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In Switzerland, a distinction is made between the different employment contracts described below: individual employment contracts, collective employment agreements, standard employment contracts.
Individual employment contracts regulate the rights and obligations of employers and employees. They are not subject to any formal requirements and may – with the exception of apprenticeship contracts – also be the result of a verbal agreement. It is, however, in the interest of both parties to draw up a contract in writing. Special regulations, such as prohibition of competition or overtime rules, must be set in a written employment contract. A distinction is made between fixed-term (the contract ends on the date set at the outset) and open-ended (the contract ends by notice of termination) employment contracts.
Collective employment agreements are concluded between employers’ and employees’ associations. In these agreements, the social partners define the minimum requirements (e.g. minimum wage), which may not be undercut in individual employment contracts. A distinction is made between generally binding (sector-specific) agreements and non-generally binding agreements (only for trade association members).
Standard employment contracts are federal or cantonal enactments. They regulate working conditions with provisions on working hours, vacation, notice periods, etc. The cantons must enact the standard employment contracts for working conditions in agriculture and housekeeping. The provisions of the standard employment contract apply directly to the working conditions subject to the standard employment contract, provided nothing different has been agreed in the individual employment contract. In the event of repeated and improper undercutting of wages in sectors where there are no generally binding collective employment agreements, the competent authorities can enact fixed-term standard contracts with binding minimum wages.