Should you be watching Swiss law and Swiss business practice? Of quartz you should!
Under Swiss law, it is forbidden to limit an employee’s (e.g. your placement on assignment) freedom of employment choice. This means you cannot integrate into agreements any restrictive clauses denying this “freedom”. The law states: ‘If the assignment lasted less than three months and the assigned employee (your placement) directly or indirectly joins the client less than three months after the end of the assignment, the client shall remunerate the supplier (you, the recruiter) with due compensation. Such remuneration shall correspond to the maximum rate according to Article 22 Paragraphs 2-4 of the Arbeitsvermittlungsgetz’.
In practice, the commonly-accepted, maximum compensation is currently equivalent to the first three months’ commission fee you could have expected to receive. Written law, however, is subject to local canton interpretation and covers some very grey areas.
The actual risk to successful Swiss business is primarily driven by loyalty from your client to you. Engendering this loyalty can be thwarted by key influences outside the control of you and your appointed, locally-registered, Swiss employment service provider (SESP).
Mike Phillips, marketing director of ItsInternational, said, “Maintaining a close business relationship with your Swiss clients makes it easier for you to spot and deal with early warning signs of dissatisfaction or change in that relationship. Bear in mind many Swiss clients are heavily dependent on the expertise of foreign-based recruiters because the talent pool is relatively small. This alone should deter them from the temptation of short-term financial gain (i.e. cutting out the recruiter’s commission) at the expense of sacrificing relations with a valuable supplier of talent. Also note any SESP with integrity is always willing to issue you a non-poaching agreement before acting on your behalf. That same SESP will be very keen to prove to your satisfaction it is neither a recruiter nor closely aligned to a recruiting entity – for example, a sister company providing recruitment services. Working with an SESP in a vendor-neutral position is clearly your best safeguard.”
“Any recruiter failing to appoint a fully-compliant solution for supplying contractors or permanent placements into Switzerland is failing to protect its Swiss client from attacks by the Swiss authorities. The best outcome for that recruiter from a successful attack is suffering a loss of reputation and seeing further business evaporate from at least one client. At worst, that recruiter is fully exposed to the Swiss authorities with potential spin-off interest from authorities in their home country.”
To help mitigate commercial and statutory risk, Phillips recommends you ask your “Business Saviour” (the individual or team in your business responsible for Placement Compliance & Contracts) to consider the following when next reviewing immigration and tax protocols for your current and future placements in Switzerland.
As employee rights under Swiss law continue to expand and mirror EU law, ensure integrity and compliance willingness are the prime drivers when selecting or reviewing your SESP.
Be increasingly vigilant regarding work permits and the exact relationship existing between you and your SESP, especially when possible sub-contracting scenarios arise.
Be aware of Swiss labour and tax laws because ‘ignorance is no defence’ should you become embroiled in an official investigation.Fines for infringing Swiss employment and/or placement laws range from CHF 30,000 (circa £20,000 or €28,000) to CHF 100,000 (circa £66,000 or €92,000) per violation.These can be applied not only to the offending SESP but also to your client and the individual manager(s) involved.Although prison sentences are rare, client managers contravening the regulations have been detained during investigations.Please also note Swiss law allows sanctions against foreign-based recruiters.
Swiss law forbids recruiters from placing a contractor directly with a labour leasing company.A vendor-neutral and fully-licensed SESP must be used to receive your placement into Switzerland before he or she can be employed by the labour leasing entity to carry out the assignment.