Employment contract

Employment law governs the legal relationships between employers and employees and is a complex legal field that encompasses many different aspects. Here you will find a short overview of topics that can be regulated in employment contracts.

For further reading please refer to the section dedicated to employment law.

Scope of employment contracts

The employee makes his labour available to the employer and the employer pays the employee’s wages.


Distinguishing from other contracts

The employee is integrated into the employer’s organisation and the employer provides the employee with the work equipment.

The employment contract is thus to be distinguished from other contracts for work performance such as the simple mandate and the contract for work.

The contractor of a simple mandate fulfils the the contract independently with his own means, at the place and times chosen by him.

The contractor in a contract for work and labour not only performs the work, but often also supplies the material. The contractor owes a certain result, namely the delivery of the agreed work.


Form of the employment contract

In principle, employment contracts do not require any form and are therefore also concluded verbally or by implication. Collective labour agreements may provide for the written form.


Duration

Fixed-term employment contracts are concluded for a specific duration. They end at the end of the agreed term. If they are continued beyond this point, they are deemed to be indefinite.

Permanent employment contracts are concluded for an indefinite period. They end when the employee is dismissed, dies or reaches retirement age.

Employment contracts can be concluded with a minimum duration. They cannot be terminated during the minimum term.


Probationary Period

Unless otherwise agreed in the employment contract, the first month of the employment relationship is the probationary period. The probationary period may last a maximum of three months. The notice period during the probationary period is seven days, unless otherwise agreed.


Salary

Employees are entitled to payment of the agreed wage. The salary and other remuneration (premiums, bonus, share of the business etc.) are a matter of agreement between employer and employee.

A supplement is owed for overtime unless otherwise agreed in the employment contract. Overtime work in excess of the maximum permitted working hours is regulated by law.


Reference letter

Employees are entitled to a reference at the end of the employment relationship. They can request an interim reference at any time. As an alternative to a reference, employees can request a confirmation of employment.


Holidays and days off

Employees are entitled to at least four weeks’ holiday per year. The employment contract may provide for a higher entitlement.

Employees are entitled to one day off per week. In most employment relationships, two days off per week are agreed.

The employee must be granted days or hours off for certain occasions (own wedding, relocation, etc.). Collective labour agreements may contain provisions in this regard.


Maternity and paternity

The law provides for maternity leave of 14 weeks and paternity leave of two weeks. The employment contract may deviate from this regulation and grant further leave.


Illness and accident

In the event of illness or accident, employees are entitled to continued payment of wages. Unless otherwise agreed, employees’ claims are governed by law. Agreements that deviate from the law must be equivalent.


Termination

Fixed-term employment contracts end without notice at the end of the agreed term. The duration and termination are agreed in the employment contract.

Open-ended employment contracts must be terminated. The notice period is based on the agreement in the employment contract, whereby the legal requirements for the minimum notice period must be observed.

Unless otherwise agreed in the employment contract, employment contracts can be terminated without any formal requirements. However, written form is recommended for evidentiary reasons. The form of the notice of termination and the method of delivery can be agreed in the employment contract.



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