Salary Payments in Euro

After the Swiss National Bank's decision of last January, particularly Employers producing their goods in Switzerland but exporting them to the EU seriously struggle with the strong Swiss Franc. In order to be more cost effective, they are considering how to reduce personnel costs. The question arises whether they are allowed to pay the employees' salaries - at least partially - in euro instead of Swiss francs. Under Swiss law, it is prohibited to pass the operational business risk to the employees and therefore each case must be analysed in detail. In case of the conclusion of a new employment contract, it is unproblematic to agree on a salary in euros. However, once a salary in Swiss francs is agreed upon, the employer may not unilaterally deteriorate the employment contract without issuing a notice of termination. This applies even if only the cross-boarder commuters with lower living expenses would be concerned. In case the employer decides to issue notices of termination with the option to conclude new contracts (Änderungskündigungen), he has to consider whether the threshold of a mass dismissal is reached and would then have to conduct a previous consultation proceeding. In order to avoid such proceeding, the employer may just issue offers for the conclusion of new employment contracts. However, if an employee then rejects such offer and is thereafter terminated, there is a high risk such termination would be qualified as abusive and the employer would have to pay an indemnity of up to six months net salaries.

Handelszeitung, Nr. 8, February 2015 (PDF, 206 Kb)

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