In Switzerland, the law stipulates minimum notice periods for both employers and employees when terminating an employment contract. These periods vary depending on the length of service an employee has accrued with the company.

Notice Periods as per Swiss Code of Obligations

The Swiss Code of Obligations outlines the following notice periods based on an employee's tenure:

• First Year of Service: One month's notice period, starting at the end of the month the notice is served.
• Second to Ninth Year of Service: Two months' notice period, starting at the end of the month the notice is served.
• Tenth Year of Service and Over: Three months' notice period, starting at the end of the month the notice is served.

It's important to note that the notice period must end on the last day of the month. For example, if an employee is given notice on June 15th during their first year, their employment will officially terminate on July 31st.

Exceptions to Statutory Notice Periods

While the statutory notice periods provide a baseline, there are exceptions:

• Collective Bargaining Agreements: These agreements may stipulate different notice periods, which can supersede the statutory ones. However, a collective agreement cannot reduce the notice period to less than one month during the first year of service.
• Individual Employment Contracts: Employment contracts can also define notice periods. If the contractual period is longer than the statutory minimum, the longer period applies to both the employer and the employee.

Probationary Period

A probationary period is common in Swiss employment contracts. During this initial period, both the employer and the employee can terminate the contract with a shorter notice period, typically seven days. The maximum probationary period is three months, and it can be waived altogether by mutual agreement.

In Switzerland, unlike many other countries, there isn't a general statutory severance pay scheme. However, under certain circumstances, an employee may be entitled to compensation upon termination of employment.

Legal Entitlement to Severance Pay

According to Swiss law, specifically Article 339b and 339c of the Swiss Code of Obligations (CO), severance pay is mandated under the following conditions:

• The employee is at least 50 years of age.
• The employee has worked for the company for a minimum of 20 years.
• The termination of the employment contract can be initiated by either the employer or the employee, with some exceptions such as termination due to employee fault.

Calculating Severance Pay

If the aforementioned conditions are met, the employee is entitled to severance pay as per the Code of Obligations (Art. 339c CO). This pay ranges from a minimum of two months' salary to a maximum of eight months' salary.

Contractual and Negotiated Severance Pay

It's worth noting that employment contracts or collective bargaining agreements can stipulate more generous severance pay arrangements. Furthermore, severance pay can be negotiated as part of a mutual termination agreement even if the legal entitlement criteria are not met.

No Entitlement in Other Circumstances

Employees who do not meet the age and length of service requirements, or who are terminated based on their own fault, are generally not entitled to severance pay in Switzerland.

Swiss labor law allows both employers and employees to terminate employment contracts at any time, generally without the need to justify the decision. However, there are specific processes that must be followed to ensure a legally compliant termination.

Ordinary Termination

Ordinary termination involves adhering to the notice periods outlined in an employee's contract, a collective bargaining agreement, or the statutory minimums as defined by the Swiss Code of Obligations (CO).

Key Steps for Ordinary Termination

1. Written Notice: The termination must be communicated in writing, either via a registered letter or a hand-delivered document with a confirmation of receipt.
2. Stating the Notice Period: The termination letter must clearly specify the applicable notice period.
3. Possibility to Request Written Reason: If the employee requests it, the terminating party (employer or employee) must provide a written explanation for the termination.

Termination with Immediate Effect (Extraordinary Termination)

In certain cases, either the employer or the employee can terminate the employment contract with immediate effect. This is known as extraordinary termination and requires the existence of just cause.

Just Cause Examples

• Serious breach of contractual obligations by either party
• Criminal acts committed by one party against the other during the course of employment
• Circumstances that render the continuation of the employment relationship untenable (e.g., serious harassment or discrimination)

Special Considerations

• Protection from Unfair Dismissal: Certain categories of employees receive special protection against termination, including employees who are pregnant, ill, injured, or performing mandatory military or civil service.
• Consultation Requirements: Collective bargaining agreements may require employers to consult with employee representatives before issuing terminations.

To ensure a legally compliant termination process, it's strongly recommended that employers:

• Review relevant employment contracts and collective bargaining agreements thoroughly.
• Document any performance issues or breaches of contract if they could be related to the termination.
• Consider seeking legal advice, especially in complex cases or when protected employee groups are involved.