Does company practice exist in Switzerland?

Unlike in Germany, there are no legal provisions regarding this in Switzerland. Nevertheless, based on the principles of good faith and repeated conduct, implicit claims or obligations may arise, although under different conditions than in Germany. HR professionals should observe the following factors:

• What is stated in the employer’s handbook?
• Is there a collective labour agreement (CLA) or a standard employment contract (SEC)?
• What is regulated in the individual employment contract or in the personnel regulations?
• What do the legal provisions in the Swiss Code of Obligations (CO) and the Labour Act (EmpA) state?

It is advisable to record a reservation of voluntariness explicitly and unambiguously in writing. It should be made clear that the benefit granted is voluntary and does not imply recognition of a legal entitlement. In case of further uncertainties, it is advisable to seek legal assistance.

What qualifies as company practice?

The decisive factors are regularity, how many employees receive additional benefits, and whether these benefits are granted solely and unconditionally by the employer. The following are three common examples that are typically regarded as company practice:

• Christmas bonus: If an extra bonus is paid punctually every year at Christmas, this quickly becomes established as a company practice. The same applies to holiday bonuses.
• Flexible working hours: If the company allows employees to organise their working hours flexibly, this can also be regarded as company practice.
• Extra vacation days: If employers grant additional vacation days not stipulated in the employment contract, this too may fall under company practice.

Can claims from company practice be reversed?

Benefits that have become company practice cannot be abolished unilaterally without agreement – because company practices are equivalent to contractual provisions. As an employment contract cannot be changed unilaterally, a mutual agreement is required – or termination. Another alternative is termination with offer of reemployment under amended terms: this means all contracts are terminated and reissued with new conditions. However, this approach is not recommended, as it harms employee retention and reduces employer attractiveness.

Employers can, however, prevent company practice by, for example, including a so-called reservation of voluntariness in employment contracts or by not granting a benefit regularly. However, one must carefully weigh whether this approach might lead to excessive dissatisfaction among employees.

Company practice – an attractive bonus for employees

At first glance, company practice may sound like dry legal terminology, but employers should know how to handle it and whether they want to integrate it into their corporate culture – for instance, to create motivational incentives. Since benefits typically turn into a continuation entitlement after three years, company practices can also present a challenge. Decision-makers should therefore examine carefully whether such benefits can be sustainably resourced.