Switzerland continues to attract numerous foreign businesses to the country. The country is ranked amongst the best countries in terms of ease of doing business meaning that foreign company have a relatively simple time relocating or expanding their business to the country. In addition, a simple and business friendly tax and legal system also make this country very attractive to foreign businesses.

The employment laws are also quite lenient on employers, including on foreign employers. However, things quickly become favourable towards the employee side when employment issues are taken to court. Hence, if you are planning a Business relocation to Switzerland, and are planning to hire Swiss employees, it is imperative that you have a clear understanding of the Swiss employment laws.

The following is a simple guide of the most pertinent Swiss employment rules.

  1. Employment Contracts

It is prudent to have a written contract signed by you as the employer and the employee. The written contract should include the term of the contract, i.e. either permanent or temporary. In addition, the contract should detail the exact amount of salary that will be paid to the employee on a monthly basis, as well as the exact date the amount will be paid to the employee.

You should also include the number of vacation days that the employee is entitled to every year. As per the norm in employment contracts, you should also include a non-compete clause as well as one for confidentiality.

The job description will also form an important part of the employment contract that you draw up.

It is important to note that having a written contract between you and the employee is not a requirement by law. However, it will be of great help to you in case your employee takes you to court, or you have to take them to court.

  1. Termination of employment contracts

If the contract specifies the term of the contract is fixed, then neither you nor the employee can terminate the contract until the specified duration indicated in the contract has lapsed. It is only when there are legally justifiable reasons that you are permitted to end the contract before the set duration is over.

If the contract does not specify the term of the employment, then the party seeking to terminate the agreement should provide the other party with a notice as prescribed by law. However, if there are justifiable reasons that can be proven in court, then a party can seek to terminate the contract immediately.

It should be noted that in most instances, if the employer chooses to terminate the contract immediately, the employee has every right to take him/her to court. This usually happens because the employee is not eligible for unemployment benefits if his or her contract is terminated with immediate effect.

To prepare for such a scenario, it is imperative that you keep a record of all of the times you have officially warned or reprimanded the employee. The court will most likely be on your side if you have written evidence to support the reason for immediate termination of the contract.

It is also important to note that under normal termination, the employee needs to receive the termination letter before the last day of the month. The termination notice begins to take effect on the first day of the following month.

  1. Personal Liability

Swiss law dictates that employers are personally liable to pay their employees’ tax at the source. The only exception to this rule is if the employee or employees in question is/are Swiss C/B permit holders.

In addition, you as the employer are personally liable for ensuring the payment of premiums of the employees’ professional insurance cover.

Haden Armstrong