Your first employee has accepted your offer. Now you need a clear contract: what salary will they receive, how many hours will they work, how long is the probation period, and what happens if they are absent or leave? This is often when a template downloaded from the internet starts to show its limitations.
A good employment contract does not need twenty pages covering every imaginable event. It records each party’s commitments, respects Swiss law and works alongside two useful documents: a job description and staff policies. This article explains how to prepare a private-sector employment contract for a Swiss SME, with illustrative clauses and a practical signing checklist.
At a glance
- An oral employment contract can be valid, but statutory written information and specific form requirements still matter.
- Pay, working hours, holidays and termination must comply with the Code of Obligations and applicable sector rules.
- The job description defines the role; staff policies organise procedures without overriding contractual rights.
The Swiss framework: individual contracts, the CO, the Employment Act and collective agreements
An employment contract establishes a relationship in which someone works for an employer in exchange for pay. The employer directs the work and the employee forms part of its organisation. Calling the document a “consultancy agreement” does not turn an employment relationship into self-employment.
The Swiss Code of Obligations (CO), particularly Article 319 onwards, governs the contractual relationship. The Employment Act (EmpA) sets requirements on health protection, working time and rest within its scope. A collective employment agreement (CEA), a standard employment contract or a cantonal minimum wage may impose additional mandatory rules.
Before drafting, identify the actual activity, the workplace and any sector rules. A restaurant, a cleaning business and a consultancy may face different requirements. Check the legislation’s exemptions and personal scope as well: giving someone a “manager” title does not automatically place them outside the Employment Act.
A clause is not valid simply because both parties have signed it. Contract terms cannot remove an employee’s mandatory rights. You can, however, offer more favourable conditions, such as additional holiday, a longer notice period or better sickness cover.
For the wider employer–employee relationship, see our article on Swiss employment law (French).
Does a Swiss employment contract have to be in writing?
An ordinary employment contract generally does not require writing to exist: an oral agreement or the start of paid work can be sufficient (Article 320 CO). No signature does not mean no contract. Specific relationships and clauses nevertheless have form requirements, including apprenticeship contracts and post-employment non-compete undertakings.
Article 330b CO requires written information where employment is indefinite or lasts more than one month. Within one month of the start, the employer must communicate the parties’ names, the start date, the employee’s role, salary and any supplements, and weekly working hours. Changes to these particulars must also be communicated in writing within one month of taking effect.
The practical approach is to provide a complete contract before the employee starts. The minimum statutory information does not replace proper organisation: it does not, by itself, settle the workplace, scheduling, expenses or supporting policies.
Handwritten and electronic signatures
Where the law requires written form, a scanned signature, a typed email name or just any electronic signature may not be sufficient. A qualified electronic signature with a qualified electronic time stamp under Swiss legislation is equivalent to a handwritten signature, subject to applicable statutory or contractual exceptions (Article 14 CO).
An electronic process can record acceptance of an ordinary contract with no statutory form requirement. Check separately any clauses requiring writing and any form the parties have themselves agreed. Keep the final document, its annexes and evidence of acceptance.
Decisions to make before drafting
Use this table as a decision sheet. You are not simply filling in blanks: every entry should describe arrangements your business can actually follow.
| Topic | What to specify | Mistake to avoid |
|---|---|---|
| Parties | Legal name, address, employee and authorised signatory | Naming a different company from the actual employer |
| Start and duration | Start date, open-ended or fixed-term contract, any end date | Confusing a fixed-term end date with a notice period |
| Role | Position, main duties and reporting line | A description too vague to establish responsibilities |
| Workload and hours | Employment percentage, full-time reference and actual hours | Writing only “80%” |
| Location | Usual workplace, travel and agreed remote working | Allowing regular work abroad without clear arrangements |
| Pay | Gross salary, payment frequency, 13th salary and variable pay | Mixing up annual salary and monthly instalments |
| Additional hours | Approval, recording and compensation | A blanket exclusion of all statutory entitlements |
| Holidays | Number of weeks, calculation and booking procedure | Reducing holiday weeks because the role is part-time |
| Absence | Notification, evidence, continued pay and insurance | Assuming sickness insurance automatically replaces every obligation |
| End of employment | Notice periods, termination dates and agreed form | Counting notice from the date of posting |
| Annexes | Identified job description and staff policies | Referring to a document the employee has not received |
Open-ended contracts, fixed terms and probation
Open-ended employment contracts
An open-ended contract suits an ongoing need. It has no automatic expiry date and either party can terminate it under the applicable rules. The statutory probation period is the first month. A written agreement, standard employment contract or CEA can provide otherwise, but probation cannot exceed three months (Article 335b CO).
