Learn about the legal processes for employee termination and severance in Switzerland
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.
The Swiss Code of Obligations outlines the following notice periods based on an employee's tenure:
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.
While the statutory notice periods provide a baseline, there are exceptions:
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.
According to Swiss law, specifically Article 339b and 339c of the Swiss Code of Obligations (CO), severance pay is mandated under the following conditions:
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.
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.
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 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).
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.
To ensure a legally compliant termination process, it's strongly recommended that employers:
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