SWITZERLAND Law and Practice Contributed by: Philippe Nordmann, Irène Suter-Sieber, Jonas Knechtli and Gustaf Heintz, Walder Wyss
Bonus The term “bonus” is not defined by Swiss law. Accord - ingly, established case law provides that, depending on the specific (bonus) agreement and the pertinent company practice, a bonus can be qualified either as a salary component or as a gratification (or as one remuneration element consisting of two independent parts). Legal qualification as salary component or gratification A bonus qualifies as a salary component if the pay - ment of the bonus and its amount are not subject to the employer’s discretion. This is also the case if the exact bonus amount is clearly determinable inde - pendent of any subjective assessment. A bonus qualifies as a gratification, however, if it is a voluntary extra compensation, meaning that the enti - tlement per se or at least the exact amount of the bonus is ultimately at the employer’s discretion. In addition, if an employee’s total compensation is below the five-fold Swiss median salary in the private sector (approximately CHF390,600 in 2022), Swiss law requires that the bonus is only of an accessory nature in order to potentially qualify as a gratification. The bonus is of an accessory nature if it is of second - ary importance in relation to the employee’s salary; as a rule of thumb, the bonus may not exceed 100% of the salary in order to remain accessory. In the absence of such accessoriness, at least part of the bonus qual - ifies as a salary component. Consequences of such legal qualification The respective legal qualification (salary component v gratification) is of great importance: to the extent that the bonus qualifies as a salary component, it may not be declared subject to conditions (such as an ongoing/not yet terminated employment, vesting, forfeiture, etc) and the employee has a mandatory (pro rata) claim. The exact opposite is true for bonuses that qualify as entirely voluntary gratifications. In the case of gratifications to which the employee is entitled in principle, they have a mandatory claim to part of the bonus (which may not be determined arbitrarily).
office staff, technical and other employees, including sales personnel in large retail trade companies, such mandatory compensation for extra hours only applies from the 60th extra hour per calendar year. 1.4 Compensation Minimum and Maximum Compensation As a matter of principle, the parties are free to agree on the employee’s compensation, although there are deviations from this principle. The most practically relevant minimum compensation requirements are as follows. • Selected cantons provide for a general hourly mini - mum salary (Geneva, Jura, Neuchâtel, Ticino and Basel-Stadt). • In June 2023, two communities (Winterthur and Zurich) voted in favour of a communal hourly mini - mum salary; however, the respective provisions are not yet in force due to pending legal proceedings. • Various collective bargaining agreements (CBAs) and so-called standard employment contracts (ie, a special kind of legislative decree) provide for minimum salaries in selected sectors. The most practically relevant compensation cap is for Swiss stock corporations whose shares are listed on a stock exchange. They are subject to certain restric - tions with regard to the compensation paid to mem - bers of the board of directors, the executive board and the advisory board, as well as to persons close to them (eg, the prohibition of severance payments contractually agreed or provided for in the company’s articles of association). Thirteenth Monthly Salary The parties are free to agree that the salary shall be paid in 13 instead of 12 monthly instalments. In the absence of a different agreement, such 13th monthly salary shall become due at the end of the year. Due to its legal nature as a salary component, the payment of the 13th monthly salary may not be declared subject to conditions, and it must be paid on a pro rata basis if the employment ends before its due date.
634 CHAMBERS.COM
Powered by FlippingBook