Don't ever quote me on this, but this is the biggest problem with Swiss contracts. The Swiss believe everything is covered by OR and therefore miss out a lot of detail. And guess who ends up picking up the can.

Be aware that the iron fist approach here is not a guaranteed winner and you need to do a bit of work. The person is Swiss and so they will know their rights and probably also know a good lawyer. You are "only" the poxy foreigner who is now their boss...

You really need to speak this through with HR and thereafter ie after you have agreed your way forward speak jointly with the involved person making it clear that this is not acceptable although you understand their sad loss. Asking them to suggest a reasonable solution might also be a first step in the right direction.

It could be that this particular grandparent looked after them and brought them up after the untimely death of both parents or something similar so rushing in is really not to be advised. Get a story from the employer first and make it clear they caused a major inconvenience. Once you have dealt with this bollock HR for not making this clear in the employment handbook...