Employment in Financial Services

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01. What is the primary regulatory regime applicable to financial services employees in your jurisdiction?

01. What is the primary regulatory regime applicable to financial services employees in your jurisdiction?

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Ireland

Ireland

  • at Maples Group

The Central Bank of Ireland (Central Bank) is responsible for the authorisation and supervision of regulated financial service providers (RFSPs) in Ireland.

The primary regulatory regime applicable to employees of RFSPs is the fitness and probity regime under the Central Bank Reform Act 2010 (2010 Act). Its function is to assess and monitor the suitability of individuals for certain key positions, known as Controlled Functions (CFs), including a sub-set of Pre-approved Controlled Functions (PCFs). Employers are required to perform certain minimum due diligence to confirm that individuals they propose placing in CF roles are fit and proper.

Fitness relates to an individual's competency, experience, qualifications and capacity to perform the role (including time commitments and being free from conflicts of interest).

Probity relates to an individual's honesty, diligence, independence, ethics and integrity in performing their role. A breach of an individual's fitness and probity obligations can result in criminal and administrative sanctions for the RFSP, suspension and disqualification for the individual, as well as other consequences prescribed by the Central Bank for the individual and the RFSP employer.

Candidates proposed to PCFs must complete an online individual questionnaire, which is submitted to the Central Bank. The Central Bank must grant its approval for the PCF appointment before a candidate can take up the role. Any PCF offer of employment must be conditional on that approval being obtained. The Central Bank may request applicants attend an interview as part of the approval process. Any individual seeking to occupy a CF or PCF position must comply with the Central Bank's Fitness and Probity Standards (F&P Standards).

The Central Bank also operates a minimum competency regime under the Minimum Competency Code 2017 and the Central Bank (Supervision and Enforcement) Act 2013 (section 48(1)) Minimum Competency Regulations 2017, which set out professional standards and competencies, and continuing professional development (CPD) requirements, for persons providing certain financial services and products. The aim is to ensure a minimum acceptable level of competence from individuals acting for or on behalf of RFSPs providing advice and information and associated activities (such as dealing with insurance claims or complaints), in connection with in-scope financial products.

The Central Bank (Individual Accountability) Bill 2022 will amend the fitness and probity regime and introduce a new Individual Accountability Framework (IAF) when enacted. This will include additional new business standards and common conduct standards for the RFSPs, their directors and staff, together with a Senior Executive Accountability Regime (SEAR). The primary aim is to make it easier for the Central Bank to pursue enforcement action directly against individuals in an RFSP and to move towards individual accountability for PCFs, who will be required to have detailed statements of responsibility for their roles. It is expected that the SEAR regime will be introduced on a phased basis during 2023, first applying to credit institutions, insurance undertakings (excluding reinsurance undertakings, captive (re)insurance undertakings and insurance special purpose vehicles) and investment firms that underwrite on a firm commitment basis, deal on own account, or are authorised to hold client monies or assets; and third-country branches of the above.

The Protected Disclosures Act 2014 was recently amended by the Protected Disclosures (Amendment) Act 2022. It will commence on 1 January 2023. It mandates that all large employers (with 250 or more employees) and most RFSPs (including MiFID firms, UCITS management companies, AIFMs, externally managed UCITS and externally managed AIFs) have and maintain internal reporting channels and investigation procedures that comply with its requirements from 1 January 2023. The new requirements will come into effect in December 2023 for smaller employers (50 to 249 employees).

Last updated on 17/02/2023

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Switzerland

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Employment law in Switzerland is based mainly on the following sources, set out in order of priority:

  • the Federal Constitution;
  • Cantonal Constitutions;
  • public law, particularly the Federal Act on Work in Industry, Crafts and Commerce (the Labour Act) and five ordinances issued under this Act regulating work, and health and safety conditions;
  • civil law, particularly the Swiss Code of Obligations (CO);
  • collective bargaining agreements, if applicable;
  • individual employment agreements; and
  • usage, custom, doctrine, and case law.

