TSA Pre-Signing Review
Price the Swiss TSA before you sign.
We scope the pension and cantonal reality into the TSA while you still hold leverage. Fixed-fee proposal in 48 hours. The first conversation is always free.
A TSA carve-out in Switzerland turns on the automatic employee transfer under Article 333 of the Code of Obligations, a multi pillar payroll and pension system, and data protection under the revised Federal Act on Data Protection. The work belongs inside the broader carve-out advisory plan, and in Switzerland the pension and cantonal detail sets the timeline more than the technology does. The buyer that treats Switzerland as a simple version of Germany underprices the separation.
When a business is transferred in Switzerland, Article 333 of the Code of Obligations moves the employment relationships of that business to the buyer on their existing terms. The buyer inherits tenure, accrued holiday, and the obligations attached to each contract. Unlike the automatic and largely involuntary transfer in much of the EU, the Swiss employee holds a clear right to refuse the move to Newco.
If an employee refuses the transfer, the relationship does not pass to Newco. It instead ends on expiry of the statutory notice period, and during that period the employee may be obliged to work for the transferor. This makes refusal a real planning variable. The buyer maps which roles Newco cannot afford to lose and builds retention around them before the transfer is announced.
Where the transfer is connected to a reduction in headcount, a consultation duty applies. The transferor or the buyer informs the employee representatives, or the employees directly where there is no representative body, in time for them to comment before decisions are taken. Skipping consultation exposes the transaction to challenge and delay.
Newco needs a confirmed transferring population before it sizes payroll, pension affiliation, and systems access. The refusal right means that population is not final until the notification process has run, so the buyer plans the TSA against a range rather than a single number.
Swiss payroll sits on a three pillar social system. The first pillar is the state AHV scheme covering old age, survivors, and disability, registered through the relevant compensation office. The second pillar is occupational pension under the BVG, run through a pension fund the employer affiliates to. The third pillar is private and voluntary. Newco must register for the first pillar and arrange a second pillar fund before it can run a compliant payroll.
Second pillar affiliation is the part buyers underestimate. Moving employees to a new pension fund, or establishing one, takes time and involves the existing accrued benefits. Until that is settled, the seller fund and the seller payroll often have to keep running, which is why a Swiss carve-out usually carries a payroll TSA for several cycles rather than a clean Day One handover.
Source tax adds further complexity. Certain employees, including many foreign nationals without permanent residence, are taxed at source by the employer at cantonal rates. Accident insurance under the UVG is mandatory and split by occupational and non occupational cover. The data feeding each of these is detailed and the cantonal variation is real.
The buyer holds the payroll TSA to cost-plus or fixed-fee with audit rights and a firm exit date, then cuts over at a month boundary once the pension fund and source tax registrations are confirmed clean.
Switzerland sits outside the EU and runs its own revised Federal Act on Data Protection, supervised by the Federal Data Protection and Information Commissioner. The revised law moved Swiss practice closer to the GDPR, with records of processing, breach notification, and impact assessments, but it is a separate regime with its own thresholds. A carve-out maps the Swiss rules in their own right rather than assuming GDPR compliance carries across.
The GDPR can still apply on top, because activities that target individuals in the EU fall within its reach. Many Swiss businesses serve EU customers, so the buyer often runs both regimes in parallel and documents which data falls where. The TSA needs to reflect that dual exposure rather than treating Switzerland as a single law country.
During the TSA the seller processes Newco personal data in shared systems, so a processor agreement with security obligations and a deletion duty at exit is essential. Any transfer of personal data out of Switzerland needs a recognised mechanism, and support routed to a country without adequate protection requires safeguards.
The migration itself usually warrants a data protection impact assessment, both as compliance and as the evidence trail the Commissioner would expect to see.
Switzerland is a federation of cantons, and a great deal of administration happens at cantonal level. Source tax rates, certain registrations, and some employment formalities vary by canton, so a carve-out that spans several cantons multiplies the touchpoints rather than repeating one process. The buyer maps each canton where employees sit and confirms the local requirements early.
Language follows the canton. German, French, and Italian are all official, and employment documentation, payslips, and employee communications are expected in the working language of the site. A transfer notification or consultation document written only in English risks being treated as ineffective. The buyer budgets for accurate translation as part of the separation, not as an afterthought.
The currency is the Swiss franc, and the TSA pricing, the seller charges, and the Newco budget all need to be stated and settled in francs to avoid an unmanaged currency exposure. Where the seller is a foreign group billing in another currency, the buyer fixes the conversion approach in the agreement.
The same disciplined attention to local consultation appears in the German carve-out, where the works council sets the pace. Switzerland is lighter on codetermination but heavier on cantonal and pension detail.
The Swiss TSA scope typically covers payroll and pension administration, IT and identity, finance, and facilities, each with a clear description, a service-level expectation, and a price held to cost-plus or fixed-fee. The buyer insists on line item pricing because seller cost allocations can bury group overhead that does not belong to Newco.
Cutover is sequenced and gated. Payroll cuts at a month boundary once the pension fund affiliation and source tax registrations are confirmed, IT after a tested migration, finance at a period close. Each step has a reconciliation gate and a rollback path so a single failure does not spread across the separation.
Cost discipline depends on doing the work before signing. The buyer benchmarks seller charges, removes unjustified mark-up, and sets exit fees that decline across the term. Where pension affiliation extends the payroll TSA, the buyer at least controls the price and the exit conditions rather than accepting open ended seller dependency.
A disciplined Swiss separation leaves Newco running its own payroll, affiliated to its own pension fund, on its own systems and data estate, with the seller dependency closed on agreed terms. That outcome starts with a pre-signing review that scoped the TSA before leverage shifted to the seller.
Article 333 of the Code of Obligations transfers employment relationships to the buyer on their existing terms when a business is transferred. Each employee can refuse the transfer, in which case the relationship ends on expiry of the statutory notice period rather than passing to Newco.
Newco registers for first pillar AHV social security, second pillar occupational pension under the BVG, accident insurance, and where relevant source tax for certain employees. Cantonal variation and pension fund affiliation mean most buyers run a seller payroll TSA until a clean cutover at a month boundary.
Switzerland sits outside the EU and applies the revised Federal Act on Data Protection, supervised by the FDPIC. The GDPR still reaches activities targeting the EU, so a carve-out maps both regimes and treats any transfer of personal data out of Switzerland as a controlled workstream.
Length depends on pension fund affiliation, payroll registration, and IT migration rather than a single legal gate. Buyers scope the seller TSA to cost-plus or fixed-fee with audit rights and a firm exit date, and sequence cutover so payroll and finance move at clean period boundaries.
Works council consultation, BGB 613a transfer, and the German cost discipline.
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We scope the pension and cantonal reality into the TSA while you still hold leverage. Fixed-fee proposal in 48 hours. The first conversation is always free.
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