Wrongful Dismissal

Wrongful Dismissal in Switzerland

Faced with a dismissal, many employees in Switzerland wonder whether they were dismissed under lawful conditions or whether their situation constitutes wrongful dismissal. This complex question requires an in-depth understanding of the Swiss legal framework, which differs significantly from the legislation of neighbouring countries. Swiss law recognises the principle of freedom of contract, allowing the employer to terminate the employment contract under certain conditions, while protecting employees against wrongful dismissals. Our law firm, specialising in employment law, assists employees and employers daily in these delicate situations, where the line between ordinary and wrongful dismissal can prove particularly thin.

Legal Framework for Dismissal in Swiss Law

Swiss employment law rests on a subtle balance between freedom of contract and employee protection. Unlike other European countries, Switzerland practises what is known as a system of "freedom of termination" of employment contracts. This fundamental principle means that an employer may, in theory, end an employment relationship without having to justify their decision by particular grounds.

This freedom of termination is governed by several statutory provisions, notably articles 335 to 337 of the Code of Obligations. These articles define the terms of ordinary termination of the employment contract, including the notice periods to be observed according to the employee's seniority:

• During the probationary period: 7 days
• During the first year of service: 1 month
• From the 2nd to the 9th year of service: 2 months
• From the 10th year of service: 3 months

However, this freedom is not absolute. Article 336 of the Code of Obligations defines the cases where a dismissal may be qualified as wrongful. This provision constitutes a fundamental limit on the employer's power and offers legal protection to the employee.

Protection Against Dismissal at Inopportune Times

In addition to the provisions on wrongful dismissal, article 336c CO establishes protection periods during which an employer may not dismiss an employee. These periods concern in particular:

• Periods of military or civil defence service
• Periods of total or partial incapacity for work resulting from illness or accident
• Pregnancy and the 16 weeks following delivery

A notice served during these periods is considered void. If the notice was given before the start of such a period, the notice period is suspended and only resumes after the end of the protection period.

Criteria for Qualifying a Dismissal as Wrongful

Article 336 of the Code of Obligations enumerates in a non-exhaustive manner the situations in which a dismissal may be considered wrongful. This list serves as an analytical framework for courts when they must rule on the nature of a contested dismissal.

Unlawful Personal Grounds

A dismissal is considered wrongful when it is pronounced on the basis of a personal characteristic of the employee that has no connection with the employment relationship or that does not significantly affect collaboration within the company. These characteristics may include:

• Race, ethnic origin or nationality
• Sex, sexual orientation or gender identity
• Political or religious convictions
• Trade union membership

Exercise of a Constitutional Right

The dismissal is deemed wrongful if it occurs because the employee exercises a constitutional right, such as freedom of association or freedom of expression. This includes in particular the right to join a trade union and to participate in lawful trade union activities.

Preventing the Vesting of Legal Claims

A notice given with the aim of preventing the vesting of legal claims arising from the employment contract is considered wrongful. For example, an employer who dismisses an employee just before they reach a seniority threshold entitling them to certain benefits commits an abuse of rights.

Retaliation Following a Good Faith Complaint

The dismissal is wrongful when it constitutes a retaliatory measure against an employee who, in good faith, raised grievances or complaints against their employer. This protection aims to ensure that employees can exercise their rights without fear of negative consequences for their employment.

The case law of the Federal Supreme Court has progressively expanded this list to include other situations not expressly mentioned in the law, such as dismissal motivated by legitimate whistleblowing or notice given in a particularly brutal or humiliating manner.

Procedure for Contesting a Wrongful Dismissal

Asserting one's rights in the event of a potentially wrongful dismissal requires observing a strict procedure and mandatory deadlines. This process involves several essential steps that every employee must know in order to preserve their chances of obtaining redress.

Opposition to the Dismissal

The first step consists of formally opposing the dismissal. This opposition must be expressed in writing before the end of the notice period. Although this step is not mandatory for the subsequent procedure, it allows one's disagreement to be clearly manifested and may constitute a useful piece of evidence.

Deadlines to Observe

To judicially contest a wrongful dismissal, the employee must necessarily bring legal proceedings within 180 days of the end of the employment relationship. This deadline is mandatory: once expired, the right to act is permanently lost, whatever the circumstances.

Before any legal action, an attempt at conciliation before the competent authority is mandatory. This preliminary phase aims to find an amicable agreement between the parties. The conciliation authority varies by canton: it may be an employment tribunal, a conciliation commission or a justice of the peace.

Burden of Proof

In disputes relating to wrongful dismissals, the burden of proof is distributed between the parties according to precise rules:

• The employee must establish the facts that allow the wrongful nature of the dismissal to be presumed
• The employer must then prove the existence of justified and non-wrongful grounds for the dismissal

This distribution of the burden of proof can prove delicate in practice. The collection of tangible evidence (emails, testimonies, internal documents) plays a determining role in the outcome of the procedure.