Depending on the regulatory status of the employer and the specific activities of financial services employees, respectively, Swiss financial market laws may also apply. They are, in particular, the Federal banking, financial institutions and insurance supervision regulations.

Last updated on 23/01/2023

02. Are there particular pre-screening measures that need to be taken when engaging a financial services employee?  Does this vary depending on seniority or type of role?  In particular, is there any form of regulator-specified reference that has to be provided by previous employers in the financial services industry?
 

02. Are there particular pre-screening measures that need to be taken when engaging a financial services employee?  Does this vary depending on seniority or type of role?  In particular, is there any form of regulator-specified reference that has to be provided by previous employers in the financial services industry?
 

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Ireland

Ireland

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As set out in question 1, RFSPs must satisfy themselves that all CF and PCF candidates or employees comply with the F&P Standards. Due diligence must be performed, including asking the candidate to certify they will comply with the F&P Standards and notify the RFSP immediately of any change in circumstance that may mean they no longer comply.

References are required as part of the fitness and probity due diligence process performed by employers, but there is no regulator-specified reference. The only distinction between the requirements for CFs and (more senior) PCFs is that PCF candidates require Central Bank prior approval.

Absent specific legal requirements to conduct criminal background checks, medical checks and other pre-employment checks other than references and rigorous compliance with GDPR, employers are limited in terms of the scope of any such background screening in Ireland by the GDPR.

Last updated on 17/02/2023

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Switzerland

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Under Swiss civil law, there is no requirement to apply pre-screening measures. However, while not a statutory requirement under Swiss financial market laws per se, companies subject to these laws apply pre-screening measures to ensure that a prospective financial services employee meets the requirements set forth by these laws. In particular, regulated companies such as banks, securities firms, insurance companies, fund management companies, managers of collective investment schemes and asset managers are required to obtain authorisation from the Swiss Financial Market Supervisory Authority (FINMA) relating to strategic and executive management and each change thereto.

As a general rule, the higher the responsibility or position of a person, the more requirements financial services employees may need to fulfil. Persons holding executive or overall management functions (eg, a member of the board or members of the senior management) are required to fulfil certain requirements set forth by the applicable Swiss financial market regulations. Such requirements may include providing current CVs showing relevant work experience and education as well as excerpts from the debt and criminal register. It may also include providing various declarations (eg, concerning pending and concluded proceedings, qualified participations and other mandates). Furthermore, financial services employees holding certain control functions (eg, compliance officer, risk officer and their deputies) may also be required to prove that they are suitable for the position by providing, for example, a current CV showing relevant work experience and education.

Last updated on 23/01/2023

03. What documents should be put in place when engaging employees within the financial services industry?  Are any particular contractual documents required?
 

03. What documents should be put in place when engaging employees within the financial services industry?  Are any particular contractual documents required?
 

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Ireland

Ireland

  • at Maples Group

The following documents should be in place:

  • written contract of employment that complies with the Terms of Employment (Information) Act 1994-2014;
  • grievance and disciplinary policy;
  • protected disclosures policy;
  • dignity at work policy (anti-harassment and bullying prevention);
  • safety statement; and
  • where possible, an employee handbook that details all the statutory leave policies and other bespoke policies of the RFSP.

Evidence of due diligence for compliance with the F&P Standards and certification of compliance.

Under the new IAF and SEAR proposals, those who perform senior executive functions will also be required to have a detailed statement of responsibility and contracts of employment will need to be updated to reflect the changes.

Last updated on 17/02/2023

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Switzerland

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No special contractual documents are required when engaging employees within the financial services industry.

However, it is generally recommended to conclude a written employment contract with each employee. FINMA, for instance, requires a copy of employment contracts concluded with senior management of regulated entities.
In particular, the employment contract should reference the employer’s (regulatory) set of directions and the employee’s obligation to comply with said instructions. In addition, because regulated companies such as banks, securities firms, fund management companies, managers of collective assets or asset managers are required to obtain authorisation from FINMA before the engagement of key personnel, it may be sensible to include a condition precedent relating to FINMA’s acceptance of the relevant employee in the employment contract.

