A bonus is a voluntary special payment that a company pays to an employee as a kind of reward. It is often paid on certain occasions or when certain targets are achieved. However, it is at the discretion of the company whether a bonus is paid and how high it is. Find out all the details and legal basis for bonuses in Switzerland below.
What exactly is a bonus?
A bonus in accordance with Article 322d of the Swiss Code of Obligations (CO) is a special payment which - in addition to the salary - is often paid on certain occasions such as Christmas or at the end of the financial year. Another reason for the payment of a bonus is when a certain length of service or a certain number of years of service or an agreed performance target or a company target is achieved. The purpose of a bonus is usually to reward employees for past performance or to incentivise future performance. As there is generally no obligation to pay a bonus, it is at the discretion of the company whether it is granted. The amount of the bonus can also be determined by the company.
What is the difference between a bonus and the 13th monthly salary?
While a bonus is a voluntary special payment by a company, the 13th month's salary - if its payment is contractually agreed - is a fixed component of the salary and is therefore paid unconditionally. The bonus is paid independently of the salary and can therefore also be linked to conditions.
What is the difference between a bonus and a variable salary?
This question is similar to the difference between a bonus and a 13th month's salary. The company is obliged to pay the employee the agreed salary unconditionally. This also applies to a variable salary. This means that it cannot be linked to conditions - such as the employee's work performance or the company's success - and must be paid on a pro rata basis even if the employee leaves the company prematurely.
The bonus, on the other hand, can be subject to payment conditions and the company can contractually regulate the conditions for receiving the bonus. For example, it is often stipulated that the employee will only receive the bonus if he or she is in an employment relationship that has not been terminated at the time it falls due.
What types of bonus are there?
Depending on the specific characteristics, a distinction is made between different types of gratuity, which are discussed in more detail below.
Voluntary gratuity
In the case of voluntary bonuses, a further distinction is made between genuine and non-genuine bonuses. A genuine bonus is a special payment to which there is no legal entitlement. A non-genuine bonus, on the other hand, is when there is a legal entitlement to receive it.
Agreed bonus
An agreed bonus can be a one-off special bonus that is paid as soon as a certain event occurs. This is often paid to the employee as a token of appreciation or as spontaneous recognition.
On the other hand, the agreed bonus can also be a regular payment that is linked to certain conditions. Examples of such conditions include the employee's performance or the company's success. In this case, the term "bonus" is often used colloquially. As the conditions for this type of bonus - if a company decides to pay it - are agreed, the company is obliged under Article 322d, paragraph 1 CO to pay the bonus when the conditions are met.
When is an employee entitled to a bonus?
As mentioned, the bonus is a voluntary special benefit. According to Article 322d, paragraph 1 CO, there is only an entitlement to it if this has been contractually agreed. If this is the case, it must also be paid on a pro rata basis in the event of premature termination of the employment relationship in accordance with Article 322d, paragraph 2 CO.
However, it should also be mentioned in this context that in some cases a contractual amendment can also come about tacitly. If, for example, the bonus is not part of the employment contract but is paid regularly and unconditionally over several years, it may be the case that the company has made a tacit contractual amendment in favour of the employee. In this case, it would still be obliged to pay the bonus.
However, as long as the bonus is clearly labelled as a voluntary special payment, employees have no legal claim to it. For this reason, the voluntary nature of the payment is often clearly stated in the contract and on the pay slip.
What conditions can be attached to a bonus?
In general, it is at the discretion of the company to link the bonus to certain conditions. In this case, it is referred to as a conditional or agreed bonus. However, the conditions must be clearly justified and must not be arbitrary or discriminatory. They must therefore be structured in such a way that an individual is not placed in a worse position than the other employees.
For example, it is often agreed that a bonus will only be paid if the employee is in an employment relationship that has not been terminated at the time it falls due. In this case, the bonus would not be paid if the employee is still with the company but has already been dismissed and is only working there for the duration of the notice period. Other common conditions include loyalty to the company, the company's success or the employee's work performance. The latter is often determined by a target agreement. This is a personnel management tool that is used to define personal performance targets for individual employees.
How high is a bonus?
If a specific amount is contractually agreed for the bonus, the company is obliged to pay the specified amount. If, on the other hand, it is a genuine bonus, i.e. it has not been agreed contractually or in any other way, it is at the employer's discretion whether and to what amount it is paid.
However, it should be noted that the principle of equal treatment also applies to bonuses. This means that a reduction or complete cancellation of a bonus for certain female employees must be objectively justified. Examples of such reasons would be long-term incapacity to work (illness), poor work performance or a breach of the duty of loyalty. However, this does not mean that different employees cannot receive different bonuses. Since freedom of contract prevails in Switzerland in accordance with Article 19 CO, individual employment contracts can be structured differently - within the legal framework, of course. Different conditions and amounts can therefore also be agreed for the bonus of individual employees.
Special case: At the request of the employee, the amount of the bonus can also be determined by a court in special cases. This may be the case, for example, if the bonus is contractually regulated but the company refuses to pay it or if the amount has been arbitrarily determined by the company. A labour law lawyer can advise you in detail in a consultation and, if you wish, support you in the further process.
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FAQ: Bonus
A bonus is a special payment which - in addition to the salary - is often paid on certain occasions such as Christmas or at the end of the financial year. In contrast to the variable salary and the 13th monthly salary, it is not considered part of the salary. The purpose of a bonus is usually to reward employees for past performance or to incentivise future performance.
No, there is no general legal entitlement to a bonus in Switzerland. It is at the discretion of the company whether and to what extent this is paid. However, it can be agreed in the employment contract. If this is the case, employees are entitled to the bonus provided that all contractually agreed conditions are met.
An agreed or conditional bonus can be either a one-off special bonus on the occurrence of a certain event or a regular payment linked to certain conditions. As the respective conditions are contractually stipulated in this case, the company is obliged to pay the bonus.
In principle, the bonus can be linked to a variety of conditions, as this is at the discretion of the company or can be freely agreed contractually. However, the conditions must not be arbitrary or discriminatory. Common examples of conditions include an employment relationship that has not been terminated, loyalty to the company, the success of the company or the respective work performance. In addition, a bonus is often paid on certain occasions such as Christmas or at the end of the financial year.
As the bonus is generally a voluntary special benefit, there is only an entitlement if it has been contractually agreed. In a special case, however, an entitlement to the bonus may arise if a tacit contractual amendment has been made in favour of the employee by paying it regularly and unconditionally over several years.
The amount of the bonus is generally at the discretion of the company. However, the amount must be justified and must not contradict the principle of equal treatment. The reduction or complete cancellation of a bonus for certain female employees must therefore be objectively justified. In special cases, the amount of the bonus can also be determined by a court.