Collective labour agreements (CLA)

The collective labour agreement (CLA) is an agreement between employers’ organisations and trade unions that sets minimum working conditions for a sector or a company. Anyone hiring in Switzerland must know whether they are covered by a CLA, because in that case its rules prevail over what the individual employment contract can freely establish. Ignoring it is one of the most costly mistakes in staffing matters.

What a CLA governs

A CLA defines minimum conditions that the employer cannot worsen. It typically regulates:

• minimum wages by category and, often, periodic adjustments;
• working hours, overtime and the related supplements;
• holidays and days of leave;
• the thirteenth salary and other allowances;
• notice periods for termination and protection of the employment relationship;
• contributions to joint funds (training, early retirement in some sectors);
• sometimes sick pay and other coverages.

The logic is to raise the minimum level of protection: the individual contract may provide better conditions, never worse than those of the applicable CLA.

Company CLA and generally binding CLA

The fundamental distinction is between two types of CLA:

• “ordinary” company or sector CLA: it binds the employers affiliated to the signatory associations and the workers who are members of the signatory unions. If you are not a member of the association, in principle you are not automatically bound.
• generally binding CLA (declared as such by the authority): it applies to all employers and workers of the sector and geographical area indicated, regardless of affiliation. Here there is no choice: if you fall within the scope, the CLA applies to you.

Many sectors with a strong labour presence have generally binding CLAs: construction, cleaning, catering and hospitality, some industrial and retail segments. Checking membership is the first step before drafting any contract.

How to understand if you are covered

To establish whether a generally binding CLA concerns you, three elements must be cross-checked:

1. the actual activity of the company (the criterion looks at what you do, not at what you call yourself);
2. the place where you operate (some CLAs are cantonal or regional);
3. the function of the individual employees (some categories, such as managerial staff, may be excluded).

A company may have part of its staff covered and part not, or apply several CLAs to different branches. This is an analysis to be done case by case, because an incorrect classification translates into wages below the minimum and arrears to be paid.

What the employer who does not apply it risks

If a generally binding CLA is applicable and the employer does not comply with it, the consequences are concrete:

• wage arrears towards employees, for the difference from the minimums;
• contributions owed to the joint funds;
• inspections by the sector’s joint committees, with powers of verification over wages and conditions;
• possible penalties and inspection costs.

The joint committees actively supervise several sectors: it is not a theoretical risk. Regularising after the fact is always more onerous than starting with the correct classification.

Practical impact on payroll and contracts

When a CLA is applicable, it directly affects:

• the wage structure (minimums by category, increments, thirteenth salary);
• the calculation of holidays and hours on the payslip;
• any deductions for joint funds;
• the clauses of the individual contract, which must be aligned to the CLA.

The individual contract and the payroll calculation must “speak the same language” as the CLA. This is where payroll management that is aware of the collective agreement makes the difference.

How we help you

The People division of SIH ONE checks liability to CLAs, aligns contracts and payslips to the sector minimums and manages relations with the funds and the joint funds. Talk to the People division.