The mandatory, partially mandatory, and optional elements of an individual employment contract are outlined in article 319 et seq of the CO (in particular regarding remuneration, working time, vacation, and incapacity for work). Further regulations may apply based on collective bargaining agreements.

Last updated on 23/01/2023

04. Do any categories of employee need to have special certification in order to undertake duties for financial services employers?  If so, what are the requirements that apply?
 

04. Do any categories of employee need to have special certification in order to undertake duties for financial services employers?  If so, what are the requirements that apply?
 

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Ireland

Ireland

  • at Maples Group

Yes, under the minimum competency regime (see question 1), employees who wish to perform certain prescribed functions and roles must have certain competencies and qualifications.

There are also CPD requirements for some roles. CFs must certify compliance with the F&P Standards.

Last updated on 17/02/2023

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Switzerland

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Depending on the status of the employing entity and the position of the financial services employee, a special certification or, more generally, proof of relevant work experience and sufficient education is required.

As a general rule, persons holding executive, overall management, oversight or control functions (eg, a member of the board, CEO, compliance officer, risk officer or their deputies) in regulated companies such as banks, insurance companies, securities firms, fund management companies, managers of collective assets or asset managers are required to demonstrate to FINMA that they have sufficient relevant work experience and education. As proof, FINMA requests current CVs, diplomas, certifications and contact details of references. The scope and nature of the future business activity and the size and complexity of the company in question also need to be considered.

Furthermore, client advisers of so-called financial service providers (eg, investment advisers) must have sufficient expertise on the code of conduct and the necessary expertise required to perform their work. Client advisors often prove that these requirements have been met by successfully attending special courses. In addition, insurance intermediaries registered with FINMA’s insurance intermediary register have to prove that they have undergone sufficient education and have sufficient qualifications. For this purpose, FINMA has published a list of different Swiss and foreign educational qualifications deemed to be sufficient on its website.

Last updated on 23/01/2023

05. Do any categories of employee have enhanced responsibilities under the applicable regulatory regime?
 

05. Do any categories of employee have enhanced responsibilities under the applicable regulatory regime?
 

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Ireland

Ireland

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No. The Irish regulatory regime does not apply enhanced responsibilities to any specific role at this time. The responsibilities will be set out as a matter of contract between the employer and the employee. When the IAF and SEAR are introduced in 2023, those performing senior executive functions will be required to have detailed statements of responsibility setting out the scope of their role. Business Standards, Common Conduct Standards, and Additional Conduct Standards will be introduced and will need to be reflected in employee contractual documents.

Last updated on 17/02/2023

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Switzerland

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Specifically, employees holding executive, overall management, oversight or control functions in regulated companies are responsible for ensuring that the companies’ organization ensures the continued compliance with applicable financial market laws. Swiss financial market laws do not have enhanced responsibilities for different employee categories. Instead, a person’s fitness and propriety are assessed within the context of the specific requirements and functions of a given company, the scope of activities at that company, and the complexity of that company.

Last updated on 23/01/2023

06. Is there a register of financial services employees that individuals will need to be listed on to undertake particular business activities?  If so, what are the steps required for registration?

06. Is there a register of financial services employees that individuals will need to be listed on to undertake particular business activities?  If so, what are the steps required for registration?

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Ireland

Ireland

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No.

Last updated on 17/02/2023

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Switzerland

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There is no universal register of all financial services employees. Rather, different Swiss financial market laws provide for a registration requirement that may apply to individual financial service employees. Whether a particular financial market law, and, consequently, a registration requirement, applies to a financial services employee depends specifically on the regulatory status of the employing entity and the particular activity of that employee.

Also, client advisers of Swiss or foreign financial service providers (eg, investment advisers) may be required to register with the adviser register, unless an exemption applies. Client advisers are the natural persons who perform financial services on behalf of a financial service provider or in their own capacity as financial service providers. Client advisers are entered in the register of advisers if they prove that i) they have sufficient knowledge of the code of conduct set out in the financial services regulations and the necessary expertise required to perform their activities, ii) their employee has taken out professional indemnity insurance or that equivalent collateral exists, and iii) their employee is affiliated with a recognized Swiss ombudsman in their capacity as a financial service provider (if such affiliation duty exists).

