The employment contract in Switzerland: types, content and special features

An employment contract is a contract between an employer and an employee. It is concluded when a new employment relationship begins or the conditions of an ongoing employment relationship change. In Switzerland, there are various forms of employment contracts, including the individual employment contract (EAV), the collective employment contract (GAV) and the standard employment contract (NAV).

Even if the verbal form is permissible, most employment contracts are concluded in writing. The document is signed by both contracting parties. The legal regulations governing employment contracts are set out in the Tenth Title of the Swiss Code of Obligations (CO) from Article 319 CO onwards.

Employment contracts contain provisions on cooperation. Many employment contracts are customised and contain specific provisions that are relevant for employers and employees in the context of an employment relationship. An individual employment contract should contain the following information:

• Name of the employee and employer
• Start of the employment relationship (exact date)
• Function or position of the employee (sometimes also responsibilities)
• Wage and wage supplements
• regular weekly working hours (full-time or part-time)
• special regulations (e.g. overtime regulations, non-competition clause)
• End of the employment relationship for fixed-term contracts (exact date)

Employment contracts deal in more detail with the specific obligations of employers and employees. These arise when an employment relationship begins. The CO sets out both the obligations of the employee and the obligations of the employer that go hand in hand with every employment contract.

Obligations of the employee (Article 321 CO)

By signing an individual employment contract, an employee agrees to the following obligations, among others:

Duty to work: the activity agreed in the employment contract must be carried out by the person signing the contract.

Duty of care and loyalty as well as liability: Employees must carry out their work carefully and to the best of their knowledge and belief. If damage is caused to the employer intentionally or through negligence, the employee is liable as the party responsible. Business secrets may not be passed on - even after the employment relationship has ended. Furthermore, the employee may not carry out work for competitors or other activities that conflict with the employing company.

Overtime work: Employees are obliged to work overtime to a certain extent if this is possible for them. These additional hours are paid either with time off or with wages.

Furthermore, employees are obliged to follow instructions and orders within the company. They are also subject to a duty of accountability and disclosure to their employer.

Duties of the employer (Article 322 et seq. CO)

Just as employees must fulfil their duties, the employer also has certain duties and responsibilities. In legal terms, these include the following:

Wages: The employer is obliged to pay the agreed or customary wage. This should take place at the end of each month, unless otherwise stipulated in applicable collective labour agreements or standard employment contracts. Bonuses, such as Christmas bonuses, should also be paid if this has been agreed in advance. The law also provides for the continued payment of wages in the event of an accident, sickness and pregnancy. If the insurance company takes care of this, the employer is exempt. The law also lays down requirements for wage retention and wage protection as well as the payment of commissions and shares in business profits.

Protection of the employee's personality: Employers must protect the life, health and personal integrity of their employees with the appropriate measures. This also includes the prevention of sexual harassment. Furthermore, employees' personal data must be protected.

Time off, holidays and leave: Employees must be granted at least one day off per week. In addition, all employees are entitled to four weeks' holiday (five weeks for female employees under the age of 20). A reduction is only possible under certain conditions. The CO also regulates maternity leave and paternity leave as well as leave to care for relatives.

The CO also sets out regulations on employee benefits provided by the employer. Other topics such as the obligation to provide an employer's reference and the requirements for dismissal or termination of the employment relationship are also dealt with there.

The Swiss legal system distinguishes between different types of employment contracts that serve different purposes. Below you will find a list and a brief explanation of the most important types of employment contracts that apply in Switzerland.

Individual employment contract (Article 319 et seq. CO)

An individual employment contract is concluded between an employee and the employer. Details of the employment relationship entered into are agreed in this contract. The contract can relate to fixed-term or permanent employment relationships and can cover work on an hourly, half-day or daily basis - as long as this is done on a regular basis.

Collective labour agreement (Article 356 et seq. CO)

National or regional collective labour agreements (GAV) apply to certain industries or fields of work. These are usually concluded between employee unions and employer organisations. The two parties negotiate the conditions, in each case with regard to the ideas of their association members. In many cases, the aim is to achieve security for employees with regard to certain aspects of work, e.g. through an industry-wide minimum wage. The minimum requirements set out in the GAV may not be undercut - but improvements are permitted. There are also GAV's in certain companies. This often ensures that large corporations treat their employees uniformly at all locations.

