In the last decade, arbitration as a mechanism for alternative dispute resolution has become increasingly important. Questions of arbitrability move to the forefront as arbitration expands to disputes whose commercial character might be less obvious. One recent question of interest is whether individual employment disputes can be the subject of arbitration proceedings in Switzerland. This paper identifies two areas of employment disputes which lend themselves to final resolution through arbitration. In particular, sports related and “executive”-employee disputes benefit from dispute resolution outside of state courts.
The well-known distinction between domestic and international arbitration proceedings seated in Switzerland has a profound impact on the subject matters that are considered to be arbitrable. Because Art. 177 of the Private International Law Act states that any dispute concerning a pecuniary interest may be the subject of an arbitration procedure, “international” parties desiring to arbitrate their dispute will rarely face an issue since almost all possible employment law claims are of a pecuniary interest to at least one party. On the other hand, the arbitrability of a domestic dispute is governed by Art. 354 Civil Procedure Code, which limits the scope of a potential arbitration procedure to any claim over which the parties may “freely dispose of”. The possibility of arbitration procedures regarding employment law disputes is therefore limited, since the Federal Supreme Court decided that an employee cannot “freely dispose of” all mandatory provisions enumerated in the Code of Obligations. This discrepancy is the main focus of this essay and will be explored in detail.