SWITZERLAND Law and Practice Contributed by: Beda Kaufmann, Alexander von Jeinsen, Daniel Raun and Laurent Riedweg, Advestra
10.3 Employment Protection A share deal does not affect the employment agree - ments, as the identity of the employer remains the same and no employee rights are triggered under statutory law by the transaction. In a transfer of a business or part of a business, as is often the case in asset deals, the employment agree - ments for all employees engaged in the business are automatically transferred by operation of law. This also applies to transactions governed by the Merger Act (see 3.1 Transaction Structures ). Employees can object to the transfer, which results in termination of the employment relationship after expiry of the statu - tory notice period. Employees (or the works council, if any) must be informed about the reasons for the transfer and its legal, economic and social implica - tions for the employees. If measures that might affect employees are consid - ered (eg, dismissals or a change in the terms and conditions of employment agreements), a consul - tation procedure applies. The law does not provide for specific sanctions for failing to inform or consult in asset deals. However, in transactions that require a filing with the commercial register (eg, a statutory merger or a transfer of assets under the Merger Act), employees may take legal action before the court to block the entry of the transaction in the commercial register. Where an asset deal does not pertain to a transfer of a business or part of a business, the employment relationships do not transfer by operation of law and the consent of each individual employee to be trans - ferred is required. 11. Intellectual Property and Data Protection 11.1 Intellectual Property Considerations for Approval of FDI Under the current regime where FDI controls only apply in certain sectors (mainly the financial and residential real estate sectors), IP is generally not an important aspect for approval of FDI. However, under the FDI control regime proposed under the draft FICA
In general, collective bargaining, works council or labour union arrangements are less common in Swit - zerland than in other jurisdictions. Only some indus - tries (eg, construction, hotels/restaurants) are sub - ject to mandatory collective bargaining agreements – some of which apply to the entire territory of Swit - zerland, whereas others apply in certain cantons only. 10.2 Employee Compensation Salary, Bonus and Equity Participation Employees are usually paid a monthly salary in cash. A statutory minimum salary exists in a few cantons but not at federal level, except for in industries where collective bargaining agreements apply. It is quite common for Swiss companies to pay varia - ble compensations or bonuses, which can be contrac - tually due or fully discretionary. Equity compensation (be it virtual or not) is most common for the manage - ment of larger or listed companies or start-ups. For companies listed at a Swiss stock exchange, the maximum compensation for members of the com - pany’s board of directors and management is subject to shareholder approval. Certain kinds of remunera - tion (severance pay, advance payments, transaction bonuses) are only permissible in limited circumstanc - es or not at all. Employee compensation is generally not implicated by a transaction, except for customary acceleration provision in equity participation (including phantom stock) plans. In the context of a transaction, key employees are often offered higher compensation, retention bonuses or even equity-related compensa - tion or (re)investment opportunities. Social Security Contributions Social security contributions are payable to the state social security institution (covering old age, disability and compensation for military duty and motherhood) by all employees who are employed and working in Switzerland. Employers have to maintain minimum pension benefits in occupational pension benefits schemes in Switzerland. It is possible to maintain additional non-mandatory benefits.
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