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Old 26.07.2012, 21:58
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Relocation package contract terms

I apologize in advance if this question has already been answered but I couldn't find any information about this specific issue in any other threads.

I have recently been offered a job in Zürich, an offer which also comes with a relocation package. The problem is that the contract contains a clause which states that I am required to repay the employer for the relocation costs both if I leave voluntarily or if the company terminates my employment within the first 12 months.

I have no problem with repayment in the case of voluntary termination but I am concerned about having to repay relocation costs if the company decides to terminate my employment. The way I see it, I could be doing a great job and the company could be extremely satisfied with my performance but the market could suddenly change and I would be made redundant. I feel the clause is unreasonable given the risk I am taking moving abroad to an unfamiliar country.

Does anyone know if this is a standard clause for relocation packages in Zürich?
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Old 26.07.2012, 21:59
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Re: Relocation package contract terms

Welcome to the forum!
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Old 26.07.2012, 22:13
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Re: Relocation package contract terms

Thanks! Cool avatar by the way!

Any experience in relocation contract terms perhaps?
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Old 26.07.2012, 22:15
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Re: Relocation package contract terms

I have not heard of such a clause being standard. However, in my contract I did have to repay a sign on bonus if I decided to leave within two years. I did no have to repay relocation to Zurich. I also insisted that they include a clause that they pay for my relocation out of CH if they terminated my contract. This contract was signed back in 2005. Not sure companies are so generous now!

Good luck
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Old 26.07.2012, 22:34
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Re: Relocation package contract terms

OK, thanks. Actually, I was a bit careless when reading the contract - I realize know that repayment in the event of involuntary termination only applies employment is terminated "for cause" which I understand requires some pretty serious misconduct, right?
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Old 26.07.2012, 23:08
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Re: Relocation package contract terms

This is pretty normal i think.

They are just covering their side of the investment, incase you do not perform or as you say, gross misconduct.

If you are worried about it then I see no real issue in querying a bit more, getting an elaboration on "cause" i.e. if company goes bankrupt, loses client etc is that cause? Or purely a conduct issue?

Not many companies will give you the boot in the first 12 months unless you are shockingly bad.
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Old 27.07.2012, 09:51
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Re: Relocation package contract terms

Simple, just add a clarification to the contract that if the company fires you for no fault of your own then the clause is non operative. Meaning if they fire you for economic reasons it's their problem, if it's for gross negligence it's your problem.

I hardly believe they will bring you over from where ever without doing due dilligence and i can't imagine it's in their interest to fire you either.
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Old 28.07.2012, 09:37
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Re: Relocation package contract terms

Ok, that makes sense. Thanks for the help everyone!
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Old 28.07.2012, 17:45
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Re: Relocation package contract terms

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Ok, that makes sense. Thanks for the help everyone!
I would recommend that you are made aware of the actual relocation costs, and not what is in the allowance.

My professional advice if you want to minimize the risk, arrange for temporary accommodation, do not ship your personal effects and do not retain a firm for the search for permanent housing until you know you are staying. In this way, if things do not work out in early days, you will not find yourself out of pocket.

Every contract has a probation period, once you reached the end of that, if you are still employed it is not as likely you will be let go.
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Old 28.07.2012, 18:14
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Re: Relocation package contract terms

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I would recommend that you are made aware of the actual relocation costs, and not what is in the allowance.

My professional advice if you want to minimize the risk, arrange for temporary accommodation, do not ship your personal effects and do not retain a firm for the search for permanent housing until you know you are staying. In this way, if things do not work out in early days, you will not find yourself out of pocket.