During probation, the statutory notice period is seven calendar days, unless a valid different provision applies. Notice must reach the other party during probation, although employment may end afterwards. Absence through illness, accident or involuntary performance of a legal obligation extends probation by the corresponding period.
Illustrative wording for an open-ended contract: “Employment begins on 1 November 2026 for an indefinite period. The first three months constitute probation. During this period, either party may terminate the contract on seven calendar days’ notice. Statutory extensions of probation remain reserved.” This choice requires compliance with sector rules and a valid agreement extending probation to three months.
Fixed-term employment contracts
A fixed-term contract normally ends on its agreed expiry date without notice (Article 334 CO). It does not automatically include probation. If you want a probation period, expressly agree it on terms suitable for the length of employment.
A fixed-term contract is not, by default, freely terminable early using the ordinary notice periods for open-ended employment. An early termination option needs an explicit, coherent clause; immediate termination for good cause is a separate issue. Avoid artificial successive renewals designed to evade statutory protection. If employment tacitly continues after expiry, the contract is treated as renewed for an indefinite period.
Salary: make the annual amount and its components clear
State the gross salary and what it covers. For monthly pay, specify the number of payments and the arrangements for any 13th salary. An annual salary of CHF 78,000 means CHF 6,000 paid thirteen times or CHF 6,500 paid twelve times. These produce different monthly payments.
The CO does not generally require every employer to pay a 13th salary. It becomes due where, for example, the contract or an applicable CEA provides for it. When it is a salary component, it is treated differently from a discretionary gratuity.
Bonuses and commissions
The word “bonus” does not determine the legal treatment. Distinguish remuneration calculated using agreed criteria from a gratuity involving genuine discretion. Define the period, targets, calculation, when entitlement arises and the payment date. Rules on departure must be consistent with the actual nature of the payment.
For sales commission, specify whether the calculation uses signed contracts, invoiced revenue or another valid basis. Address cancellations and refunds. An unverifiable formula or a target changed retrospectively makes disagreement predictable.
Hourly pay and holidays
Hourly pay does not remove the right to paid holiday. Paying holiday entitlement through an hourly supplement is permitted only in particular situations and under strict conditions. Do not use “holiday pay included” as a standard solution, especially for regular working hours.
The full cost of employing someone exceeds gross salary. Include employer contributions and pension costs in your hiring budget. In the contract, distinguish these costs from deductions made from the employee’s pay.
Working hours and overtime: two different legal regimes
“80%” needs to translate into hours. If full-time work is forty hours per week, 80% means thirty-two hours. Also specify the usual distribution of working time and how schedule changes are agreed.
Contractual overtime under the CO means work beyond agreed or customary hours. Employees must perform it where circumstances require and the statutory conditions are met. With the employee’s consent, it can be compensated by time off of at least equal duration. Otherwise, the default is payment with a supplement of at least 25%, subject to a valid written variation, standard employment contract or CEA (Article 321c CO).
Statutory excess working hours under the Employment Act are hours beyond the applicable legal maximum, generally forty-five or fifty hours per week depending on the employee category. Specific conditions and compensation rules apply. A clause excluding payment of contractual overtime does not remove these public-law protections.
Example: an employee’s contract provides for thirty-two hours a week. She exceptionally works thirty-six hours. The four additional hours are measured against the agreed thirty-two hours, not the full-time forty-hour week. This does not automatically mean she has worked excess hours under the Employment Act.
