The duty to pay remuneration is the duty of an employer to pay reward for the labour provided by an employee. Under Art. 322, Para. 1 of the ‘CoO’, an employer is required to pay the remuneration contractually agreed, or that which is determined by a normal contract of employment, or under a contract of employment governed by a ‘CLA’.
Types of remuneration
Time remuneration is dependent on the labour provided measured by periods of time. Time can be remunerated by the hour, day, month or year.
Piecework remuneration is calculated on the volume of the labour provided and is defined as a performance-linked remuneration. In regard to piecework remuneration, two statutory requirements are to be observed:
- Under Art. 326 of the ‘CoO’, an employer is under a duty to provide sufficient piecework. An employer can however pay on a time remuneration basis when the employer has no piecework to provide.
- Under Art. 326a of the ‘CoO’, an employer is to notify the employee of the piecework rate before the commencement of the individual work.
A premium is reward for special performance, e.g. work of particular- quality or quantity.
A gratuity is essentially not remuneration, but a form of special reward, which is rendered parallel to the basic remuneration on certain occasions (e.g. at Christmastime).
A commission is reward calculated on a percentual basis of the value of an item of business, which the employee has mediated or concluded.
Business results sharing
An employee receives a share in the business results (a share in the profits or the sales turnover). This form of remuneration is mainly rendered to executive employees.
The bonus is a new appearance in Swiss employment law, which is not yet regulated under the ‘CoO’. Dependent on the definition in concrete terms, a bonus can take the form of a gratuity or remuneration.
An employer is to deduct the following at source from the gross remuneration of an employee:
- the contributions of an employee to the Swiss State Old-Age Pension- and Invalidity Insurance Schemes (‘AHV/IV – Alters- und Hinterlassenenversicherung / Invalidenversicherung’), the Swiss State Maternity Insurance Scheme (‘Erwerbsersatzkasse’), the Swiss State Unemployment Insurance Scheme (‘Arbeitslosenversicherung’), Private and Corporate Occupational Pension Schemes (‘Berufliche Vorsorge) and the State Accident Insurance Scheme (‘Nichtberufsunfallversicherung’) where the employee shares in the total premium by a contribution to the personal accident risk outside of working hours).
- Retentions of remuneration pursuant to Art. 323a of the ‘CoO’;
- Agreed deductions, e.g. for canteen meals, etc..
Payment of remuneration under conditions of hindrances to the provision of the labour
In general, the legal principle exists of: no remuneration for no labour. The following exceptions should however be observed:
Acceptance of the labour of the employee
Under Art. 324 of the ‘CoO’, an employer is under a duty to remunerate when the labour of an employee is incapable of being rendered because of the fault of an employer, or when an employer is in arrears with the acceptance of the labour on other grounds. One example of acceptance arrears is the so called ‘Freistellung’ (Paid Leave of Absence).
Comp. the website: www.freistellung.ch
Inculpable hindrance of an employee to provide the labour pertains
Under Art. 324a of the ‘CoO’, an employer is under a duty to remunerate when an employee is hindered from providing the labour for involuntary reasons, such as sickness, accident, compliance with statutory duties, or the exercise of an official position, without culpability.
The provision of free time and paid vacation pursuant to Art. 329 et seq. of the ‘CoO’.
Under the statute law, an employer is essentially required to remunerate an employee at the end of each calendar month, unless another method is agreed under a normal contract of employment or under a contract of employment governed by a ‘CLA’ (comp. Art. 323, Para. 1 of the ‘CoO’).
The retention of remuneration
An employer can retain part of the remuneration when such is agreed, or when determined under a normal contract of employment or under a contract of employment governed by a ‘CLA’ (comp. Art. 323a, Para. 1 of the ‘CoO’). In regard to the amount of retention, reference can be made to Para. 2 of Art. 323a of the ‘CoO’. Such deductions from remuneration can be used for two different types of retention:
- as a security for a financial claim of an employer on an employee, or
- as a contractual penalty.
Infringement of the duty to pay remuneration
Should an employer fail to meet the duty to pay remuneration, an employee has the following redress:
- termination of a contract of employment (without a time period of notice, only in case of repeated infringements);
- refusal to accept the proffered labour;
- indemnities for loss or damage;
- enforcement of compliance before the court.