired.

The employment contracts are not subject to any formal requirements and may – with the exception of apprenticeship contracts – also be the result of a verbal agreement.

However, for open-ended employment relationships or with fixed-term contracts of more than one month, the employer must provide the following information in written form to the employee no later than one month after the starting date:

  • Names of the contracting parties;
  • Starting date;
  • The employee’s function;
  • Salary (including bonuses, allowances, and other remuneration); and
  • Working time per week.

For the sake of legal clarity and proof, it is recommended to draw up a contract in writing. In addition to the above elements, the following should be included as far as applicable:

  • Term of the employment relationship;
  • Rules on probation and notice periods that deviate from the law;
  • Holiday entitlement;
  • Rules on continued payment of salaries when ill or pregnant; and
  • Other specific agreements made during the contractual negotiation (e.g., non-competition undertakings).

Specific rules for executives

No specific rules apply.

Language requirements

There are no regulations regarding the required language of employment documentation. However, employees need to be able to understand the employment terms and conditions. Otherwise, these terms and conditions may not be enforceable.

Back to top

B. Termination of employees (Offboarding)

Kinds of dismissal

According to Swiss law, there are two types of dismissal:

  • Ordinary dismissal; and
  • Summary dismissal (termination for good cause)

Ordinary dismissal

An ordinary dismissal is a dismissal by either party with observation of the applicable notice period. It is generally not possible in case of fixed-term employment contracts. The latter expire after the set duration without need for notice.

The applicable notice period is agreed either in the contract or in absence of such agreement set by law. The statutory notice period is defined by the length of service.

Summary dismissal

A summary dismissal is a dismissal without observation of the notice period and with immediate effect. It requires that the terminated party has given the terminating party good cause. Good cause is given if based on the specific circumstances that it cannot be reasonably expected by the terminating party to continue the employment relationship until the expiry of the applicable notice period. According to the vast court's practice, e.g., severe criminal actions against the employer may be considered a good cause. In this case, the employment relations must be terminated without delay within a short amount of time, usually two or three days.

Depending on the specific case, a summary dismissal may also be legally possible in case of a fixed-term contract.

Please note that "payment in lieu of notice" is not known in Switzerland. An employment relationship can only be terminated upon expiry of the notice period or at an earlier time with the consent of the employee through a termination agreement.

Dismissal motivation

An ordinary dismissal is valid, if the applicable notice period is observed. In this case, no special reason is necessary.

However, the party terminating the contract must, upon request of the other party, state in writing the reasons for the termination. The reasons given to the terminated party should be true and complete and only refer to facts known at the time of the termination.

A termination is regarded by law as wrongful if it is given:

  • Because of an attribute pertaining to the person of the other party, unless such attribute relates to the employment relationship or substantially impairs cooperation within the business;
  • Because the other party exercises a constitutional right, unless the exercise of such right breaches an obligation arising from the employment relationship or substantially impairs cooperation within the business;
  • Solely in order to prevent claims under the employment relationship from accruing to the other party;
  • Because the other party asserts claims under the employment relationship in good faith; and
  • Because the other party is performing Swiss compulsory military or civil defense service or Swiss alternative civilian service or a non-voluntary legal obligation.

In such cases, the termination remains effective. However, a court may order the terminating party to pay an indemnification of up to six months’ salary.

A summary dismissal can be given if there is a justified reason and, thus, needs to be well motivated (cf. point Kinds of dismissal above).

Notice period

In case of ordinary dismissal, the following notice periods must be respected:

Seniority Notice given by employer
Probation period 7 days
1st year, after probation period 1 month
2nd to 9th year of service 2 months
As of 10th year of service 3 months

These periods may be altered by written agreement, standard employment contract or collective bargaining agreement. They can, however, only be reduced to less than one month by collective bargaining agreement and for the first year of seniority. Furthermore, the notice periods must be of the same length for employer and employee.

The dismissal for good cause does not require the terminating party to observe any notice period (cf. point Kinds of dismissal above).

Severance pay

In case of an ordinary dismissal, no severance pay (indemnité de licenciement) has to be paid, except if agreed otherwise by the parties. The employee is only entitled to receive his/her ordinary compensation in accordance with the existing agreements during the notice period.

