SWITZERLAND Law and Practice Contributed by: Philippe Nordmann, Irène Suter-Sieber, Jonas Knechtli and Gustaf Heintz, Walder Wyss
to constitute a works council. At the request of 20% of the employees (or if demanded by 100 employees in a company with a headcount of more than 500), a vote must be held in order to determine whether the major - ity of those employees casting a vote are in favour of the suggested constitution of a works council. If a works council has been set up, management must provide it with all the information necessary to carry out its tasks properly. In particular, the employer must inform the works council at least once a year about the business performance and its effects on the employ - ment relationships. Swiss employment law provides for the information and consultation rights of the works council in spe - cific events. This applies to questions of occupational safety, the process of transfer of undertakings, and collective redundancy procedures. In rare cases, the works council even has a right of co-decision making or, in other words, a type of veto right over certain decisions made by management. The consequences of failing to involve the works council vary. For example, the dismissal of employ - ees in the context of collective redundancies without a proper consultation of the works council is valid but deemed abusive (see 7.1 Grounds for Termination and 8.1 Wrongful Dismissal ). 6.3 Collective Bargaining Agreements A CBA is a contract between the employer or an employers’ association and an employees’ associa - tion. The normative regulations become part of the indi - vidual employment contract. Those provisions are mandatory and are directly applicable to all employ - ees who benefit from a CBA by contract or by law. Unless they are beneficial to the employee, deviating clauses in employment contracts are invalid. Often, the participating employers also apply the CBA to non-organised employees. Furthermore, CBAs regu - larly contain contractual provisions that regulate the general obligations and rights of the parties to it, as well as the enforcement of the CBA.
Upon the request of a party to the CBA, the competent authorities may declare a CBA to be generally binding. The effect of this is that the CBA automatically applies to all employers and employees in a particular eco - nomic sector or profession, including the ones that do not belong to any association or are not even aware of the existence of the CBA. This procedure has a big practical impact: as of 1 May 2025, as many as 82 CBAs had been declared generally binding (45 on a national level and 37 on a cantonal level).
7. Termination 7.1 Grounds for Termination (Limited) Freedom of Termination
Ordinary terminations of employment (ie, terminations observing the applicable notice period) do not require a particular lawful reason, although the party giving notice must state its respective reasons in writing if the other party so requests. This is not least because the principle of freedom of termination is limited by the prohibition of terminations in bad faith (so-called “abusive” terminations; see 8.1 Wrongful Dismissal ). Collective Redundancies Collective redundancies (ie, the dismissal of a certain minimum number of employees within 30 days and for reasons which are unrelated to the person of the affected employee) are subject to specific procedural requirements. An employer may not decide to carry out collective redundancies before having informed (in writing and with a copy sent to the cantonal employ - ment office) and consulted the works council or (if there is none) the employees. In the context of such consultation, the employer must at least provide the opportunity to formulate (non-binding) proposals on how to avoid redundancies, limit their number and/ or mitigate their consequences, failing which any respective dismissal would qualify as abusive (see 8.1 Wrongful Dismissal ) and entitle each employee to a compensation claim of up to two monthly salaries. The minimum duration of such consultation depends on the circumstances of the individual case; for stand - ard cases, two weeks is a suitable point of reference. If the employer still intends to carry out collective redundancies after such consultation, they may take
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