The Employment Contract in Switzerland: Everything You Need to Know About the Code of Obligations and the CCT

The law governing Swiss employment contracts regulates the relationship between employers and employees for those wishing to work in Switzerland. More flexible and less restrictive than the contracts of its neighbours (notably France), it is essential to understand the specific features of Swiss employment law for anyone preparing to work in the Swiss Confederation, whether they are residents or cross-border workers.

Employment contracts in Switzerland can be fixed-term or open-ended, but contracts are primarily governed by the Code of Obligations (CO). The collective labour agreement (CCT) also plays an important role in regulating working conditions, often setting minimum salaries and benefits beyond what the law requires, often in favour of employees.

This guide gives you the keys to understanding and negotiating your employment contract with complete peace of mind in Switzerland and to making a success of your professional career in a new job.

Types of employment contracts in Switzerland

Under Swiss law, there are two main contractual frameworks for employment relationships, including the Individual Employment Contract (CIT), and the Collective Labour Agreement (CCT).

1. The Individual Employment Contract (CIT)

The individual employment contract is the agreement concluded directly between the employer and the employee, and it may require a work permit for foreign nationals. It is governed by Articles 319 et seq. of the Code of Obligations (CO). The CIT can be:

• Open-Ended Contract (CDI): The most common form, with no time limit. It offers workers the best job stability and requires compliance with the long notice periods after the probation period.

• Fixed-Term Contract (CDD): Limited in time according to the company's needs. As a general rule, a succession of fixed-term contracts intended to circumvent the protective rules of the open-ended contract is considered abusive and can result in the employment contract being reclassified as open-ended.

2. The Collective Labour Agreement (CCT)

The CCT is a written agreement concluded between employers' associations or an individual employer and associations of Swiss workers (trade unions), often tailored to each sector. It is an essential instrument of the labour market and social dialogue in Switzerland. It:

• Sets minimum conditions, including the minimum salary in contracts, for employees in a sector or a company (notably minimum salaries, working hours, holidays and the obligation to pay a 13th month's salary).

• Its provisions take precedence over the CIT if they are more favourable to the employee (the principle of favourability).

• It is often made mandatory in certain sectors by the Federal Council.

Employment contracts in Switzerland are often concluded orally, but it is strongly recommended, especially for cross-border workers, to insist on a written contract specifying all the working arrangements and the salary in Swiss francs (CHF).

Be careful not to confuse the CTT (standard employment contract) with the CCT: these are normative acts issued by the State that regulate employment relationships.

Contents of an employment contract in Switzerland

Even though the oral form is legal, the Swiss employer is required, in all cases, to inform the employee in writing of the essential elements of the contract (Art. 330b CO). An employment contract in Switzerland should ideally contain the following provisions and information:

• The name and address of the employer and the employee.

• The start date of the employment relationship.

• The exact role and job description (terms of reference), crucial elements for a career.

• The base salary and any supplements (bonuses, 13th month's salary), expressed in Swiss francs (CHF).

• The weekly working hours (often 40 to 42 hours) and the arrangements for compensating overtime.

• The number of paid annual leave days (holidays).

• The length of the probation period.

Swiss employers must also inform employees if a collective labour agreement (CCT) applies to their contract, in compliance with employment law. Any significant change to the employment contract (salary, role) requires the agreement of both parties, often through a written amendment.

Probation period and working hours in Switzerland

Probation Period

The probation period in Switzerland is legally set at one month (Art. 335b CO), but can be extended by written agreement between the parties up to a maximum of three months.

• During this period, the notice periods for termination are much shorter (generally 7 days to the end of a working week).

• The aim is to allow both parties to verify their professional and personal compatibility, a key step before committing to the long term.

Working Hours and Leave

The maximum working hours are set by the Labour Act (LTr), and are generally longer than working hours in France:

• 45 hours per week for industrial companies, office staff and technical management.

