In Switzerland, employment contracts are governed not only by the Swiss Code of Obligations (CO), but also by the Federal Labor Act (LTr) and its ordinances (OLT), which provide a clear legal framework for the conclusion, drafting, amendment and termination of employment contracts (art. 319 ff CO). The conclusion of an employment contract is subject to the principle of freedom of contract (art. 19 CO), which means that the parties are free to negotiate the terms and conditions of their agreement, subject to the mandatory provisions of the law and other provisions laid down in collective labor agreements (CCT).
However, an employment contract can be defined as an agreement by which a person (the employee) undertakes to work for another person or company (the employer) in return for remuneration. An employment contract may be concluded for a fixed term (CDD) or indefinitely (CDI), depending on the needs of the company and the wishes of the parties.
Types of contract (permanent, fixed-term, temporary, etc.)
The permanent employment contract (CDI) is the most common type of contract in Switzerland. It provides for a stable, long-term working relationship between employee and employer, with no time limit. An indefinite-term contract can be terminated by either party, subject to a notice period agreed between the parties, or in accordance with legal or contractual provisions.
A fixed-term employment contract (CDD) is a contract concluded for a limited period, which may be renewed one or more times. The CDD is used for seasonal jobs, temporary replacements or specific projects requiring additional manpower.
A temporary employment contract is a contract between a temporary employment agency and an employee, who is then placed at the disposal of a client company for a fixed period. This type of contract is often used to meet one-off needs, or to cope with seasonal fluctuations in activity.
A part-time employment contract is a contract concluded for an indefinite or definite period, which provides for a reduction in working hours compared with full-time employment. The terms and conditions of part-time work are defined in the employment contract and may vary according to the needs of the company and the wishes of the employee.
Drafting and essential clauses
The drafting of an employment contract must be precise and complete in order to avoid any subsequent conflict or disagreement. The essential clauses to be included in an employment contract are as follows:
- The parties: employer and employee names and addresses.
- Function: the position held by the employee, and the tasks entrusted to him or her.
- the percentage: i.e. the employee’s occupancy rate
- Remuneration: base salary, plus any benefits in kind, bonuses or bonuses.
- Schedules: working hours, days off and paid vacations.
- Duration: the length of the contract (permanent, fixed-term, etc.) and renewal or termination terms.
- Working conditions: specific working conditions, such as the workplace, wearing a uniform, etc.
- Employee obligations: the employee’s professional obligations, such as confidentiality, duty of care, etc.
- Termination conditions: terms and conditions for terminating the contract, including notice period, cause for termination, etc.
- Special clauses: special clauses that can be negotiated by the parties, such as non-competition clauses, geographical mobility clauses, profit-sharing, etc.
It is important to note that certain clauses are subject to legal and regulatory limits. For example, a non-competition clause can only be applied if it is justified by the legitimate interests of the company and complies with the formal and substantive conditions laid down by law.
Contract modification and termination
There are various ways of modifying or terminating an employment contract in Switzerland, depending on the circumstances. Where there is agreement between the employer and employee, the contract can be modified. If the changes concern essential clauses of the contract, the employee must give his or her consent.
In Switzerland, employment contracts can be terminated in various ways. In the case of fixed-term contracts, it is not necessary to give notice (art. 334 para. 1 CO). For open-ended employment contracts, either the employer or the employee may terminate the contract (art. 335 al. 1 CO). However, depending on the circumstances, notice periods must be observed (art. 335a ff CO). During the trial period, which generally corresponds to the first month of employment, the contract may be terminated by either the employer or the employee at any time (art. 335b al. 1 CO).
If an employee is on sick leave or has suffered an accident, he is protected against dismissal by his employer. This protection varies according to the employee’s length of service, and applies for 30 days during the first year of service, 90 days from the second to the fifth year, and 180 days from the sixth year onwards (art. 336c al. 1 let. b CO). Women also benefit from this protection during pregnancy and during the 16 weeks following childbirth (art. 336c al. 1 let. c CO).
The party who terminates the employment contract unfairly is required to pay compensation (art. 336a CO).
If one of the parties is guilty of serious misconduct that makes it impossible to continue the employment relationship, the employment contract may be terminated immediately and without notice (art. 337 CO). Serious misconduct is characterized by a significant and fundamental breach of the obligations arising from the employment contract, which prevents the injured party from maintaining the contract in force, as the bond of trust is irretrievably broken. Acts such as theft, violence, harassment or disclosure of trade secrets may constitute gross misconduct.
It is advisable to consult a lawyer specializing in employment law in the event of difficulties or disagreements relating to your employment contract, whether you are an employer or an employee, in order to protect your rights and interests. All the more so as defending your rights and interests often involves meeting deadlines and other obligations.
