Only Geneva voted slightly in favour of the initiative, while results from Switzerland’s other 25 cantons showed that 66 percent rejected it, the ATS news agency reported.
The Swiss Business Federation hailed what it called a “heartening” result, saying the stricter laws would have “weighed on the restaurant sector as well as other economic sectors.”
It added in a statement: “The initiative would have imposed more costs on restaurateurs who have already made considerable investments to protect non-smokers.
Hotelleriesuisse, representing the hotel sector, said it was relieved by the outcome, saying a “yes” vote would have made “some investments obsolete”.
The Socialist party “deplored” the result, saying stepping up protection against passive smoking would have “incontestably been a major step in the improvement of (workers’) conditions”.
Voters were asked whether to strengthen a smoking ban in indoor workplaces and public spaces, with opponents decrying the move as a “witch-hunt.”
Polls had shown the country deeply divided on the eve of the referendum over the move initiated by the Swiss Pulmonary League, which aimed at clearing up confusion about the current legislation.
In a survey published last week, 52 percent opposed the initiative, against 41 percent in favour, and seven percent undecided.
Switzerland introduced a federal ban on smoking in enclosed workplaces and public spaces more than two years ago, but the law allowed for a number of exceptions and has been applied unevenly across the country’s 26 cantons.
While eight cantons, including Geneva, already have a total ban on indoor smoking in workplaces such as restaurants and bars, and public spaces like hospitals, the remaining 18 cantons apply the law less restrictively.
In 11 cantons, smokers are allowed to indulge their habit in small bars, cafes and restaurants of less than 80 square metres, and in establishments with smoking rooms with customer service.
In the other seven cantons, smoking is allowed in dedicated smoking rooms.
According to the Swiss Pulmonary League, working an eight-hour shift in a smoke-filled environment is equivalent to smoking 15 to 38 cigarettes.
A World Health Organisation study estimated that second-hand smoke kills upward of 600,000 non-smokers worldwide every year.