However, if the dismissal is considered as wrongful by a court, an indemnity shall be due (cf. point Dismissal motivation above).

In case of a summary dismissal, severance pay is due only if the dismissal is not justified. In the absence of - good cause, the employee is entitled to damages in the amount of what he/she would have earned had the employment relationship been ordinarily terminated or expired after the agreed duration. Additionally, a court may order the employer to pay a compensation to the employee. Such compensation is determined in the court's discretion taking into account all circumstances. It may, however, not exceed the equivalent of six months’ salary of the employee.

Dismissal formalities

A termination does not require a specific form unless agreed otherwise. However, the party giving notice shall, upon the request of the other party, state the reasons for giving of notice in writing. For the sake of proof and legal clarity, it is recommended to give the dismissal in writing.

Special dismissal protection

According to Swiss labor law, upon expiration of the probation period (if any), the employer shall not terminate the relationship:

  • During the other party’s performance of compulsory Swiss military or protection service, or civil service, in case such a service lasts more than 11 days, during the four weeks prior to and after the service;
  • During the period that the employee is prevented from performing his/her work fully or partially by no fault of his own due to illness or accident for 30 days in the first year of service, for 90 days as of the second year of service until and with the fifth year of service, and for 180 days as of the sixth year of service;
  • During pregnancy and during the 16 weeks following giving birth of an employee; and
  • During the employee’s participation with the agreement of the employer at a foreign aid service assignment abroad ordered by the competent federal authority.

Notice given during one of the above-mentioned forbidden periods is null and void. If the notice is given prior to the beginning of such period and if the notice period has not expired prior to such a period, the expiration is suspended and shall continue only after termination of the forbidden period.

Legal means of employees

If the employee regards his/her dismissal as wrongful as explained under paragraph Dismissal motivation above, he/she has to submit a written objection to the employer no later than the end of the notice period. If the objection is properly submitted and if the parties cannot agree on the continuation of the employment relationship, the employee may assert his/her claim for indemnity within 180 days of the end of the employment relationship.

Specific rules for executives

No specific dismissal rules apply for executives.

Collective dismissals

Particular requirements and procedures exist in case of collective dismissals. According to Swiss law, collective dismissals are deemed to be notices given by the employer within 30 days for reasons unrelated to the person of the employee and which affect:

  • At least 10 employees in enterprises usually employing more than 20 and less than 100 persons;
  • At least 10% of all employees in enterprises usually employing more than 100 and less than 300 persons; or
  • At least 30 employees in enterprises usually employing at least 300 persons.

If an employer intends to carry out a collective dismissal it must inform the employees' representatives (or in their absence, the employees) about the intended measures and reasons for those measures. Additionally, there may be the need to consult. Employees must have the opportunity to provide their proposals on how the dismissals can be fully or partially avoided or how their negative consequences can be mitigated. A copy of the information to the employees needs to be sent to the competent employment office at the time of the information to the employee representatives. After completion of the consultation process, the employer must notify the competent employment office of the intended dismissals. The employment office will then seek solutions to the problems arising by the planned dismissals.

Even if the threshold for a mass dismissal is not met, employers are required to notify the cantonal authorities of any dismissals affecting more than 10 employees or of any plant closures. Depending on the respective cantonal law, such notifications may be required if more than 6 employees are affected by dismissals.

Since 1 January 2014, the Swiss legislator has introduced the duty for companies to negotiate a social plan if they employ at least 250 employees and if they intend to make at least 30 employees redundant within 30 days for reasons that have no connection with their persons. If, at the end of the negotiations, the parties have not agreed on a social plan, an arbitral tribunal must be appointed. This tribunal will then issue a social plan in a binding arbitral award.

An applicable collective bargaining agreement may foresee for different rules on collective dismissal and a social plan.

Back to top

Get in touch

Christine Bassanello
Switzerland
cbassanello@deloitte.ch | +41 58 279 7234

View survey results from other countries

Click on country name to view country-specific data.

to activtae fullwidth component . Do not delete! This box/component contains JavaScript that is needed on this page. This message will not be visible when page is activated.