Standard employment contract (Article 359 et seq. CO)

Standard employment contracts (NAV) are often drawn up if there is no GAV for the sector. This is the case in professions in which customary industry practices (e.g. with regard to wages) are sometimes not followed. An NAV is issued by the respective canton or the federal government. It can apply in addition to GAVs and individual employment contracts and always takes precedence. This means that these agreements can only be amended if this is done in favour of the employees. One example is the NAV Hauswirtschaft. This applies nationwide in addition to any cantonal NAVs. It regulates the minimum wages in the housekeeping sector.

Special individual employment contracts

In addition to the general individual employment contracts, there are also some special forms. Some special regulations apply to these special employment relationships, which are set out in the relevant sections of the law. These include the following:

• Apprenticeship contract (Article 344 et seq. CO): Apprenticeship contracts are concluded between apprentices and the employer.
• Commercial traveller contract (Article 347 et seq. CO): This type of contract is used for permanently employed commercial travellers, for example sales representatives.
• Home employment contract (Article 351 et seq. CO): A contract of this type is required for employees working from home or in a home office.

Most employment contracts in Switzerland are recorded in writing. This has the advantage of being easier to prove in the event of differences of opinion or disputes. As a rule, it is a multi-page document that is signed by both parties. In principle, however, an individual employment contract does not require any special form to be valid in accordance with Article 320, paragraph 1 CO - therefore, an oral form would also be permissible. Furthermore, even a tacit agreement is possible. It is also considered an employment contract if the employer makes use of services that can only be expected in return for the payment of wages (Article 320, paragraph 2 CO). However, the employer is subject to an obligation to provide information if an employment contract is concluded for an indefinite period or for longer than one month. In this case, the employer must provide the employee with the following information in writing (Article 330b CO):

• Names of the contracting parties
• Date of commencement of the employment relationship
• Function of the employee
• Salary and any wage supplements
• Weekly working hours

Attention Exception: According to Article 344a, paragraph 1 CO, an apprenticeship contract must be in writing. Commercial travellers must also conclude a written employment contract containing certain information (Article 347a CO). In addition, certain special regulations must be set out in writing. If an overtime arrangement is to deviate from the statutory provisions, this must be in writing (Article 321c, paragraph 3 CO). Furthermore, collective labour agreements are always recorded in writing (Article 356c, paragraph 1 CO).

To what extent are the regulations regarding the employment contract flexible?

Swiss law distinguishes between two different types of mandatory provisions. These provisions must be complied with for every type of employment contract. The difference between the two types is that one is absolutely unalterable, while the other can be altered under certain conditions.

Unalterable provisions in accordance with Article 361 CO

These provisions must always be complied with. They may not be deviated from, regardless of whether the employee or the employer would benefit from this. If, for example, there is a clause in the employment contract that violates one of the regulations, this part of the contract must be considered null and void. These include the statutory provisions on the following topics:

• Overtime work in accordance with Article 321c, paragraph 1 CO
• Allowances for staff welfare in accordance with Article 331, paragraph 1 and 2 CO
• Termination of employment relationships in accordance with Article 334, paragraph 3 and Article 335 CO
• Consequences of unjustified failure to take up or leaving employment in accordance with Article 337d CO

Modifiable provisions in accordance with Article 362 CO

In contrast, there are some provisions that may be deviated from in certain situations, but only if the change is favourable to the employee. If only the employer would benefit, the deviation is not permitted. This includes the following points, among others:

• Share of the business result and commissions in accordance with Article 322a CO
• Protection of the employee's personality in accordance with Article 328 CO
• Holidays, leave and maternity/paternity leave in accordance with Article 329 CO
• Notice periods in accordance with Article 335c, paragraph 3 CO

If in doubt, seek expert advice from an employment lawyer so that you know exactly what your rights are and can assert them.