The Collective Labour Agreement for the Staffing Industry
An interesting piece of new legislation came in to affect at the end of last year in Switzerland. I thought I would take this opportunity to look at what the legislation is, who it affects and what are the possible benefits for those involved in the temporary staffing industry in Switzerland.
The Collective Labour Agreement for the Staffing Industry :
The Swiss staffing industry collective bargaining agreement was declared nationally binding by the Swiss government at the end of 2011. The new regulation came into force on 01 January 2012, however companies have a transition period of 3 months to be complaint with the new regulations.
Who does this affect?
The new collective bargaining agreement covers 300,000 agency temporary workers and affects companies in the temporary employment sector with an annual turnover of more than 1.2 million CHF.
Temporary workers who earn less than 126,000 CHF( insured salary according to SUVA a year) are also be affected.
Temporary employees on a minimum wage are affected as staffing agencies will have to pay minimum hourly wages of between 16.46 CHF and 23.59 CHF depending on qualifications.
What is it?
In a nut shell the temporary staffing industry has now for the first time a standard and comprehensive set of regulations applying to all temporary positions.
Why is it important?
It is important as it creates a clear and simple framework for the temporary staffing Industry.
There are benefits for all parties who are involved:
Subsidized further education.
An improved retirement plan.
Improved loss of earning protection sick pay.
Branch specific minimal salary
The User of Temporary Workers:
Flexibility for short term project work coupled with social security for long term projects
Qualified temporarily personnel with more education possibilities
It is line with other industry regulations.
Improvement in reputation
The Personal Agency:
Simpler accounting procedures.
Uniform regulations and frame work for all.
Reputation improvement for all
Agencies have a say in the regulation of the industry
What are the main Points which are covered by the new agreement?
Up to the Age of 20 and from the age of 50 Holiday entitlement is 5 weeks. For all other employees 4 weeks.
The holiday pay is only paid out if holidays are taken or if the employment relationship is terminated permanently.
Overtime, night work, work on Sundays and public holidays
Weekly work time is 42 hours. From the 46th - 50th hour an additional 25% will be paid. Sunday work and Bank holiday work is to be paid at 50%.
GAV enforcement cost contribution
The personal service provider is obliged to deduct an enforcement and training contribution amounting to 0.7 % of the salary. An amount of 0.3% is to be paid by employer. This 1 % contribution will be forwarded to the "Vollzug, Weiterbildung und Sozialfond" association in full and pays for subvention of further education, GAV Administration and helps to support the reduction in costs of daily sickness insurance .
Daily sickness benefits insurance
The personal service provider must provide daily sickness benefit insurance.
The entitlement to benefits starts from the commencement of work. From an incapacity to work of at least 25 %, 80 % of the average salary (up to a salary of CHF 126,000) will be paid as an insurance benefit after an elimination period of two days. There is an entitlement to monetary benefits for a maximum of 720 days within 900 days.
In addition, paid leave (e.g. weddings, death of a close relative) will be compensated by the company in accordance with the provisions of the GAV.
The employee have after the trail period a claim for salary during Military or Civil Service, which is 80% of the salary for maximal 4 weeks or after 2 years 80% of the salary according to the Berner Skala.
Winners and losers
So on the face of it the agreement looks great and is sure to help to stamp out wage dumping and other problems not covered by the accompanying measures associated with the free movement of people agreement between Switzerland and the European Union.
However where there are winners there are also losers. Enforced new taxes are never liked especially when they do not apply to everyone. Contractors who earn more than 126k a year are not liable for the collective agreement and therefore do not have to pay the tax. In addition although the tax goes partly to pay for support of further education a few contractors have mentioned that they prefer the freedom of choice to invest in training themselves.
One contractor in his early 50s mentioned recently that the competition from younger contractors was becoming more and more tough. He was anxious that the 5th week's holiday in addition to the already higher pension costs he has due to his age will push up his total costs and make him less interesting for perspective employees for new projects.
Not all companies need to implement the GAV. Small agencies with a salary sum under 1.2 million yearly do not have to comply to the GAV regulations. In the short term this may be positive for them as they do not have extra work of having to meet with all the GAV demands. However surely in the long term candidates will prefer to with GAV compliant firms as they are guaranteed the protection and advantages that the agreement brings.
All in all I think the new collective agreement is very good news for the temporary recruitment industry. However if I could choose I would have treated everybody in the same way.
I would include all salary ranges within the GAV as I am sure that people who earn more than 126K would appreciated the benefits and security the new regulations bring. Also I would give all workers regardless age the same number of Holidays to make sure that particularly older workers are not at a disadvantage to their younger colleagues. Finally I believe it would be fairer if all companies were subject to the agreement as this would remove any inconsistencies or grey areas between employers.
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