Switzerland Employment Guide

Navigating Employee Termination in Switzerland: A Guide for Global Employers

Terminating an employment contract in Switzerland requires careful navigation of a complex legal framework. The process must be handled collaboratively with key stakeholders and involves specific procedures and potential costs that vary depending on the circumstances. Ensuring compliance is paramount to avoid legal disputes.

Legally Compliant Termination Methods

Swiss law recognizes several valid grounds for ending an employment relationship. These include:

• Voluntary resignation by the employee.
• Mutual agreement between the employer and the employee.
• Unilateral termination by the employer, justified by:
  • Dismissal during the probationary period.
  • Termination for objective reasons, such as redundancy.
  • Dismissal on disciplinary grounds.
  • Termination due to unsatisfactory performance.
• Natural expiration of a fixed-term contract.

Prohibited Termination Scenarios

Certain situations render a termination legally invalid. Employers must be particularly cautious in the following cases:

• Terminating a fixed-term contract before its agreed end date.
• Dismissing an employee during a period of illness or accident. The law provides protection based on length of service:
  • 30 days during the first year of employment.
  • 90 days between the second and fifth years of service.
  • 180 days from the sixth year of service onwards.

In these protected periods, the employer must wait for the employee to return to work before issuing a termination. However, the employee retains the right to resign during this time.

Understanding Notice Periods

The statutory notice period in Switzerland is a minimum of one month, but it increases with an employee's tenure:

• 30 days after one year of service.
• 60 days for service between two and nine years.
• 90 days after ten or more years of service.

During the probationary period, a shorter notice period of seven calendar days applies for both parties.

Severance Pay Regulations

Swiss law does not mandate statutory severance pay for employees under the age of 50 or with less than 20 years of service with the same employer. During the notice period, employees are entitled to receive their standard salary. For instance, a company like SailGlobal would ensure all final payments, including any accrued vacation, are processed accurately and on time.