Every contract has a probation period, once you reached the end of that, if you are still employed it is not as likely you will be let go.
Good point, thanks. From my research (this forum being one source), the relocation allowance for temporary accommodation is on par with the "normal" rent for a one room apartment so I think that part is OK. I don't think I'll be shipping any personal effects so that will take care of itself.
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Old 28.07.2012, 18:49
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Re: Relocation package contract terms

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Good point, thanks. From my research (this forum being one source), the relocation allowance for temporary accommodation is on par with the "normal" rent for a one room apartment so I think that part is OK. I don't think I'll be shipping any personal effects so that will take care of itself.
A furnished apartment on a temporary basis is far more expensive than an unfurnished.
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Old 28.07.2012, 20:26
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Re: Relocation package contract terms

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A furnished apartment on a temporary basis is far more expensive than an unfurnished.
Got it, but an allowance of CHF 2000 per month would cover a furnished one room apartment in Zürich, right?
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Old 28.07.2012, 21:59
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Re: Relocation package contract terms

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Got it, but an allowance of CHF 2000 per month would cover a furnished one room apartment in Zürich, right?
Mine was a 30 m2 studio near Sihlcity and was CHF 3000 a month in 2009. More than we pay for a 116 m2 maisonette in a similar area!
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Old 28.07.2012, 22:27
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Re: Relocation package contract terms

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Mine was a 30 m2 studio near Sihlcity and was CHF 3000 a month in 2009. More than we pay for a 116 m2 maisonette in a similar area!
Right, but am I correct in assuming it would be possible to get a one-room apartment in Zürich for CHF 2000?
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Old 28.07.2012, 23:14
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Re: Relocation package contract terms

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Right, but am I correct in assuming it would be possible to get a one-room apartment in Zürich for CHF 2000?
probably possible.

just a note to add that you will be taxed on these allowances / relocation costs so factor that in
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Old 28.07.2012, 23:31
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Re: Relocation package contract terms

If an employer terminates the contract, all the expenses should be covered by the company, not the employee, including the relocation back to the home country. Exception to that would be only if employee resigns by his own initiative within certain time frame.

In other words - if company hires a person and plans to invest in relocation, they need to be bloody sure that the person is the right one for the job, fits to the team and has relevant motivation not to leave too soon. Otherwise that looks like "in case we find out that we've made a poor hiring decision, you would need to cover for that".
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Old 29.07.2012, 08:28
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Re: Relocation package contract terms

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If an employer terminates the contract, all the expenses should be covered by the company, not the employee, including the relocation back to the home country. Exception to that would be only if employee resigns by his own initiative within certain time frame.

In other words - if company hires a person and plans to invest in relocation, they need to be bloody sure that the person is the right one for the job, fits to the team and has relevant motivation not to leave too soon. Otherwise that looks like "in case we find out that we've made a poor hiring decision, you would need to cover for that".
There is no mention of the company covering relocation costs back to my home country if they terminate my employment. Are you saying that is a standard deal that companies normally offer in Zürich?
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Old 30.07.2012, 02:17
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Re: Relocation package contract terms

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There is no mention of the company covering relocation costs back to my home country if they terminate my employment. Are you saying that is a standard deal that companies normally offer in Zürich?

There are no standard deals, packages vary widely as I have discovered in those I have been involved in negotiating. Also, there is a bid difference if you are an intra-company transfer rather than a new hire.

Often there is very little wiggle room on the relocation package so be sure you read the terms and conditions carefully.
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Old 31.07.2012, 22:22
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Re: Relocation package contract terms

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There is no mention of the company covering relocation costs back to my home country if they terminate my employment. Are you saying that is a standard deal that companies normally offer in Zürich?
As Mrs. Doolittle mentioned, there are no standard deals. But that won't hurt to ask politely. If the company is big and bureaucratic, they will most likely stick to what was offered initially based on existent policies, while smaller companies could be more flexible.
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Old 09.08.2012, 23:29
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Re: Relocation package contract terms

Hi Folks,

Have a very similar query as above its in relation to signing on bonus - was considering starting a new thread (so dont shoot the newbie!) but reckoned it was close enough to original thread.

Have been offered a position in IT in Basel in one of the big two - contract offer has come with a good signing on bonus, however the payback clause is to stay for 3 years or I will have to pay back in full. Anyone else have experience of this?? Typically what I have seen is 2 years Max.

Don't get me wrong I am relocating being fully intent on staying for the long haul - however I have no intention of signing a binding contract and if something unforseen occurs ending up with a large payback

Many Thanks for peoples feedback
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