Role of Our Law Firm

In this complex procedural context, the assistance of a lawyer specialising in employment law often proves decisive. Our firm intervenes at all stages of the procedure:

• Preliminary analysis of the situation and assessment of the chances of success
• Drafting of the opposition to the dismissal
• Preparation of the file for conciliation
• Representation before the courts if necessary
• Negotiation of an advantageous settlement

Consequences and Compensation for Wrongful Dismissal

Unlike other legal systems, Swiss law does not provide for reinstatement of the employee in the event of wrongful dismissal. The main sanction consists of a financial indemnity, the amount of which is determined by the judge according to various circumstances.

Capping of the Indemnity

Article 336a of the Code of Obligations sets a cap on the indemnity for wrongful dismissal, which may not exceed six months' salary. This amount constitutes a statutory maximum, not an automatic indemnity. In practice, courts determine the amount by taking into account:

• The seriousness of the infringement of the employee's personality rights
• The degree of fault of the employer
• The duration of the employment relationship
• The economic and social situation of the parties
• The consequences of the dismissal for the employee

Judicial statistics show that the average indemnity awarded generally falls between two and three months' salary, rarely reaching the statutory maximum of six months.

Additional Compensation

In addition to the wrongful dismissal indemnity, other financial claims may be made:

• Damages for material loss suffered (for example, job search costs)
• Compensation for moral harm in the event of a particularly serious infringement of personality
• Payment of salary until the expiry of the notice period in the event of unjustified immediate dismissal

These additional indemnities are not subject to the six months' salary cap and may significantly increase the total amount of compensation.

Tax and Social Insurance Aspects

The tax and social treatment of wrongful dismissal indemnities merits particular attention:

• The indemnity is generally subject to income tax
• It is considered income subject to social contributions (AHV/IV/EO)
• It may affect entitlement to unemployment benefits if not correctly declared

Adequate planning and precise formulation of the settlement agreement or judgment can optimise the tax and social treatment of these indemnities.

Recent Developments and Current Practices in Wrongful Dismissal

The case law on wrongful dismissal is constantly evolving, reflecting changes in the world of work and emerging new issues. These recent developments are progressively modifying the application of existing statutory provisions.

Enhanced Protection Against Retaliation

Swiss courts have progressively reinforced the protection of whistleblowers against retaliatory dismissals. Recent Federal Supreme Court case law has clarified the conditions under which an employee may report irregularities without exposing themselves to wrongful dismissal:

• The report must first be addressed to the employer, unless this avenue appears manifestly ineffective
• Referral to the authorities is legitimate only in the event of inaction by the employer
• Public disclosure constitutes the last resort, justifiable only in exceptional circumstances

Impact of Digital Technology on Employment Relationships

The growing use of digital technologies in the professional context raises new legal questions in the area of wrongful dismissal:

• Dismissals linked to employees' use of social media
• Electronic monitoring of workers and statutory limits
• Protection of personal and professional data

These issues are the subject of developing case law, where courts seek to establish a balance between the employer's prerogatives and the fundamental rights of employees.

Preventive Practices for Employers

Faced with the risk of contestation, many companies adopt preventive practices aimed at legally securing their dismissal decisions:

• Systematic documentation of professional shortcomings
• Implementation of formalised warning procedures
• Pre-dismissal interviews with written minutes
• Training of HR managers in the legal aspects of dismissal

These preventive measures, although not mandatory under Swiss law, constitute good practices that our law firm regularly recommends to its employer clients.

Personalised Legal Support

In this complex and evolving legal context, our law firm offers assistance adapted to the contemporary issues of wrongful dismissal. Our experts in Swiss employment law offer:

• Legal analyses taking account of the latest developments in case law
• Negotiation strategies adapted to the profile of each case
• Effective representation before judicial and administrative bodies
• Preventive advice to secure employment relationships

This comprehensive approach allows situations of dismissal to be approached with confidence, whether contesting a potentially wrongful dismissal or securing a termination procedure from the employer's perspective.

Table: Key Indemnities and Deadlines for Wrongful Dismissal

Checklist: What to Do in the Event of a Potentially Wrongful Dismissal

• Document immediately: emails, warnings, testimonies, HR file
• Check whether you are in a protection period (illness, pregnancy, military service)
• Lodge a written opposition before the end of the notice period
• Consult a specialist lawyer in Geneva or Lausanne upon receipt of the notice
• Refer the matter to the conciliation authority within 180 days of the end of the contract
• Preserve evidence of material loss (rejected job applications, training costs)
• Verify the tax treatment of the indemnity (AHV/IV/EO, income tax)

Frequently Asked Questions on Wrongful Dismissal