FAQ Mass Layoffs

By art. 335d of the code of obligations (CO ) mass layoffs are notices of termination given by the employer to employees of a business within 30 days for reasons not pertaining personally to the employees and which affect:

1. at least 10 employees in a business normally employing more than 20 and fewer than 100 employees;
2. at least 10% of the employees of a business normally employing at least 100 and fewer than 300 employees;
3. at least 30 employees in a business normally employing at least 300 employees.

Yes, the staff needs to be informed before the final decision is made. The employee representation committee, or if none exists the entire staff, needs to be consulted and given the opportunity to suggest alternatives to the layoff. A deadline of at least two weeks needs to be set and management must answer all questions regarding the measures and the consequences of the mass layoff for the concerned employees.

The management has to seriously examine the proposals from the staff. However, it does not have to implement them.

The employer notifies the cantonal employment office in writing of any intended mass layoff and forwards a copy of such notification to the organisation that represents the employees or, where there is none, to the employees themselves. Such notification must contain the results of the consultation with the organisation that represents the employees and all appropriate information regarding the intended mass layoff. .On request, the regional employment office does offer information about your entitlement to and the formal procedure to apply for unemployement benefits.

For companies with more than 250 employees who plan to lay off 30 or more employees within 30 days the management is obliged by art. 335i CO to  negotiate a social plan with the trade union if a collective labor agreement (CLA) exists. If no CLA exists, it must negotiate with the employee representation committee or in the absence of one, the affected staff. However, the trade union can offer support for the employees even without a CLA and with a mandate negociate a social plan with the employer. The social plan contains measures to avoid layoffs or to reduce their numbers and mitigate their effects. Typical elements can include financial severance packages, outplacement services or early retirement packages for older employees (see art. 335h CO).

If no agreement is found at the negotiation table, the court of arbitration will issue one by court order after hearing both sides (see art. 335j CO).

How are labor disputes usually handled in Switzerland? Which means do we have if we do not accept the outcome of the consultation?

Speaking generally, collective action can have impact on the outcomo. There are several options:

• Employees can stage a walkout for example in the form of an extended break.

• Dissent can be voiced through petitions, open letters and similar measures.

• Strikes are allowed if led by a trade union and authorized by a majority vote of all employees and if it fulfills all the legal criteria (e.g. all means of negotiation exhausted, strike as a ulitma ratio-measure, proportionality...).

As your union, we are happy to talk through the options with you and other solidary employees in a company announcing a mass layoff. It is important that any action is planned as a group.

As your trade union, syndicom can assist you and your colleagues in many ways:

• If there is a collective employment agreement (CEA) in place, we can formally negotiate the conditions of the layoff. Otherwise, this is the duty of the employee representation committee.

• Our members get legal advice and, after a waiting period of 3 months – get a legal representative. For example, if a dismissal is abusive or invalid, or if the layoff process was not properly followed, we will represent our members interests.

• We will assist with and help organize affected employees to fight against layoffs if you and your colleagues want this.

No. The protection against dismissal is not touched: Wrongful termination provisions apply in case of discriminatory reasons (see art. 336 CO, non-exhaustive list), for example due to membership in a trade union or employee committee, and so on. According to Swiss law, a wrongfully terminated employee will not be reinstated, however they can sue for up to 6 months of salary (courts practically never award the maximum compensation of 6 monthly salary).

If the corporation did not properly consult the staff, a court may award up to two months’ salary to a laid off person, that sues the corporation because of a wrongful termination according to art. 336 para. 2 let. c CO.  Please note: You would have to personally sue for this.

A termination received after your probation time during pregnancy is void. If the employer doesn't know you are pregnant, you should inform the company about this (possibly with a medical certificate), in order to clarify that the termination is void (in case of pregnancy by the time receiving the termination) or to extend your termination notice (in case the pregnancy began after receiving the termination during notification period). Pregnant women are protected by Swiss Law from termination during the pregnancy and the first 16 weeks following the birth (see art. 336c para. 1 let. c CO).

