Handbook for Investors. Business location in Switzerland.

Fig. 37: Labor market deregulation (2009)
Entrepreneurship is 1 = severely impaired,
10 = not impaired at all
1 Denmark 8.70
2 Switzerland 7.75
3 Singapore 7.40
4 Hong Kong SAR 7.13
5 Thailand 6.42
8 Japan 5.80
14 People’s Republic of China 5.33
16 UK 5.26
19 USA 5.06
26 Ireland 4.65
27 Russia 4.63
30 Netherlands 4.36
33 India 4.15
35 Luxembourg 4.04
40 Belgium 3.85
44 Italy 3.65
45 Brazil 3.63
46 France 3.58
51 Germany 3.06
Source: 2009 IMD World Competitiveness Yearbook
8.3.1 Individual employment contracts
Employers are required to provide employees with the key points
of the employment contract in writing by no later than one month
after the employee starts work.
In larger companies, it is recommended to have an employee
handbook containing the most important employment provisions,
as the employment contract itself only contains provisions on
wages, notice period and special terms (e.g. non-competition
clause). Employment contracts and employee handbooks must
conform to the mandatory provisions of the Swiss Code of Obligations
and the provisions of collective bargaining agreements,
where applicable. Employee handbooks should not be confused
with agreements between the employer and the works council,
as practiced in EU countries (and which do not exist in this form
in Switzerland). However, industrial companies are required to
establish «work rules» containing rules on occupational health
protection and accident prevention. The employees or their representatives
must be consulted before the rules are put into force.
Companies may include in the employment contract a noncompetition
clause for the duration of the employment with the
company and beyond. Through a non-competition clause, the
employer prevents employees who leave the company from using
special knowledge that they gained while working there in a way
that provides competition for their former employer. In practice,
demanding requirements are imposed on the wording and
enforcement of such clauses. There is no mandatory provision for
compensating employees for agreeing to such non-competition
clauses. Non-competition clauses must:
• be in written form
• clarify the definition (location, area, client group); a general
restriction is not sufficient
• specify duration; a maximum of three years is permitted.
8.3.2 Collective labor contracts
Collective bargaining agreements are concluded between employer
and employee associations. By so doing, the parties define
the minimum conditions (e.g. minimum salaries) that individual
employment contracts cannot go below. Employers and employees
are essentially free to decide whether they would like to join a
collective bargaining agreement or not. In Switzerland, there are
about ten such agreements that are generally binding and about
1,500 that are not generally binding. The former group applies to
the whole of the sector in question, while the latter only applies if
the contractual parties are members of the relevant associations.
If there are differences of opinion between an employer and the
workforce, an amicable solution is sought internally. This fundamental
approach dates back to the «peace agreement» between
Swiss employers and employee organizations of 1937. In accordance
with the mutual agreement to maintain peace, workers
and management seek to resolve conflict through discussions.
Solution-oriented labor market partnerships are still the norm
today.
Handbook for Investors 2010
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