• 50 hours per week for other workers.

• Overtime is common and must be compensated with time off or a salary supplement (often 25%).

Employees are entitled to a legal minimum of paid leave set at four weeks per year of service (five weeks for those under 20).

Collective labour agreement and the labour market in Switzerland

The Collective Labour Agreement (CCT) is a pillar of regulation in the Swiss market, particularly for workers who are nationals of other countries. It is often more favourable than the law, and it is essential to know whether your employer is subject to one.

The Swiss market is characterised by complex relationships between employers and employees, particularly when it comes to negotiation.

• Great flexibility: Hiring and dismissal procedures are generally less cumbersome than in France.

• Limited legal regulation: Many aspects (13th month's salary, bonuses, pensions) are not defined by law but by the contract or the CCT.

• High salaries: Strong competitiveness and low indirect taxation allow employees to enjoy some of the highest pay levels in Europe, paid in Swiss francs (CHF).

This flexibility gives employees the opportunity to change jobs easily and to negotiate their working conditions and their salary more directly, thereby encouraging the movement of talent.

Terminating an employment contract in Switzerland

The termination of an employment contract in Switzerland follows strict but relatively simple rules, governed by the CO.

Statutory Notice Periods

The ordinary termination of a contract (by the employer or the employee) must comply with the notice periods set by the Code of Obligations (CO), unless the CCT or the CIT provides for longer periods:

Special Cases

• Dismissal without notice (for just cause): Very rare and reserved for serious and immediate misconduct (theft, breach of professional confidentiality). The contract ends immediately.

• Unfair dismissal: Employees have the right to challenge a termination if it is unfair (e.g. on grounds of sex, age, pregnancy, or illness through no fault of their own). The dismissal remains valid, but the employer is liable for compensation of up to six months' salary.

Termination can affect entitlement to unemployment insurance if notice is given by the employee without a new job lined up or in the case of serious misconduct (waiting period).

Rights and obligations of employees in Switzerland

Employees in Switzerland enjoy significant rights, accompanied by clear obligations to maintain the balance of the working relationship, unlike under French law.

Employment rights

• The right to fair pay (a salary in line with the contract and the CCT), paid in Swiss francs.

• The right to holidays and regular breaks (Labour Act).

• The right to safety and health at work (the employer must take protective measures against risks).

• The right to join a trade union and take part in union activities.

Obligations

• Duty of care: Carry out the work diligently, use tools correctly and report on one's activities.

• Duty of loyalty: Not to harm the interests of the company (prohibition of unfair competition).

• Complying with the rules of the company and the instructions of their company, insofar as they are lawful and not abusive.

Employee protection in Switzerland

Employee protection in Switzerland is ensured by the CO, the LTr and specific laws, offering significant guarantees to workers.

• Protection against discrimination and harassment: Companies must take measures to prevent this type of abuse. Victims have the right to file a complaint with the authorities or expert commissions.

• Protection against unfair dismissal: The absence of justification for an ordinary termination does not make the dismissal unfair, unless it contravenes expressly prohibited grounds (a health condition through no fault of the employee, military service, maternity, etc.).

• Protection in the event of illness or accident: The employer is required to continue paying the salary for a limited period (according to the Bern, Zurich or Basel scales, widely used in the cantons), after the end of the probation period, if the worker is prevented from working through no fault of their own.

Resolving disputes in Switzerland

Disputes between employers and employees in Switzerland are common, and there are several ways to resolve them, often favouring speed and conciliation.

• Amicable solution: The employer and the employee should always try to resolve disputes amicably, often through internal dialogue or via Human Resources.

• Mediation or Arbitration: Professionals (mediators) or joint committees (under a CCT) can step in to find a compromise before going to court.

• Recourse to the Courts (Employment Tribunal): As a last resort, employees have the right to go to court to resolve a dispute. Proceedings before the Employment Tribunal are often free or inexpensive at first instance for employees.