Swiss voters have decided against making companies pay for a national fund to finance more apprenticeships for youngsters.
The government had urged a "no" vote even though it is becoming increasingly hard for Switzerland's school-leavers to find jobs.
The government's argument was that the scheme would lead to administrative chaos. Most voters agreed, with about 70 per cent voting against the initiative.
The Swiss white-collar workers union, which supported the initiative, said the aim was to ease the burden on the taxpayer.
"As more companies reduce the number of [apprenticeship] places on offer, the government and cantons - and ultimately the taxpayer - are being asked to foot the bill," Union official, Mario Antonelli, told swissinfo.
The current "dual system" - which provides school-leavers with college-based theory and work experience - is mostly government funded, with a proportion paid by the companies that take on trainees.
Apprenticeships have been the traditional route for many school-leavers to break into the job market, but the number of places on offer is on the decline.
More than 30 per cent of companies offered apprenticeships 20 years ago. Last year, that figure was down to just 17 per cent.
Supporters of the proposals want to reverse the trend and guarantee young people training places. They argued that the proposed fund would act as an incentive for companies to offer apprenticeships by providing financing for more places.
"A central fund, into which companies would pay according to their size, would encourage more employers to take on trainees," Antonelli explained.
But the government warned that the scheme could lead to companies "buying their way out" by paying into the fund, but not creating training places.
Swiss economics minister Joseph Deiss told swissinfo that the proposals would also have lead to more red tape at both a cantonal and federal level.
"It would mean more bureaucracy - collecting money from companies, administering the procedure and at the same time maintaining the current system."
Deiss admits that there will be an increase in the number of school-leavers looking for apprenticeships this year and has set up a national task force to deal with the problem.
The government will prop up the current system with an emergency fund of around SFr32 million - a measure also adopted during the economic recession of the mid-90s, when parliament approved extra spending following a drastic shortage of places.
A new professional training law also has provisions for funds similar to the one being proposed. But rather than being run at a national level, those funds would be managed by industrial sectors, and contributions would be voluntary rather than compulsory.
But Antonelli argues that the new law does not go far enough.
He says around 19,000 school-leavers failed to secure an apprenticeship last year, and of those that did, many were forced to accept jobs in which they have no interest.
This will lead to some of them dropping out before completing their training, maintains Antonelli - further discouraging companies from investing in the future workforce.
He says that after writing as many as 200 applications and still failing to secure a place, 16- and 17-year-olds have no option but to return to school for another year before trying their luck again.
"This only brings them into competition with the following year's school-leavers, creating a snowball effect," he says.
"Unemployment for young people is like a ticking bomb for Switzerland as it is for every country.
"We have to invest time, money and interest now, because if we don't we will pay the price in the long term."
swissinfo, Jonathan Summerton
Last year, around 120,000 school-leavers, aged 16 and 17, applied for an apprenticeship.
Around 19,000 failed to secure a place.
Only 17 per cent of companies in Switzerland offer apprenticeships - compared to over 30 per cent 20 years ago.
A similar proposal to guarantee school-leavers the right to an apprenticeship in the constitution was rejected in a vote in 1986.