Grounds for Termination
As a principle, both parties to an employment contract may terminate the employment agreement at any time, subject to either the statutory or contractual notice period; without the need to fulfill any statutory grounds for termination. The party issuing the termination must however provide a written explanation of the termination upon the other party’s request. Employees are, however, protected against abusive dismissal. In addition, protection against dismissal exists during pregnancy and for a period of 16 weeks following birth. A notice of termination given during such a protected period is null and void.
The Code of Obligations provides special rules regarding collective dismissals. Before a collective dismissal, the employer must inform or consult with the works council (if any) or the employees. Employers must also inform the cantonal labor office of every planned collective dismissal. Non-compliance with the procedural rules by the employer constitutes abusive termination of the affected employment, which may lead to the payment of damages and additional remunerations, and in the case of substantial non-compliance, the terminations can be found void and reinstatement ordered.
Employees have to be given notice of termination of their employment. The length of the notice period is agreed in the employment contract, subject to statutory rules on minimum length and equality of the notice periods for notice to be given by employer, and employee. An employment relationship can be terminated with immediate effect for cause.
Is severance pay required?
There are no statutory severance payment obligations. An obligation may, however, be provided by a collective agreement or by a social plan in case of collective redundancy.
Is a Separation Agreement required or considered best practice?
The termination of an employment relationship does not require a separation agreement. A separation agreement may, however, be advisable in order to amicably settle all mutual claims relating to the employment. Although the parties are free to terminate employment by mutual consent as per any day, separation agreement are considered valid by the Federal Supreme Court only if the terms of the agreement do not favor the employer without reasonable justification. It is noteworthy that the employee may not waive claims arising from mandatory provisions of law or the mandatory provisions of a collective employment contract by signing a separation agreement. A clause in separation agreement stating that the employee waives any and all accrued vacation entitlements may, therefore, be void.
Remedies for employee seeking to challenge wrongful termination
A wrongful termination must be challenged by the employee before expiration of the notice period by written communication to the employer. After the last day of employment, the employee has a 180 day deadline to submit a request for a conciliation hearing with the competent magistrate The employee can claim up to 6 months’ salary as indemnification in case of a wrongful or discriminatory termination.
Swiss labour law still lacks explicit labour law protection for whistleblowers despite political advances and government efforts. De lege lata, an employee must first turn to the employer’s internal departments to uncover grievances. Only if they do not react can the authorities or the public be informed. However, there is still no effective protection against dismissal. A dismissal as a result of a permissible disclosure of grievances would be abusive, but valid. The employer could be sanctioned by penalty of payment up to a maximum of 6 monthly salaries.