Material requirements: under Swiss law, an employment contract is a contract whereby the employee is obliged to perform work in the employer’s service for either a fixed or an indefinite period of time, and the employer is obliged to pay salary either based on time periods or based on the work performed. As compared to other contracts involving the rendering of personal services, the most distinctive feature of the employment contract is that the employee’s personal and organisational dependence reflects a relationship of legal subordination, i.e. the employee is not free to choose the time, place or type of work he or she will perform. By contrast, for example, contracts for legal services concluded between attorneys and their clients typically lack such legal subordination and, accordingly, do not qualify as employment contracts. Consequently, different statutory rules will apply.
Formal requirements: except for a few special agreements – such as the apprenticeship contract, the employment contract with a commercial traveler or the employment contract between a commercial staff supplier and an employee (which all require written form) – an employment contract is not subject to any specific form and may even be agreed verbally or by implication. Certain contractual provisions are, however, only valid if agreed in writing (e.g. restrictive covenants, exclusion of compensation for overtime, notice periods differing from statutory law, etc.).
The parties are free to enter into an unlimited or a fixed-term contract. The sequence of several fixed-term contracts between the same parties may, however, be regarded as circumvention of the employee’s protection against dismissal (if there is no objective reason for such sequence). In this case, the employment contract is considered to be unlimited.
During the trial period, either party may terminate the contract at any time by giving seven days’ notice; the trial period is, by statutory law, considered to be the first month of an employment relationship. However, if agreed in writing, the trial period may be extended to three months. Where the period that would normally constitute the probation period is interrupted by illness, accident or performance of a non-voluntary legal obligation, the probation period is extended accordingly. During the trial period, the statutory rules on termination at an inopportune juncture (pregnancy, illness, accident, military service, et al.) do not apply.
Ordinary termination: any employment contract concluded for an indefinite period of time may be unilaterally terminated by both employer and employee, subject to statutory notice periods ranging from one to three months, depending upon the length of service.
Extraordinary termination: both employers and employees have a right to terminate the employment contract immediately and without notice for cause, regardless of whether or not the contract was concluded for an indefinite period of time and regardless of any statutory notice periods, which would apply to an ordinary termination.