Employment contract? Work contract? Mandates?
Do you constantly ask yourself: what are the differences and which contract suits my needs?
Employment contract
An employment contract (subject to the legal stipulations of Art. 319 to 343 of the Code of Obligations) is a contract under which the employee provides a service for a specific time period (permanent or temporary) for a salary and the employee is dependent on the employer. This is particularly the case if the person is part of the employer’s organisation of work and takes orders from the employer: the employer decides when, where and how the employee’s service is to be provided.
Example: Typical employment contracts cover employment in an orchestra or ensemble or in an educational institution etc.
Work contract
A work contract (subject to the legal provisions of Art. 363 to 379 of the Code of Obligations) is a contract whereby the contractor commits to achieving a result, rather than just providing labour. The ‘result’ is the provision of a concrete outcome e.g. a composition, choreography, a text for an artist’s biography or a performance. The contractor does not form part of the customer’s organisation of work. The same social security and tax arrangements apply to the contractor as apply to the self-employed.
Mandates
In the case of a simple mandate (subject to the legal provisions of Art. 394 to 406 of the Code of Obligations), the mandatee commits to carrying out an activity. The difference to an employment contract is that the mandatee does not form part of the organisation of work of the mandator. The same social security and tax arrangements apply to the mandatee as apply to the self-employed.
Quick overview of the differences
Arbeitsvertrag
|
Employment contract Art. 319 et seq. Code of Obligations |
Work contract |
Mandate |
|
| Compensation | Salary under Art. 322 et seq. Code of Obligations | Payment under Art. 372 et seq. Code of Obligations | Fee, which must always be agreed, as the assumption in principle is that the service will be provided free of charge: A mandate without an agreed fee is considered voluntary work. Therefore, a concrete fee must be fixed in the contract. |
| Holiday / public holidays | Right to paid holiday under Art. 329a et seq. Code of Obligations | No right to paid holidays or days off on public holidays | No right to paid holidays or days off on public holidays |
| Continuation of salary payment in case of illness, accident, military service, pregnancy, maternity and paternity | Legal requirement to continue paying wages under Art.324a and 324b Code of Obligations | No right to payment, contractor must provide their own insurance at their own expense | No right to payment, contractor must provide their own insurance at their own expense |
| Absences due to doctor’s visits, moving house, illness of a close relative | The employer must provide time under Art. 329 paragraph 3 of the Code of Obligations; salary depends on contract | No right to payment for absence | No right to payment for absence |
| Expenses | Expenses must be paid separately by the employer, fixed expenses fees are possible | Pay for expenses should be agreed separately. Otherwise, the assumption is that expenses are included in the payment | Pay for expenses should be agreed separately. Otherwise, the assumption is that expenses are included in the fee |
| Notice period | After the end of the notice period in the first year of employment, at least 1 month. From the 2nd to the 9th year of employment at least 2 months, then at least 3 months (Art. 335a et seq. Code of Obligations) | Withdrawal at any time by the customer, if the cost estimate is exceeded by a disproportionate amount (Art. 375 Code of Obligations) and withdrawal at any time by the customer in exchange for indemnification (Art. 377 Code of Obligations) | Mandate can be cancelled or terminated at any time (Art. 404 OR). Damages are due if the cancellation or termination does not come ‘in time’ |
| Job security | Temporary job security under Art. 336c of the Code of Obligations in case of unjustifiable termination of the contract | No job security, but see also ‘Notice period’. Also right to damages if completion is not possible due to a failure of the client (Art. 378 paragraph 2 Code of Obligations) | No job security, but right to damages if termination not provided in time under Art. 404 paragraph 2 Code of Obligations |
| Death | After the death of the employee, the employer is required to pay the surviving relatives at least one month’s salary. After 5 years’ employment, at least 2 months’ salary (Art. 338 Abs. 2 Code of Obligations) | After the death of the contractor, the customer is required to accept and pay for the parts of the work already carried out, as long as these are usable (Art. 379 Abs. 2 Code of Obligations) | No right to payment of fees after the day of death |