Furthermore, “non-tied” insurance intermediaries (ie, persons who offer or conclude insurance contracts on behalf of insurance companies) are required to register with FINMA’s register of insurance companies. “Tied” insurance intermediaries can register voluntarily. To register, persons must inter alia prove that they have sufficient qualifications and hold professional indemnity insurance or provide an equivalent financial surety.

Last updated on 23/01/2023

07. Are there any specific rules relating to compensation payable to financial services employees in your jurisdiction, including, for example, limits on variable compensation, or provisions for deferral, malus and/or clawback of monies paid to employees?
 

07. Are there any specific rules relating to compensation payable to financial services employees in your jurisdiction, including, for example, limits on variable compensation, or provisions for deferral, malus and/or clawback of monies paid to employees?
 

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Ireland

Ireland

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There are prescriptive, sector-specific requirements, which apply to the remuneration of specified categories of employees or directors, and which apply in the asset management, investment services, banking and insurance sectors.

Employers in these sectors are tasked with ensuring that the remuneration paid to material risk takers (individuals whose professional activities have a material impact on an RFSP's risk profile) or identified staff align with an RFSP risk profile.

There are detailed rules with technical guidance (emanating from EU law) specific to each sector, but at a high level they (to varying degrees) set out rules on variable remuneration composition, ratios or other metrics to compare variable to fixed remuneration to ensure it is appropriate; malus requirements, which would allow the RFSP to cancel or reduce the employee's variable remuneration before it is paid out; and clawback provisions which allow RFSPs to recover variable remuneration after it has been awarded.

The Central Bank's 2014 Guidelines on Variable Remuneration Arrangements for Sales Staff also emphasise the importance of remuneration structures to have sufficient deterrents built into them (such as malus and clawback mechanisms) to avoid undesired behaviour from sales staff in the banking, insurance and investment services sectors.

Last updated on 17/02/2023

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Switzerland

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Swiss civil law provides for special rules that govern the compensation of current and former members of inter alia the board and executive committee (Ordinance against Excessive Compensation) of Swiss companies limited by shares that are listed on a Swiss or foreign stock exchange. In addition, there are disclosure provisions listed companies need to follow concerning remuneration under stock exchange regulations.

In addition to the above, FINMA has formulated ten principles regarding remuneration that banks, securities firms, financial groups and conglomerates, insurance companies, insurance groups and conglomerates are required to implement. The principles serve as minimum standards for the design, implementation and disclosure of remuneration schemes.

These schemes should not incentivise to take inappropriate risks and thereby potentially damage the stability of financial institutions.

One of the focal points of the principles is variable remuneration that depends on business performance and risk. In particular, all variable remuneration must have been earned by the company over the long term. Consequently, remuneration is dependent on performance, taking into account the sustainability of such performance as well as the risks. That said, FINMA’s principles do not limit the amount of variable remuneration. However, FINMA aims to prevent the granting of high remuneration based on large risks and the generation of short-term, unsustainable earnings. Furthermore, persons who have significant responsibility relating to the risk or receive a high total remuneration, must receive a significant part of the variable remuneration on a deferred basis and consequently, in a way that is linked to the current risk. Under the FINMA principles, "clawback" and "malus" arrangements are permitted.

Last updated on 23/01/2023

08. Are there particular training requirements for employees in the financial services sector?

08. Are there particular training requirements for employees in the financial services sector?

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Ireland

Ireland

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Yes. A CF employee, subject to the minimum competency regime, will be required to complete CPD training. Evidence of meeting that CPD requirement is also a factor in determining a person's fitness and probity. RFSPs must maintain records of CPD training provided to CFs to demonstrate compliance with the minimum competency regime.

