When formulating the employment contract, however, it should always be borne in mind that what is agreed in writing is only legally valid if it does not contradict mandatory regulations (e.g. law, collective or standard employment contracts).
What information should be included in a written employment contract? This question can be answered by consulting the law. According to this, the following minimum information should be included in an employment contract
- Name of employer and employee
- Date of commencement of the employment relationship
- Function of the employee
- Salary and any wage supplements
- Weekly working hours (if agreed at all)
Compensation not always lawful
According to the law, employees must be paid the full amount of their wages for holidays (including compensation for lost wages in kind, if applicable). In practice, however, paid holidays are often not granted in the case of hourly wages, but the entitlement to holidays is deemed to be compensated by means of a holiday supplement. However, this is contrary to the general prohibition of compensation for holidays stipulated by law. According to the (still) applicable case law, holiday pay in the form of a holiday supplement is therefore only permissible for very short or very irregular working hours.
And even if compensation in the form of a holiday allowance is permissible, it must be stated separately both in the employment contract and on every payslip. Formulations such as "hourly wage including holidays" or similar are therefore inadequate.
Clearly state compensation
If holidays are compensated by means of a supplement even though the requirement of very short or irregular work is not met, or if supplements are insufficiently stated in the employment contract or on the individual payslips, there is a risk, particularly after the employment relationship has ended, that the former employee will take the position that no paid holidays were taken during the employment relationship and that the outstanding holiday balance should therefore be paid out.
In these cases, the employer is in a bad position: on the one hand, a breach of the prohibition of payment in lieu is generally not protected by the court; on the other hand, if the holiday allowance is not sufficiently stated in the employment contract and/or on the payslips, the employer is likely to fail to prove that payment of the holiday allowance was validly agreed or that payment was actually made in lieu. The employer is threatened with having to pay the holiday for the previous years a second time.
However, it should also be noted that employees are still entitled to actually take their holidays, i.e. to be released from their work duties, even if holiday pay in the form of a wage supplement is validly paid.
The following holiday supplements are to be granted on the hourly wage:
- 4 weeks holiday + 8.33 per cent
- 5 weeks holiday + 10.63 per cent
- 6 weeks holiday + 13.04 per cent
PRACTICAL EXAMPLE
The law student who sporadically carries out legal research for his neighbour's company: due to irregular assignments, compensation for holidays in the form of a wage supplement appears to be justifiable under the current case law. The intern, who is gaining her first professional experience for an average of eight hours every weekday for six months (subject to holiday entitlement): The assignment is neither irregular nor very short. The intern must be granted paid holidays. Compensation in the form of bonuses is not advisable. The cleaner who cleans the offices of a company in Zurich for two hours every Tuesday and Wednesday: The assignment is regular, but the wage supplement is expressly permitted in view of the part-time workload in accordance with the cantonal standard employment contract.
Exception: Housekeeping
For cleaning staff in private households (not to be confused with cleaning staff employed in the cleaning industry), the federal standard employment contract for domestic workers ("NAV Hauswirtschaft") and, for example in the canton of Zurich, the standard employment contract for domestic workers must also be taken into account. Among other things, the federal standard employment contract for housekeeping employees stipulates a minimum wage for cleaning employees who work an average of five or more hours for the same employer.
Contrary to the general ban on compensation for part-time employees, the cantonal standard employment contract for domestic workers expressly states that compensation for holiday entitlement in the form of a holiday supplement is permissible. A written agreement and the separate listing of the supplement in the employment contract are expressly stated as prerequisites for compensation by means of a supplement. In the case of full-time employment, however, holiday pay in cash is also excluded.
Preliminary clarification important
To summarise, holiday pay must be shown separately in the employment contract and on every payslip. However, holiday compensation is only permitted if specific conditions are met. Otherwise, there is a risk that holidays will have to be compensated twice. It is therefore worth having the individual circumstances and employment contracts checked by a specialist in good time. This is because unlawful agreements can often be expensive in retrospect.