The duration of the continued payment of wages according to art. 324a CO does not necessarily coincide with the duration of the employment relationship or the triggered notice period. A pregnancy-related incapacity to work on the part of the employee triggers the same obligation on the part of the employer to continue to pay wages as illness, accident, fulfilment of statutory duties or the exercise of a public office. The 100% entitlement to continued payment of wages during a limited period of time depending on tenure (usually the Basel, Bern or Zurich scale) covers all these reasons for incapacity for work during a year of service together. There is no separate or additional continued salary payment for pregnancy-related incapacity to work.

Deviations from the legal solution are permitted if they are set out in writing or in a collective or standard employment contract and are at least equivalent for the employee.

A common deviation is the conclusion of a collective daily sickness benefit insurance. In this case, the continued payment of wages in the event of incapacity for work due to pregnancy is based on the insurance taken out (check how this point is regulated in your contract or personnel regulations). If the employee has compulsory insurance prescribed by law against the financial consequences of being prevented from working by personal circumstances for which he is not at fault, the employer is not obliged to pay his salary where the insurance benefits for that limited period cover at least four-fifths of the salary income lost over that period. Where the insurance benefits are less than four-fifths of the salary, the employer must pay the difference between them and four-fifths of the salary. Where the insurance benefits are paid only after a waiting period, the employer must pay at least four-fifths of the salary during that period (see Art. 323b CO).

If you are pregnant and you are still able to work, you have to offer to work. In this case the employer must assign work to you. If he does not do so, he is in default of payment according to Art. 324 CO and owes the salary.

If you are currently fully or partially off sick with a medical certificate and your probation time is over, you are protected for a legally mandated time and cannot be laid off. Any termination during the protected time is void. In your first year with your current employer, you are protected for 30 days. From the second to the fifth year, you are protected for 90 days and from the sixth year for 180 days (see art. 336c para 1 let. b and para 2).

On a case-by-case basis, the Swiss Federal Court qualified dismissals of older employees (55 years and older) as abusive within the meaning of art. 336 CO. The termination is still valid and employees, who worked for a long time in the company can sue for up to 6 months of salary. The discrimination must be proven by the employee. The legal basis of such a sue is the employer’s duty of care for their employees (according to art. 328 CO) and art. 336 CO.

We recommend only signing  documents you clearly understand after thoroughly checking its content . Companies sometimes offer a beneficial sounding mutual termination agreement, however by signing one, you will also waive some rights and some benefits from the unemployment insurance, if applicable.

You have the right to take a reflection period. The employer must offer you the time to think through any mutual agreement – you don’t have to decide on the spot. Consider reaching out to your union for advise, if you are a member, or otherwise seeking personal legal advice from a lawyer.

Yes, in an agreement they can impose a non-competition clause. On the other hand, in the event of termination by the employer without fault of the employee (e.g. mass layoff) according to art. 340c CO and the jurisprudence a non-competition clause may not be imposed. Non-competition clauses are typically enforced narrowly in Switzerland and only if the employer has a clear interest worth of protection.

The purpose of vacation is to recover. The easiest solution would be to takte it. A vacation balance does not necessarily have to be paid out. The employer may for example order compensation for vacation during the garden leave. Vacation credits must be drawn in particular if the duration of the garden leave greatly exceeds the vacation credits. As a rule of thumb according to the jurisprudence of the Swiss Federal Court, vacation may be compensated if the vacation does not exceed one third of the duration of the garden leave. However, the circumstances of each individual case must be taken into account. During the garden leave, the vacations are to be compensated in principle, provided that: 

• there is sufficient time to search for a new job. 
• there is sufficient time to plan vacations. 
• the employee does not have to remain at the employer's disposal.

If you waive compulsory rights  the unemployment insurance could reduce your benefits. According to the unemployment insurance law (AVIG in German) you have duties to mitigate damages. These include, that statutory entitlements may not be waived and, on the other hand that efforts must be made from the time of knowledge of impending unemployment to find a job again as soon as possible. The latter must be documented by job applications.