Employers within the scope of the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 - 2021 (including RFSPs) are required to provide annual training to relevant staff and directors on its requirements and the RFSP must have procedures in place to comply with that legislation and associated guidance.

Depending on the RFSP's business, additional mandatory training may be needed annually, for example, on topics such as market abuse.

The designated person for responding to protected disclosures should be trained and competent in the identification and handling of protected disclosures.

Last updated on 17/02/2023

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Switzerland

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In general, regulated companies (eg, banks, insurance companies or asset managers) are required to set up and maintain an organisation that ensures compliance with applicable financial market laws. Given the organisational measures and depending on the regulatory status of the employing entity and the position and activities of the financial services employee, there are training requirements.

While Swiss financial market regulations do not have an exhaustive list of exact training requirements, FINMA requires, among others, that the highest bodies of supervised companies (eg, executives of board members of banks, securities firms, insurance and reinsurance companies, fund management companies, managers of collective assets or asset managers) can fulfil the requirements of the so-called fit and proper test. These requirements extend to all character-related and professional elements that enable an officeholder to manage a supervised company in compliance with applicable laws. Part of the professional elements are relevant work experience and education. In addition, persons holding key positions (eg, compliance and risk officers and their deputies) are required to demonstrate sufficient know-how because of their work experience and education.

That said, the Swiss financial services and insurance supervisory regulations provide for more concrete training requirements. In particular, client advisers of Swiss and foreign financial service providers (eg, investment advisers) may need to demonstrate that they have sufficient knowledge of the code of conduct rules of the Swiss financial services regulation and the necessary expertise required to perform their activities. In addition, insurance intermediaries registered with FINMA’s insurance intermediary register have to prove that they have undergone sufficient education and have sufficient qualifications. On its website, FINMA has published a list of different educational Swiss and foreign qualifications that it deems to be sufficient.

Last updated on 23/01/2023

09. Is there a particular code of conduct and/or are there other regulations regarding standards of behaviour that financial services employees are expected to adhere to?
 

09. Is there a particular code of conduct and/or are there other regulations regarding standards of behaviour that financial services employees are expected to adhere to?
 

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Ireland

Ireland

  • at Maples Group

Yes there are. They are:

  • the fitness and probity regime;
  • the minimum competency regime; and
  • with effect from next year, the new IAF (see question 1).

There are also sector-specific conduct of business requirements in legislation and codes, including the Consumer Protection Code 2012, the MiFID II regime, and other regulatory requirements applicable to RFSPs based on their industry sector that apply and deal with matters such as:

  • error handling,
  • disclosures to customers,
  • acting in the best interests of customers; and
  • complaints handling.
Last updated on 17/02/2023

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Switzerland

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Depending on the regulatory status of the employing entity and, as the case may be, on the exact activities of a financial service employee, a financial service employee needs to adhere to certain code of conduct rules (eg, regarding transparency and care, documentation and accountability).

Supervised companies in Switzerland are, in principle, required to set up an organisation that ensures the compliance with Swiss financial market laws and its statutory code of conduct rules. For this purpose, among others, companies are required to issue regulations that their employees must follow.

Under Swiss financial market laws, code of conduct rules are generally based on abstract statutory rules and concretized by recognised privately organised associations.

In particular, several professional organisations (eg, the Swiss Bankers Association or the Asset Management Association) and self-regulated organisations issue their own set of code of conduct rules that members are required to follow.

Last updated on 23/01/2023

10. Are there any circumstances in which notifications relating to the employee or their conduct will need to be made to local or international regulators?
 

10. Are there any circumstances in which notifications relating to the employee or their conduct will need to be made to local or international regulators?
 

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Ireland

Ireland

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The Central Bank expects RFSPs to be open and transparent in their engagement, including concerning the fitness and probity regime. The F&P Guidance provides that, where an RFSP develops concerns regarding the fitness and probity of a person performing a CF role, the Central Bank should be notified of such concerns without delay. A Dear CEO Letter to RFSPs on 8 April 2019 goes further and provides a non-exhaustive list of actions that must be notified to the Central Bank, which include: issuing a formal written warning; suspension; dismissal; or a reduction of remuneration of a CF or PCF.