| 1st pillar: Old Age and Survivors’ Insurance / Invalidity Insurance / Loss of Earnings Compensation | Employer must registered the employee with the Old Age and Survivors’ Insurance Office and pay contributions | Self-employed persons must register themselves and contribute 9.65% of their income (Old Age and Survivors’ Insurance: 7.8% / Invalidity Insurance: 1.4% / Loss of Earnings Compensation: 0.45%). For annual incomes of under CHF 56,900, a degressive scale of contributions applies | Self-employed persons must register themselves and contribute 9.65% of their income (Old Age and Survivors’ Insurance: 7.8% / Invalidity Insurance: 1.4% / Loss of Earnings Compensation: 0.45%). For annual incomes of under CHF 56,900, a degressive scale of contributions applies |
| 2nd pillar: BVG/LPP | Employer must register the employee with a pension fund from the age of 24 and pay contributions | Under Art. 3 BVG/LPP, the self-employed are not part of BVG/LPP as a general rule. However, under Art. 4 BVG/LPP, they can voluntarily join a pension fund | Under Art. 3 BVG/LPP, the self-employed are not part of BVG/LPP as a general rule. However, under Art. 4 BVG/LPP, they can voluntarily join a pension fund |
| 3rd pillar: private provision | Optional for all employees. | Optional. All the more important for those who do not choose to join BVG/LPP. | Optional. All the more important for those who do not choose to join BVG/LPP. |
| Unemployment insurance | Employees are registered with unemployment insurance by their employer. Half of the contribution is paid by the employee and half by the employer | The self-employed cannot insurance themselves against unemployment | The self-employed cannot insurance themselves against unemployment |
| Occupational accident insurance and non-occupational accident insurance | Employers must provide employees with occupational accident insurance. If the employee works for the same employer for more than 8 hours a week, non-occupational accident insurance must also be taken out | The self-employed can also decide to take out occupational accident insurance with SUVA, depending on the sector. Non-occupational accident insurance is provided via obligatory health insurance | The self-employed can also decide to take out occupational accident insurance with SUVA, depending on the sector. Non-occupational accident insurance is provided via obligatory health insurance |
| Daily allowance insurance | Employers can take out insurance with a health insurer or insurance company cover the risk of inability to work or a loss of income. Half of the premium can then be charged to the employee | Insurance against the risk of inability to work or a loss of income is also advisable for the self-employed. This is optional and can be provided by a health insurer or insurance company |
Insurance against the risk of inability to work or a loss of income is also advisable for the self-employed. This is optional and can be provided by a health insurer or insurance company |
Note
There are various binding standards in employment law (Code of Obligations, Employment Act – Arbeitsgesetz etc.). In some cases, no divergence is possible from the rules, neither in favour of the employer nor of the employee (see list in Art. 361 of the Code of Obligations).
There are also norms which can only be diverged from if this is in the interest of the employee (see list in Art. 362 OR).
The norms regarding work contracts and mandates are not binding and can therefore be amended freely, subject to agreement by the parties.
Types of contracts
| Types | Contents | Form | Legal basis | Specificities |
| Employment contract* |
|
no requirements (written form recommended) | Art. 319 to 343 Code of Obligations / Labour Law (Arbeitsgesetz), binding law |
|
| Work contract* |
|
no requirements (written form recommended) | Art. 363 to 379 Code of Obligations |
|
| Mandate* |
|
no requirements (written form recommended) | Art. 394 to 406 Code of Obligations |
|
| Licensing contract |
|
no requirements (written form recommended) |
contract not falling under specific classification (‘Innominatvertrag’) |
Tips for the negotiation:
How to proceed:
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*Overlaps between employment contract, work contract and mandates. Distinction drawn on a case-by-case basis.
Note
There are countless other contracts out there which have to do with your work as an artist. To find out what you need to know – and to get templates of contracts – please contact the relevant professional association.
Or book your free consultations with our Ambassadors.