Employment contracts are essential documents that outline the rights and obligations of both employers and employees. If you want to hire employees in Switzerland, it’s important to understand the unique rules related to employment contracts to ensure you meet your obligations as an employer.
In this section, we’ll discuss some of the different types of employment contracts in Switzerland, including fixed-term contracts and the circumstances in which they can be used. We’ll also talk about the minimum terms that employers need to provide in writing to their employees. Finally, we’ll provide details on certain key employee rights, including the rules about working hours and remote work in Switzerland.
An employment contract is a document signed by an employer and employee that defines the key terms of the employment relationship. It sets out the rights and responsibilities of both parties, including the employee’s role and the compensation they’ll receive. In Switzerland, employment contracts must comply with the requirements of the Swiss Code of Obligations and the Labour Act, as well as any applicable collective bargaining agreements.
Collective bargaining agreements (or collective labour agreements) are agreements between trade unions and employers or employers’ associations. They sometimes include ‘standard’ employment contracts which lay out minimum provisions for things like wages, vacations, working hours, leave, and retirement age. If a collective agreement applies to an employer in Switzerland, they are not allowed to deviate from the standard employment contract.
In sectors where no collective agreement applies, government or cantonal (state) authorities can issue standard employment contracts for specific occupations, which again provide minimum standards for key employment conditions. These can only be modified by individual employment contracts if they are made more favourable towards the employee.
Probationary periods are permissible and common in Switzerland, up to a statutory limit of three months.
There are certain company policies that are mandatory for employers in Switzerland. For example, industrial companies must have a written health and safety policy. Other common (but not compulsory) policies include expense-reimbursement policies and grievance policies. Whistleblowing policies are not mandatory in Switzerland.
Industrial companies must have their mandatory health and safety policy reviewed by the Cantonal Labour Authority.
In Switzerland, employers are required to provide certain terms to their employees in writing and can also choose to include additional information.
As a minimum, employers in Switzerland are required to provide their employees with certain details in writing within one month of employment. This written statement must include:
Employers in Switzerland can also choose to include additional terms in their employment contracts. For example, many employers include a non-competition clause, which ensures employees don’t work for or set up competing businesses during their employment. These agreements can also be extended beyond the end of the employment relationship, subject to certain conditions.
In Switzerland, a fixed-term contract is a contract that ends automatically on the expiry of its term without notice. That means that if any type of notice is required to end the contract, it doesn’t qualify as a fixed-term contract in Switzerland. We’ll discuss some other types of employment contracts in Switzerland below.
Employers in Switzerland can employ workers on fixed-term contracts for any reason. For example, they’re commonly used to replace other employees who are temporarily out of work because of illness or maternity leave. Employers may also engage workers on fixed-term contracts to work on short-term, one-off projects. For some employment relationships, such as apprenticeship contracts, a fixed-term contract is obligatory.
A key characteristic of a fixed-term contract in Switzerland is that it ends automatically at the end of its term. Fixed-term contracts can’t be terminated by ordinary notice of termination by either the employer or the employee. If an employee and an employer tacitly agree to continue a fixed-term contract after its term, it becomes an indefinite contract.
Maximum-term contracts are another type of contract in Switzerland. Like a fixed-term contract, these have a set end date at which they are automatically terminated. However, they can also be terminated early by either party with the correct notice.
Similarly, minimum-term contracts have a minimum term that must be reached before ordinary notice of termination can be used. Instead of terminating on the end date, they become an indefinite term contract.
An employer in Switzerland can agree to renew an employee’s fixed-term contract if they still require their services. Unlike in some countries, there’s no specific limit on the number of times a fixed-term contract can be renewed or extended.
However, some employee rights, including protection from dismissal and the right to a salary in the case of inability to work, are only available to those on open-ended contracts. Because of this, case law has developed restrictions on employers’ ability to conclude multiple fixed-term contracts with the same employee for the same work.
This means employers can’t use ‘chain contracts’ to effectively deprive employees of their rights. If there is no objective reason for using a fixed-term contract, consecutive contracts are treated as a single indefinite contract with a minimum term that ends on termination of the last fixed-term contract.
This means employers should be careful to only use fixed-term contracts when they have a genuine need. Objective justifications for using a fixed-term contract (or a series of fixed-term contracts) may include:
Working hours in Switzerland vary by industry and by canton. Most employees work between 40 and 44 hours per week, and the standard working week is Monday–Friday.
For industrial and office workers, technicians, and retail staff, the maximum working hours in Switzerland are generally 45 hours per week. In the trade sector, the maximum is 50 hours. In some cases, collective agreements and individual contracts provide for a different number of maximum working hours in Switzerland, though this can’t be more than the statutory limit.
Overtime in Switzerland is defined as any work carried out above the employee’s contractually agreed hours. It’s generally compensated at 125% of the employee’s normal wages. Collective bargaining agreements and employment contracts may provide different conditions as long as they are at least as favourable to the employee.
In some cases, employees can be compensated for overtime with compensatory time off instead of monetary compensation. This time off must be granted within 14 weeks of the overtime, and it’s common to give employees 1.5 hours off per hour of overtime worked. Overtime generally can’t exceed two hours per day, or 170 hours per year for a 45-hour/week contract (140 hours per year for a 50-hour/week contract).
Employees in Switzerland are entitled to breaks during their workday. Depending on the number of hours worked in a day, these may be between 15 and 60 minutes long. Employees also have the right to at least 11 hours of rest between shifts and one full day of rest per week, and.
Employers in Switzerland must have a system in place for tracking their employees’ working hours. This can be done using electronic or mechanical clock in/out systems, manual time entry, or specialised software.
In the past few years, many Swiss companies have embraced remote work, with employees working fully or partially from home. Remote work is not specifically regulated by law in Switzerland, and there’s no general obligation for employers to pay employees for the cost of working from home or setting up a home office. However, collective bargaining agreements may provide rules that employers must abide by, and some large companies have their own regulations. Some public bodies have also introduced internal regulations on remote work.
In today’s world, employees can effectively work from anywhere — including in another country. However, the tax and social security implications of this arrangement can be complex. For this reason, Switzerland signed a multilateral agreement with several EU and EFTA countries in 2023, allowing more flexibility for remote workers.
According to the agreement, remote workers may perform up to 49.9% remote work from their country of residence, while the social insurance laws of the employer’s state of domicile remain applicable. For example, a Swiss company could hire an employee from another country to work partially in Switzerland and partially remotely in their own country. The social insurance laws of Switzerland would apply as long as the remote work doesn’t exceed 49.9% of the employee’s total work time.
Like all countries, Switzerland has its own rules and regulations when it comes to employment contracts — and non-compliance could land your company in hot water.
Thankfully, our team is experienced in drawing up tailored, compliant contracts in Switzerland (and more than 100 countries worldwide). That means that, when you work with us, you won’t need to waste time worrying about whether you’ve got it right. Instead, you can focus on what matters: your business.
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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