SWITZERLAND Law and Practice Contributed by: Philippe Nordmann, Marion Bähler, Christian Hagen, Samuel Lieberherr and Dario Glauser, Walder Wyss Ltd
ate termination of the employment, the (non-)exist - ence of good cause determines the further legal consequences of a termination with immediate effect, such as an additional penalty payment of up to six monthly salaries (in the case of an employer’s termination without good cause). While statutory law does not provide for severance payments, this may, in particular, be provided for in employment contracts or collective bargaining agree - ments (subject to the respective prohibition for mem - bers of the board of directors, the executive board and the advisory board, and persons close to them, of Swiss stock corporations whose shares are listed on a stock exchange). Termination Agreements As a matter of principle, the parties may agree on mutual termination of their employment relationship in a termination agreement. This, however, requires that such termination agreement is not concluded to circumvent statutory provisions protecting the employee’s interests (such as mandatory provisions in connection with incapacity for work due to illness or accident) but rather constitutes an actual “settle - ment”. It is against this background that respective termination agreements usually provide for an addi - tional “voluntary” severance payment that shall com - pensate the employee for fixing an exact termination date (the exclusion of any statutory prolongation of the employment in connection with an employee’s inca - pacity for work) and/or which shall compensate the employee for waiving their potential claim to an addi - tional penalty payment in view of an abusive termi - nation. Non-compliance with the “actual settlement” requirement leads to the entire termination agreement being declared null and void. Collective Redundancies Procedural rules to be followed The termination of a certain minimum number of employees (ten at the very least) within 30 days, and for reasons not pertaining personally to the affected employees (ie, collective redundancies), is subject to specific procedural requirements. Most importantly: • an employer may not decide to carry out collective redundancies before having informed the works
council or (in the absence of such a works council) the employees in writing (including a copy sent to the cantonal employment office) and having con - sulted with them; • in connection with such consultation, the employer must at least provide the works council or the employees the opportunity to formulate (non-bind - ing) proposals on how to avoid redundancies, limit their number and/or mitigate their consequences within a set deadline of (in standard cases) approx - imately two weeks (otherwise, any respective ter - mination would qualify as abusive and entitle each affected employee to a penalty claim of up to two monthly salaries); • the employer must notify the cantonal employment office about the results of the consultation and provide it with further appropriate information in writing (including a copy sent to the works council or the employees); and • no individual employment relationship eventually terminated in the course of collective redundancies may end until at least 30 days after such notifica - Only employers normally employing at least 250 employees and intending to make at least 30 employ - ees redundant within 30 days for reasons not pertain - ing personally to the affected employees are obliged to negotiate a social plan (ie, an agreement setting out measures to avoid redundancies, to reduce their number and to mitigate their consequences) with the works council or (in the absence of such a works council) the employees. If the employer fails to reach an agreement with the works council or the employ - ees, the social plan will be issued by an arbitral tri - bunal. 4.5 Employee Representations Optional Constitution of a Works Council According to the Federal Participation Act, employees of a Swiss employer with a head count of at least 50 are entitled (but not obliged) to constitute a works council. At the request of 20% of the employees (or at the request of 100 employees of an employer with a head count of more than 500), an anonymous vote must be held to determine whether the majority of the tion of the cantonal employment office. Employer’s duty to issue a social plan
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