- within Employment and HR topic(s)
The French company Atelier Lumière Sàrl specialises in the design and installation of high-quality lighting systems for museums and exhibition spaces. Thanks to its excellent reputation, it was commissioned by a public institution in Switzerland to modernise the lighting system in a historic exhibition hall.
Atelier Lumière Sàrl needed additional specialist staff to carry out the project. It therefore brought in self-employed lighting technicians from France and metalworkers from Portugal. These individuals had been working regularly for the French company for several years, were registered as sole traders in their home countries and carried out several projects for different clients each year.
The project manager registered a total of eight people for a temporary assignment in Solothurn via EasyGov. All those involved were declared as self-employed service providers working on behalf of the French company.
Inspection by the enforcement authority
As part of a labour market inspection by the Joint Commission for the Construction Industry, several of the registered individuals were asked to submit additional documents to confirm their self-employment status. Among other things, they were required to provide:
- A1 certificate
- Project contract with the Swiss client
- Invoices to various customers
- Proof of VAT accounting
- Proof of own business infrastructure
The questionnaire to prove self-employment focused in particular on the following points:
- Company data (name, registration, website)
- Number and type of orders for various clients
- Own advertising and market presence
- Own business premises or vehicles
- Provision of materials, tools and machinery
- Accounting and business risk
- Freedom of choice regarding working hours, procedures and execution
- Organisation of accommodation and deployment logistics
The Joint Commission is responsible for monitoring and enforcing the generally binding collective labour agreement in the construction industry. As the activities carried out are professions subject to the CLA, it was obliged to check the actual employment situation of the persons registered.
Legal assessment
According to Swiss law on the posting of workers, foreign service providers who claim to be self-employed must provide proof of this at the request of the competent supervisory authorities. The decisive factor here is exclusively the actual work situation in Switzerland and not the formal classification in the country of origin.
After the documents had been submitted and an on-site inspection had been carried out, the Joint Commission assessed the case on the basis of the actual project implementation. The following points were particularly decisive:
- The work was carried out according to detailed specifications from the French project management.
- The individuals worked exclusively as part of a team and not independently.
- Tools and materials were largely provided by the client.
- Accommodation was organised centrally by Atelier Lumière SÀRL.
- There was no individual scope for decision-making or creativity in terms of schedule and working methods.
Based on these criteria, the Joint Commission classified the persons reported not as self-employed persons, but as dependent employees in a de facto employee situation. The fact that the persons were registered as self-employed in their home country was irrelevant to the assessment.
Consequences
The decision was forwarded to the competent cantonal labour market authority. The latter informed the French company in writing that the persons employed should have been registered not as self-employed service providers but as posted workers. The CLA wages must therefore be paid retroactively.
The incorrect registration was classified as a registration violation. It was hold out the prospect of an administrative fine of up to CHF 5,000 in accordance with the Posted Workers Act. In the administrative proceedings conducted by the cantonal labour market inspectorate, a fine of CHF 2,500 was imposed and the company was required to pay the difference between the subcontractors' documented fees and the subsequently calculated CLA wages.
Conclusion
The decisive factor is not how a person is registered in their home country or what certificates they have. The only thing that matters is how the work is actually carried out in Switzerland.
If there is no entrepreneurial freedom of decision – particularly with regard to work organisation, materials, scheduling and risk – there is a considerable risk that a person registered as self-employed will be classified as a de facto employee.
If self-employment cannot be clearly and comprehensively proven (multiple clients, accounting, own infrastructure, genuine freedom of decision), it is advisable from a compliance perspective to register the persons as dependent employees. As a result, the working and wage conditions must be strictly adhered to in accordance with the law on the posting of workers and the applicable industry collective agreement.
EXCURSUS
Relationship with state authorities (labour inspectorate – canton)
a) Responsibility of the cantonal authorities
In parallel to the joint committees and tripartite committees (for professions without a collective labour agreement), Switzerland has a public labour market and posting control system operated by state authorities (e.g. labour market authorities or cantonal labour inspectorates). These are independent enforcement bodies under public law and enforce, in particular, the provisions of the Posted Workers Act (EntsG) and the Federal Act against Illegal Employment (BGSA).
If a joint commission or a tripartite commission finds violations of labour or posted worker law obligations during an inspection, its findings have no direct legal effect on state authorities, but can serve as a point of reference or report to the inspection authority. The cantonal authorities act on the basis of federal and cantonal laws and can themselves:
- initiate administrative proceedings,
- impose fines in accordance with the Posted Workers Act or other legal bases,
- issue service or activity bans, and these decisions are state administrative acts that are enforceable and contestable.
b) Connection between the decision of the Joint Commission/Tripartite Commission (JC/TC decision) and state sanctions
The following should be noted in the context of accompanying measures:
- JC/TC sanctions are primarily contractual and governed by private law.
- If the PK/TK decision is made on the basis of a violation of the Posted Workers Act, for example, the PK/TK can or must report the facts to the competent cantonal authority, which then initiates a state procedure.
- Only state administrative acts (e.g. under the Posted Workers Act) are normally directly enforceable through debt collection or other state coercive measures.
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