Keep reliable time records, an approval process and a record of outstanding balances. Lack of advance approval does not always exclude payment where the employer knew the work was needed or being performed. The contract should help manage workload, not make working hours disappear.
Holidays, sickness, expenses and remote working
Annual leave and public holidays
The statutory minimum is four weeks’ annual leave per service year and five weeks for employees under twenty (Article 329a CO). The CO does not automatically grant a fifth week from age fifty, although a CEA or contract may do so.
Part-time work does not reduce the number of holiday weeks. Someone working four days a week with four weeks’ leave has sixteen days corresponding to their schedule. Sixteen days do not represent the same leave entitlement for someone working five days a week.
Public holidays depend, among other things, on the canton. Pay entitlement must be considered in light of the pay arrangement and applicable rules. Avoid copying one canton’s clause into every Swiss contract. Set out how leave is requested while respecting its purpose and statutory rights.
Sickness and daily sickness insurance
Without an agreed equivalent arrangement, Article 324a CO requires limited salary continuation where employment has lasted more than three months or was entered into for more than three months, and the other statutory conditions are met. The statutory first-year entitlement is three weeks; it increases thereafter under the applicable rules. Daily sickness insurance can provide alternative cover, but equivalence, the form of the agreement and the benefits actually insured all matter.
The contract or annex should explain absence reporting, certificates, coverage, waiting periods and premium sharing. Do not promise “80% for 720 days” without checking the policy and how it interacts with the employer’s obligations. Our article on the Bern sick-pay scale explains this in detail.
Business expenses and remote working
The employer must bear necessary expenses arising from the work (Article 327a CO). A flat-rate allowance must cover them. A general clause shifting necessary business expenses to the employee is invalid.
For remote working, specify permitted days and locations, equipment, data security, availability and expenses. One day at home in Switzerland and regular work from France raise different social insurance, tax and authorisation issues. Require advance approval of foreign work locations instead of granting unlimited freedom to work anywhere.
Confidentiality, intellectual property and non-compete clauses
Employees owe duties of loyalty and confidentiality. A confidentiality clause should identify what needs protection: customer data, negotiated prices, source code, processes or non-public projects. Define permitted business use, access, approved tools and the return of documents on departure. Our article on Swiss non-disclosure agreements explains the arrangements to consider.
Ownership of work products is not governed uniformly. Inventions, software, copyright works and pre-existing files follow different rules. Define the deliverables and usage rights the business needs. A vague statement that “everything belongs to the employer” does not replace an assessment of the relevant rights.
A post-employment non-compete requires a written undertaking and the conditions of Article 340 CO: access to customers or manufacturing or business secrets, and a risk of substantial harm from using that knowledge. It must be limited by geography, duration and activity. It may exceed three years only in special circumstances; three years is therefore not a recommended default.
Article 340c CO also provides grounds for the restriction to end, including where the employer no longer has a substantial interest or terminates without a justified reason attributable to the employee. A ban on working anywhere in an entire sector in any role is not a sensible clause to copy.
Job descriptions and staff policies: their respective roles
A job description sets out duties, responsibilities, autonomy, reporting lines, working relationships and success criteria. It tells the employee what is expected and gives the employer a concrete basis for evaluating performance.
For an administrative assistant, specify tasks such as processing supplier invoices, preparing the monthly file for the accountant, tracking supporting documents and requesting missing records. Explain that the assistant prepares payments but the director approves them. That separation is more useful than a vague “administrative and financial management” label.
The staff handbook brings together common rules on working hours, holiday requests, absence, expenses, IT, behaviour and safety. Employers can issue instructions (Article 321d CO), but cannot use a policy to unilaterally change essential contractual commitments such as salary or workload.
Identify annexes by title and version, supply them before signing and explain their relationship to the contract. Mandatory workplace regulations for certain industrial businesses under the Employment Act are a specific legal arrangement, not the same thing as every internal HR policy.
