Non-competition clauses in employment agreements

In labor law, the principle of “no work, no pay” applies. This means that the employee generally bears the risk of loss of wages, and the employer is not obligated to pay wages if the employee is prevented from performing work.

In a decision dated January 19, 2026 (9C_96/2024), which is scheduled for publication, the Federal Supreme Court ruled for the first time on the taxation of compensation for unlawful termination without notice. Back in 2022, the Federal Supreme Court classified compensation for wrongful termination as tax-exempt satisfaction (BGE 148 II 551).

In addition to adjustments to the OECD Model Tax Convention detailed provisions regarding cross-border employments shall be implemented in the protocol of the double tax treaty.

In Switzerland, taxes are levied at federal, cantonal and municipal level. This is, in particular, the case with income and capital taxes for legal entities and income and wealth taxes for individuals. The tax burden between the cantons and also between municipalities within the same canton may vary considerably.