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Collective Bargaining

The dominant level of negotiations is the sector or branch. Besides the major branch agreements there are also numerous collective agreements with individual firms. Collective agreements can be declared generally binding by the federal government (or, in the case of regional agreements, by cantonal governments). The significance of generally binding agreements has increased considerably in recent years. This is a major reason for the higher proportion of workers who are covered by collective agreements.1



The legal framework for collective labour law is to be found in the Swiss ‘Code of Obligations’, Art. 356 to 362.


Collective agreements can be declared generally binding by the Federal government (or, in the case of regional agreements, by cantonal governments) at the request of the negotiating partners and then apply automatically to all companies in the sector. Most notably, the collective agreements in the building sector and in trades and services (Gewerbe), including hotels and catering, are generally binding. This is not widespread in the industry sector.


There is no national legal minimum wage in Switzerland. However, the conclusion of the bilateral agreement on the free movement of persons between the EU and Switzerland enabled the authorities to introduce binding, branch-wide minimum wages where wage dumping was clearly taking place in branches without a generally binding collective agreement.


In 2011, the Swiss Federation of Trade Unions (SGB) obtained 112,000 signatures for a people's initiative to introduce a national minimum wage. This initiative was filed in February 2012. Thus, there is likely to be a referendum in 2014 on introducing the minimum wage.


Who Negotiates and When?


On the employers’ side, as a rule the branch employers’ associations negotiate, while on the employees’ side this is done by one or more branch trade unions.


In some branches the traditional separation of salaried employees and workers is maintained and there are separate collective negotiations for these groups of employees. In others, such as the metal and engineering industries, there is only one collective agreement for all employee groups.


As a rule, collective agreements are concluded for from two to five years. In the meantime, there are annual wage negotiations in the autumn, at which the wage increase for the beginning of the following year and possibly other wage components are negotiated. In exceptional cases, wage agreements for more than one year are concluded.


One peculiarity of the Swiss system is that the annual wage negotiations with regard to some important collective agreements, namely the machine, electrical and metal industry and the chemical and pharmaceutical industry take place decentrally at the enterprise level. The negotiating partners are the staff representatives and the employers of individual companies. Trade union representatives are called in only in case of conflict. Until 2013 these collective agreements therefore did not include pay rates.


But this model is likely soon to be history. In the largest industrial sector, the machine, electrical and metal industry, there has been a collective agreement for 75 years, which since first being concluded and despite numerous revisions and improvements, has never contained standard or minimum wage rates. For many years, the trade unions have been demanding that pay provisions be included in these agreements. In 2013 a historic breakthrough was achieved. The parties agreed on minimum pay rates, which vary according to qualifications and regions.


At works level, it will continue to be possible for workers’ representatives and employers to negotiate on increases in employee earnings. But these works-level agreements will gradually lose their significance, given the pay rates negotiated at the national level by the parties to the agreement.


Subject Matter of Negotiations


As far as their contents are concerned, the collective agreements also include, besides working conditions proper, such as wages, working time and so on, items such as additional pension fund regulations, early retirement, conflict resolution procedures, joint social funds, funding of training and further training, joint bodies for implementation and control, participation rights, financial participation, procedures related to collective redundancies and takeovers and so on.


The subject matter of the annual wage negotiations is the increase of individual real wages and – where applicable – the increase of the wages laid down in the agreement, which are usually defined as minimum wages. In practice, there is a wide range of options for increasing real wages, which can also be combined: these include a general, percentage or amount-related increase for all employees; a differentiated increase in accordance with wage scales; and an increase in the wage bill, which is then distributed individually in the enterprise.

Hans Baumann (2014) for worker-participation.eu