Termination and contract changes: plan the exit
After probation, the ordinary statutory notice periods for open-ended employment are one month in the first service year, two months from the second to the ninth, and three months from the tenth, effective at month-end (Article 335c CO). Different terms can be validly agreed within statutory and CEA limits.
Receipt of notice is what matters. A letter posted on the last day of the month may not arrive in time. Follow any contractual written-form requirement. Reasons for termination must be provided in writing if the other party requests them.
After probation, protected periods restrict termination by the employer, including in cases of illness, accident or pregnancy. For illness or accident without fault, Article 336c CO provides protection for thirty, ninety or 180 days depending on service. These are dismissal-protection periods, not sick-pay entitlements.
Immediate termination requires good cause. A contract cannot turn every mistake or late arrival into grounds for summary dismissal. A reduction in salary or workload requires a valid agreement or the appropriate legal process; an email announcing a new rule may not be sufficient.
A practical outline to complete before signing
Use this outline to prepare an ordinary employment contract. The examples above explain the decisions needed for each section.
| Section | Decisions to record |
|---|---|
| 1. Parties and applicable framework | Employer, employee and any CEA or standard contract |
| 2. Role and start date | Position, date, manager and job-description annex |
| 3. Duration and probation | Open-ended or fixed term, probation and exit provisions |
| 4. Time and place | Hours, employment percentage, schedule and remote working |
| 5. Salary | Gross amount, instalments, 13th salary and variable pay |
| 6. Additional hours | Recording, approval and compensation |
| 7. Holidays and absence | Entitlements, notification and evidence |
| 8. Insurance and expenses | Cover, premiums and reimbursement |
| 9. Confidentiality and rights | Information, tools and deliverables |
| 10. End of employment | Notice, return of property and employment reference |
| 11. Annexes and signatures | Versions supplied, agreement and copies |
Before signing, work through a normal month, a month with overtime, a sickness absence and a mid-year departure. If you cannot calculate the pay or explain the procedure in all four situations, the contract needs more clarity.
A useful contract must work from day one
A successful contract is one the employer and employee understand in the same way. Start with sector rules, calculate annual pay, express workload in hours and match the clauses to your actual operations. Finalise the annexes and give both parties the same signed set.
You do not need an accumulation of defensive clauses. You need an accurate, readable document consistent with payroll, working hours and business practice. That consistency prevents many everyday misunderstandings.
Frequently asked questions
Can an employee start work without a signed contract?
Yes. An ordinary contract can arise orally or through the parties’ conduct. Statutory duties apply despite the absence of a signature. The employer must also provide the written information required by Article 330b CO where its conditions apply.
Can probation last six months?
Not for an open-ended contract under the ordinary CO rules: the agreed period cannot exceed three months. A legally relevant interruption can extend it by the corresponding duration.
Does someone working 50% receive only two weeks’ holiday?
No. They keep the number of holiday weeks applicable to their employment. Holiday days or hours are calculated using their part-time schedule.
Is a 13th salary compulsory in Switzerland?
There is no general obligation in the CO. It is due where the contract, an applicable CEA or another valid basis provides for it. Distinguish a 13th salary from a gratuity.
Can staff policies change an employee’s salary?
A unilateral change to staff policies cannot reduce a contractually agreed salary. Internal procedures and essential contractual commitments must remain distinct.
Can a contract exclude all overtime payments?
A written variation of the payment rules in Article 321c CO is possible within applicable limits. It cannot remove mandatory protections for excess working hours under the Employment Act or override a CEA that prohibits the variation.
Sources and references
- Swiss Code of Obligations, SR 220: in particular Articles 13–16, 319–321d, 322d, 324a, 327a, 329a, 330b, 334–336c and 340–340c.
- SECO: entering into an employment contract (French).
- SECO: overtime (French).
- SECO: holidays (French).
- SECO: termination of employment (French).
- SECO: collective employment agreements (French).
Romain Prieur is a Swiss-qualified chartered accountant and founder of Entreprendre.ch. With more than ten years of experience in audit and supporting Swiss businesses, he advises entrepreneurs on company formation, accounting and taxation.
