Navigating employment termination in Switzerland requires careful adherence to legal requirements to ensure compliance and avoid potential disputes. Swiss labor law provides a framework designed to protect both employers and employees, emphasizing fairness and procedural correctness throughout the termination process. Understanding these regulations is crucial for companies operating in the country.
The process involves specific notice periods, potential severance obligations, defined grounds for dismissal, and mandatory procedural steps. Employers must be aware of these nuances to manage workforce changes effectively and lawfully, particularly concerning employee protections against unfair or abusive termination.
Notice Period Requirements
In Switzerland, employment contracts can generally be terminated by either party by giving notice. The required notice period depends on the employee's length of service with the company, unless a longer period is stipulated in the individual employment contract or a collective bargaining agreement (CBA). Shorter notice periods are only permissible during the probationary period or if agreed upon in a CBA for the first year of service.
The statutory minimum notice periods are as follows:
| Length of Service | Minimum Notice Period |
|---|---|
| During Probation | 7 days (unless otherwise agreed) |
| Up to 1 year | 1 month |
| 2 to 9 years | 2 months |
| 10 years or more | 3 months |
Notice periods typically run from the end of the month in which notice is given. For example, if a 2-month notice period applies and notice is given on January 15th, the employment would terminate on March 31st.
Severance Pay
Under Swiss law, a mandatory severance payment (known as "Abgangsentschädigung") is generally only required for employees who are terminated after reaching the age of 50 and having completed at least 20 years of service with the same employer. This payment is calculated based on the employee's years of service and age, and the amount is determined by the judge's discretion, ranging from 2 to 8 months' salary.
It is important to note that many companies provide severance packages voluntarily, often based on company policy, individual negotiation, or collective bargaining agreements, even when not legally mandated. These contractual or voluntary severance payments are more common than the statutory requirement.
Grounds for Termination
Swiss law distinguishes between ordinary termination and extraordinary termination.
- Ordinary Termination: This is the standard form of termination with notice. Generally, no specific reason or "cause" is required for ordinary termination, provided the correct notice period is observed and the termination is not considered "abusive."
- Extraordinary Termination: This allows for immediate termination without notice for "just cause." Just cause is defined as any circumstance that makes it unreasonable for the terminating party to continue the employment relationship until the end of the notice period. This is a high threshold and typically involves serious misconduct by the employee (e.g., theft, gross insubordination, breach of trust) or, less commonly, by the employer.
Terminations during certain protected periods (e.g., during military service, illness/accident within specific timeframes, pregnancy, maternity leave) are null and void.
Procedural Requirements for Lawful Termination
While Swiss law does not mandate a specific written form for notice of termination unless agreed upon in the contract, written notice is highly recommended for clarity and proof. There is no legal requirement for a prior warning or hearing before ordinary termination, but providing a reason upon request is required, and following a fair process is crucial to avoid claims of abusive termination.
Key procedural considerations include:
- Written Notice: Delivering a clear, written notice stating the termination date.
- Reason for Termination: While not always required upfront for ordinary termination, providing a truthful and non-abusive reason upon the employee's request is legally mandated.
- Timing: Ensuring notice is given correctly to align with the end-of-month rule for statutory notice periods.
- Final Pay and Documents: Calculating and paying final salary, holiday pay, overtime, and issuing a final employment certificate (Arbeitszeugnis). The certificate must be truthful and favorable to the employee's future job search.
- Return of Company Property: Managing the return of company assets.
Common pitfalls include giving insufficient notice, failing to provide a reason when requested, issuing an unfair employment certificate, or terminating during a protected period.
Employee Protections Against Wrongful Dismissal
Swiss law protects employees against "abusive" termination. An ordinary termination with notice can be deemed abusive if it is based on reasons considered unfair or discriminatory. Examples of abusive termination include dismissal due to:
- A protected characteristic (e.g., race, religion, gender, sexual orientation).
- Exercising a constitutional right (unless it violates duties).
- Union membership or activity.
- Serving in a mandatory legal capacity.
- Making a good faith complaint about the employer.
- During a protected period (though these terminations are null and void, not just abusive).
- Retaliation after a conciliation process.
If a termination is found to be abusive, the employee is typically entitled to compensation, generally up to 6 months' salary. Swiss law does not usually provide for reinstatement of the employee in cases of abusive termination. Employees wishing to challenge a termination as abusive must typically object in writing to the employer before the end of the notice period and then pursue the claim through the courts if no agreement is reached.