Last updated on 17/02/2023

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Switzerland

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As a general principle, supervised companies are required to ensure that persons holding, in particular, executive, overall management, oversight or control functions fulfil the requirements of the “fit and proper” test. Consequently, such persons must be of good repute and can guarantee compliance with applicable laws and regulations.

If a person cannot guarantee that the regulatory requirements are fulfilled at all times (eg, because of a material breach of its duties) the employing entity and its audit companies may be required to immediately report to FINMA, respectively, any incident that is of significance

Last updated on 23/01/2023

12. Are there any particular rules or protocols that apply when terminating the employment of an employee in the financial services sector, including where a settlement agreement is entered into?

12. Are there any particular rules or protocols that apply when terminating the employment of an employee in the financial services sector, including where a settlement agreement is entered into?

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Ireland

Ireland

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Where possible it is important to try to resolve any outstanding issues that a PCF has or may have before the PCF's contract is terminated. An RFSP is required to give details of the circumstances of a PCF's termination of employment and to confirm whether or not there are outstanding issues regarding the PCF.

It is important to ensure that there are adequate provisions to govern the following in any settlement agreement or termination arrangements:

  • adequate handover of operational responsibility;
  • continued co-operation on operational matters within the employee's knowledge or in relation to matters that may subsequently be investigated by the Central Bank;
  • secure return of all company property including any personal data; and
  • post-termination confidentiality obligations and any other necessary post-termination restrictions.
Last updated on 17/02/2023

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Switzerland

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There are no specific rules or protocols that apply when terminating the employment of an employee in the financial services sector. However, because changes in the strategic and executive management of, in particular, regulated companies such as banks, insurance companies, securities firms, fund management companies, managers of collective assets or asset managers are subject to a prior authorization by FINMA, the timing of termination and re-hiring of particular persons should be considered.

The general rules on the termination of an employment relationship apply under Swiss law: any employment contract concluded for an indefinite period may be unilaterally terminated by both employer and employee, subject to the contractual or (if no contractual notice period was agreed) statutory notice periods for any reason (ordinary termination).

The termination notice needs to be physically received before the notice period can start, meaning the notice needs to be received by the employee before the end of a month so that the notice period can start on the first day of the next month. If notice is not received before the end of the month, the notice period would start the month following the receipt of the notice. A termination notice might be either delivered by mail or personally.

Swiss law does not provide for payment in lieu of a notice period. The only option in this regard is to either send the employee on garden leave or to agree within the termination agreement to terminate the employment relationship per an earlier termination date than the one provided for in the termination notice.

As a general rule, an employment contract may be terminated by either party for any reason. However, Swiss statutory law provides for protection from termination by notice for both employers and employees, distinguishing between abusive and untimely notices of termination.

Based on social policy concerns, the employer must observe certain waiting periods, during which a notice cannot validly be served (so-called untimely notice). Such waiting periods apply (art. 336c CO), for example, during compulsory military or civil defence service, full- or part-time absence from work due to illness or an accident, or during an employee’s pregnancy and 16 weeks following the birth of the child. Any notice given by the employer during these waiting periods is void. Any notice given before the respective period is effective, but once the special situation has occurred and for the period it lasts, the running of the applicable notice period is suspended and only continues after the end of the period in question.

In addition, Swiss civil law defines certain grounds based on which terminations are considered abusive (article 336 CO). Termination by the employer might be considered abusive (eg, if it is based on a personal characteristic of the other party (eg, gender, race, age), or if the other party exercises a right guaranteed by the Swiss Federal Constitution (eg, religion or membership in a political party) unless the exercise of this right violates an obligation of the contract of employment or is seriously prejudicial to the work climate). If the employer abusively terminates the employment contract, the employer has to pay damages to the employee and a penalty of up to six months' remuneration (article 336a CO). Nevertheless, an abusive termination remains valid.

