Under Swiss employment law, termination with immediate effect is an exceptional measure that brings the employment relationship to an instant end, without waiting for the ordinary period of notice to expire.
Because of its severity, this abrupt termination is subject to particularly strict substantive conditions and may occur only in well-defined circumstances.
The requirement of good cause and the breakdown of trust
For dismissal with immediate effect to be held valid, the statute requires good cause that makes continuation of the employment contract intolerable:
- The destruction of the relationship of trust: Good cause is any circumstance which, under the rules of good faith, no longer allows the employer to be required to continue the employment relationship, even until the end of the ordinary notice period; the measure must respect the principle of proportionality and may be used only as a last resort (ultima ratio) where no milder measure is possible.
- The seriousness of the breaches: Dismissal with immediate effect without a prior warning presupposes a particularly serious breach by the employee (for example criminal acts, acts of unfair competition or a persistent refusal to perform the work); if the breach of contractual duties or of the duty of loyalty is less serious, it justifies immediate dismissal only if it has been repeated despite a formal warning coupled with a clear threat of termination with immediate effect.
The immediate reaction and the consequences if the dismissal is held invalid
Besides the seriousness of the facts alleged, the validity of immediate notice depends on compliance with time requirements and gives the employee specific rights if it is irregular:
- Compliance with the time for reaction: As soon as the employer has reliable knowledge of the good cause, he must give notice of termination with immediate effect without unjustified delay (the case law generally allowing a short period for reflection of two to three working days); if he does not react promptly, he is presumed to have considered continuation of the employment relationship tolerable, and the right to dismiss with immediate effect is forfeited.
- The effects of an unjustified dismissal: Non-culpable prevention from working (in particular by reason of illness) can in no case constitute good cause for immediate dismissal; where the court holds that the dismissal with immediate effect lacks good cause, the employee is entitled to what he would have earned until the end of the ordinary notice period (after deduction of income from other work), and to a punitive indemnity of up to six months’ salary.
It departs from the ordinary notice period. Absence due to illness falls instead under the protection period, and is not good cause.
Legal sources
Federal legislation:
- Art. 337 CO (notion of good cause for termination with immediate effect, assessment by the court and exclusion of non-culpable prevention from working)
- Art. 337c CO (financial effects and an indemnity of up to six months’ salary where termination with immediate effect is unjustified)
Federal case law:
- BGE 130 III 28 (requirement of a particularly serious breach or of repeated failures despite a formal warning in order to justify dismissal with immediate effect)
- Federal Supreme Court judgment 4A_56/2016 (criterion of the breakdown of the relationship of trust under the rules of good faith, and the court’s discretion)
- Federal Supreme Court judgment 4C.345/2001 (requirement that termination with immediate effect be notified without delay once the facts are known, failing which the right is forfeited)
- Federal Supreme Court judgment 4A_521/2016 (inadmissibility of immediate notice based on an absence due to non-culpable medical incapacity for work)