What you need to know before hiring in Switzerland: A guide to terminations

Even before you make your first Swiss hire, it’s crucial to be aware of Switzerland’s laws surrounding terminating employees. Though it’s likely the furthest thing from your mind, not being aware of Switzerland’s employment laws and employees’ constitutional rights is the easiest way to end up in a legal dispute over wrongful termination.

In this guide, we’ll go over everything you need to know about terminations in Switzerland before hiring Swiss employees. We’ll also show you how hiring through an Employer of Record (EOR) will safeguard your business and protect you from misinterpreting or violating any local dismissal requirements. 

6 essential things to know before hiring in Switzerland

• The laws you follow when terminating an employee depend on the type of employment agreement you signed. In Switzerland, offer letters can be open-ended, fixed-term, or part-time/temporary. If a fixed-term contract is in place, generally, you cannot terminate it before the agreed-upon end date. The only exceptions to this rule are made for cases in which the language of the employment agreement allows both parties to terminate the job early or there has been a serious incident at the workplace that must be addressed. This is important to be aware of since many of the laws you might read about—here and elsewhere—typically apply to open-ended employment contracts.
• Swiss employment laws adhere to the principle of “freedom of termination.” In Switzerland, employers and employees may end an (open-ended) employment relationship at any time without giving a reason. However, Swiss employment laws protect workers from being let go for “abusive” reasons, i.e., wrongfully dismissed.
• You must give notice when you dismiss an employee. Employers are legally required to adhere to the statutory notice period required by law or, in cases where there is a collective bargaining agreement that sets forth different terms, the applicable notice period in said agreement.
• Employers only need to pay severance to employees over 50 who have been at the company for 20 or more years. Switzerland has no statutory redundancy pay or mandatory severance payment scheme in place. You are not required to give employees who fall outside this specific category severance pay. 
• If the employee gets hurt or falls ill during the notice period, it stops. Swiss employment laws protect employees from being dismissed while taking time off to recover from an accident or illness, even if you’ve already given them notice of your plans to terminate their employment. Once they’ve returned to work, the clock— so to speak—can resume.
• The probationary period is the only time an employee isn’t protected. Probationary periods, also known as trial periods, generally last one month in Switzerland. However, they’re occasionally extended to three months if the employer deems it necessary and is willing to put it into writing. It’s important to note that you must adhere to a minimum notice period when dismissing an employee who is still on probation.

Termination rules in Switzerland: What are acceptable grounds for firing an employee? 

Swiss employees are permitted to leave their jobs voluntarily for any reason, regardless of whether they are working or on sick leave. When they quit, however, they’ll be subject to a penalty period lasting anywhere between one and 60 days. During this penalty period, they will receive no unemployment benefits. It’s up to the cantonal unemployment office, not the employer, to decide how long the penalty period will be.

Employers may lawfully terminate an employee’s service at their company without giving a reason if they have an open-ended employment contract and adhere to the applicable notice period. However, an employee can still pursue a wrongful dismissal claim depending on the circumstances.

In Switzerland, when a unilateral decision is made to execute a termination of employment, the correct term to use is “ordinary termination.”

An ordinary termination will likely be considered unlawful in Switzerland if it is because of the following:

• A protected characteristic, like skin color or nationality
• Involuntary military service the employee has to perform
• Trade union activities or membership
• A constitutional right the employee has decided to exercise
• Claims the employee is asserting in good faith

Employees also cannot be terminated while they are elected representatives on the local works council or during protected periods, such as while pregnant or absent on maternity leave, or recovering from an accident or illness.

If your company is undergoing mass redundancies—generally defined as laying off ten or more employees (though that number might be lower depending on your canton), you must notify your cantonal employment office no later than the date the employees’ notice period starts. 

Switzerland’s termination requirements might differ from those in other countries where you hire, and it’s crucial to keep your global hiring compliant with local laws. 

What are the mandatory notice periods and termination pay for Swiss employees?

Swiss federal employment laws have set forth specific mandatory notice periods for dismissal. You must adhere to these unless there is a collective bargaining agreement or cantonal agreement in place that mandates a different applicable notice period; these agreements supersede the federal Swiss Code of Obligations and other labor laws. 

Remember that in Switzerland, it’s a good rule of thumb to familiarize yourself with federal employment laws but still double-check cantonal laws and the terms of collective bargaining agreements. 

Below is a table of federal statutory notice periods in Switzerland.