Regarding settlement agreements, Swiss employment law allows the conclusion of such agreements, but there are strict limits on the parties’ freedom of contract. Termination agreements may not be concluded that circumvent statutory provisions on employee protection. According to Swiss case law, termination agreements are usually valid and enforceable if both parties make real concessions, and if the agreement is also favourable for the employee. To conclude a termination agreement initiated by the employer, the employee must also be granted a sufficient reflection period. No further formalities need to be observed when concluding termination agreements, although it is generally advisable to have them in writing.

Last updated on 23/01/2023

13. Are there any particular rules that apply in relation to the use of post-termination restrictive covenants for employees in the financial services sector?

13. Are there any particular rules that apply in relation to the use of post-termination restrictive covenants for employees in the financial services sector?

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Ireland

Ireland

  • at Maples Group

No there are no bespoke rules that apply. Post termination restrictions in Ireland are void as being in restraint of trade unless it can be shown that the restrictions are necessary to protect an employer's legitimate proprietary interest and they are proportionate and reasonable in their scope and duration to achieve that protection[i].

[i] Law as of 21 November, 2022

 

Last updated on 17/02/2023

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Switzerland

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There are no particular rules that apply concerning the use of post-termination restrictive covenants for employees in the financial services sector in Switzerland. Rather, general post-contractual non-compete regulations come into play: the parties of an employment contract may agree on a non-compete clause, which must be included in the employment contract in writing to be valid. For the non-compete clause to be relevant, it must be sufficiently limited in terms of time, place and subject matter. Normally, the duration of a post-termination non-compete clause is no more than one year; however, the statutorily permissible duration is three years.

As a prerequisite for a contractual non-compete clause to be binding, access to sensitive data is required. The employee must either have access to customer data or manufacturing or business secrets. However, access alone is not enough. There must also be the possibility of harming the employer using this knowledge.

If a relationship between the customer and the employee or employer is personal (which is, for example, the case for lawyers or doctors), a post-termination non-compete clause is not applicable according to the Federal Supreme Court.

If there is an excessive non-compete clause, this can be restricted by a judge. In practice, most of the time, no restriction of the post-termination non-compete clause is imposed if the employer offers consideration in return for the agreement. The prohibition of competition may become invalid for two reasons. Firstly, the clause can become irrelevant if the employer has no more interest in maintaining the non-compete clause. Secondly, the clause is not effective if the employer has terminated the employment relationship. However, this does not apply if the employee has given the employer a reason to terminate the employment relationship.

Swiss employment law does not provide for any compensation for a post-termination non-compete clause.

Last updated on 23/01/2023

14. Are non-disclosure agreements (NDAs) potentially lawful in your jurisdiction? If so, must they follow any particular form or rules?

14. Are non-disclosure agreements (NDAs) potentially lawful in your jurisdiction? If so, must they follow any particular form or rules?

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Ireland

Ireland

  • at Maples Group

Yes. NDAs are legal in Ireland, but there are some limitations on their use and enforceability.

Certain mandatory reporting obligations will override a contractual non-disclosure agreement, such as the requirement for PCFs under section 38(2) of the Central Bank (Supervision and Enforcement) Act 2013 to disclose certain matters to the Central Bank.

Further, an NDA cannot extinguish an employee's right to anti-retaliation protection where the employee makes a protected disclosure either internally or externally under the Protected Disclosures Act 2014.

Last updated on 17/02/2023

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Switzerland

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Non-disclosure agreements (NDAs) are generally lawful in Switzerland. However, NDAs are not regulated by statutory law and therefore do not have to follow any particular statutory form or rule. Nevertheless, most NDAs often contain a similar basic structure.

The core clauses of an NDA concern:

  • manufacturing and business secrets or the scope of further confidentiality;
  • the purpose of use;
  • the return and destruction of devices containing confidential information; and
  • post-contractual confidentiality obligations.

As a general rule, it is recommended to use the written form.

To ensure possible enforcement of an NDA in the employment context, the requirements of a post-contractual non-compete obligation (see question 13) must be met.

Last updated on 23/01/2023