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Switzerland extends professional services deal with the UK

Switzerland and the UK have extended a deal that allows professionals special access to each other's markets until the end of 2025.

Published: 21 November 2022 16:25 CET

A person working on a laptop.

A person working on a laptop. Photo by Christin Hume on Unsplash

Under the deal, Swiss and British service providers are given easier access to each others’ markets.

“The Services Mobility Agreement (SMA) maintains ease of access for service providers following the end of the free movement of persons between Switzerland and the UK with the latter’s withdrawal from the EU,” said a statement from the economic department at the Swiss Federal Council.

The deal “regulates market access and temporary stay for service providers such as business consultants, IT experts and engineers”, said the Council, adding that it “meets a need” in the Swiss economy.

The temporary agreement, which came into force on January 1st 2021, is to be extended until the end of 2025.

Under the deal, Switzerland grants UK professionals seeking to provide a service in Switzerland access for a maximum period of 90 days per calendar year.

READ ALSO: EXPLAINED – What is Switzerland’s deal with the EU?

According to the Swiss Federal Council, more than 4,000 British suppliers have used the 90-day market access option to provide services in the Swiss market since 2021.

The deal also gives Swiss exporters “preferential access” to the UK market in over 30 service sectors, according to the Swiss Federal Council.

In many sectors, service providers no longer need to prove they hold a university degree or have experience in order to be admitted to the UK market.

Meanwhile, some Swiss higher vocational education and training qualifications are now recognised by the UK as equivalent to a university degree. The UK has also simplified some of the procedures for obtaining a business visa.

According to the British government, Switzerland is the UK’s “sixth largest export market for services, worth over £12 billion in exports last year”.

In a statement the UK government said the deal provided certainty for firms in both countries.

“Moving skilled people between countries is vital to services exports, facilitating the delivery of projects and face to face conversations that help to win new clients and get deals done,” said the UK government in a statement.

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The pitfalls of Switzerland's social security system you need to avoid

The Swiss social security system has several branches: old-age, survivors’ and disability insurance; health and accident insurance; unemployment benefits, and family allowances.

This is a pretty comprehensive package, which covers everyone who pays into the scheme for a wide variety of ‘what ifs’.

As the government explains it, “people living and working in Switzerland benefit from a tightly woven network of social insurance schemes designed to safeguard them against risks that would otherwise overwhelm them financially.”

But while most residents of Switzerland are able to benefit, at least to some extent, from this system, others don’t.

What is happening?

If someone becomes ill or has an accident, Switzerland’s compulsory health insurance and / or accident insurance will cover the costs.

However, a prolonged absence from work can become costly.

That is especially the case of people employed by companies that don’t have a collective labour agreement (CLA), a contract negotiated between Switzerland’s trade unions and employers or employer organisations that covers a wide range of workers’ rights.

READ ALSO: What is a Swiss collective bargaining agreement — and how could it benefit you?

It is estimated that roughly half of Switzerland’s workforce of about 5 million people are not covered by a CLA.

If you just happen to work for a company without a CLA, your employer is not required to pay your salary if your illness is long.

You will receive money for a minimum of three weeks – longer, depending on seniority — but certainly not for the long-haul.

You may think that once your wages stop, the disability insurance (DI) will kick in.

But that’s not the case.

The reason is that DI can be paid only after a year after the wages stop. In practice, however, it sometimes takes several years of investigations and verifications to make sure the person is actually eligible to collect these benefits, rather than just pretending to be sick.

In the meantime, these people have to use their savings to live on.

What about ‘daily allowance insurance’?

Many companies (especially those covered by a CLA) take out this insurance, so they can pay wages to their sick employees for longer periods of time.

However, this insurance is optional for employers without a CLA is place.

As a result, small companies forego it because it is too much of a financial burden for them.

And people who are self-employed face a problem in this area as well: insurance carriers can (and often do) refuse to cover people they deem to be ‘too risky’ in terms of their age or health status.

Critics are calling the two situations —the length of time it takes for the disability insurance to kick in and gaps in the daily allowance insurance—”perhaps the biggest failures of the social security system.”

Is anything being done to remedy this situation?

Given numerous complaints about the unfairness of the current system, the Social Security and Public Health Commission of the Council of States (CSSS-E) will look into the “consequences of shortcomings and numerous dysfunctions in long-term illness insurance.”

But not everyone in Switzerland sees a problem in the current situation.

According to the Swiss Insurance Association (SIA), for instance, “making daily sickness allowance insurance compulsory for employers would not have the desired effect. Due to false incentives, it would only exacerbate the upward trend in costs and premiums.”

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