Furthermore, a termination agreement by mutual consent is according to AVIG qualified as self-termination. In the case of self-inflicted unemployment, the unemployment insurance can order the suspension of daily benefits for up to 60 days (art. 30 AVIG). In order to avoid suspension of daily benefits, the document must include a reason for termination (e.g. reason for illness including a medical certificate and explicit medical recommendation for termination of the employment or proven imminent reorganization) that cannot be interpreted as self-termination or self-inflicted termination.

In a termination agreement, a distinction must be made between salary benefits and additional compensation. On the one hand, because the statutory social security contributions must still be deducted from the salary. On the other hand, the unemployment insurance takes the salary declared in the termination agreement into account in full when determining benefits under the AVIG and might shorten your benefits. A severance payment is only taken into account if it exceeds CHF 148,200 (see SECO's AVIG practice, point B 122).

If contributions are made to the occupational pension fund (BVG / 2nd pillar) in an agreement in accordance with the applicable Social Plan, the unemployment insurance  may not offset up to CHF 88,200.-- when determining benefits under AVIG (art. 11a para. 3 AVIG in conjunction with art. 10b AVIV and art. 8 para. 1 BVG). Contributions to the occupational benefit scheme in excess of the tax-free amount are offset.

As far as the compulsory occupational pension scheme is concerned, the severance payment is to be considered as a component of the relevant AHV-salary in accordance with art. 7 paragraph 2 BVG, the severance payment is in principle also subject to pension contributions. Reserved are any contrary staff regulations.

The money in the pension fund will be transfered to the pension fund of your next employer  within Switzerland. If you have no gap in employment, your new employer’s pension fund will send you instructions. If you have a gap between your current and your next job, your money is typically parked on a vested benefits account. Do not forget to transfer your pension to the new pension fund once you have found a new job.

If you move abroad, what happens next depends on your new country of residence. We recommend having a look at the state’s vested benefits FAQ for details: aeis.ch/en/individuals/fzk-vested-benefits-accounts/cash-payout-due-emigration

Please note: If you lose your job, you are no longer insured with your employer's pension fund - the savings process is interrupted. This reduces the retirement assets. The extent of the loss varies from case to case. But one thing is clear: the longer unemployment lasts and the older a person is, the larger is the loss of savings.

Yes – anyone who has worked in Switzerland for more than 12 months has a right to get unemployment benefits, no matter their nationality.

• Go to the  unemployment office (RAV) responsible for your case. You can find the competent office at www.arbeit.swiss/secoalv/en/home/menue/stellensuchende/arbeitslos-was-tun-/anmeldung.html

• As soon as you know that your contract is terminated, you are  expected to start looking for a new job. Typically, the RAV will expect you to apply to 10-15 jobs per month from the date you know about being laid off. It is important to document these applications.

This is usually marked on the back of your physical permit card. When in doubt, we recommend asking the cantonal immigration authorities about your case.

The permit of EU/EFTA-citizens is not tied to their employer.

Non-EU/EFTA nationals usually have an L permit tied to their employer.

As an EU or EFTA citizen your right to remain in Switzerland is not tied to a particular job. You have a right to remain in Switzerland until your permit expires and you can request an extension (see below) as long as you are still receiving unemployment insurance. Your permit may be revoked if you are receiving “Sozialhilfe” (social aid), that is welfare payments beyond unemployment insurance, for a considerable amount of time. The amount of time depends on how long you were a Swiss resident.

Other information:

• L permit: You may remain in Switzerland for up to 6 months for searching a job. Depending on your situation, you may have to apply for this right. We recommend contacting the cantonal immigration office promptly to clarify your situation.

• B permit: In the event of involuntary termination of employment after the first twelve months of residence, the right of residence of holders of an EU/EFTA residence permit expires within six months after termination of employment. However, you will have to apply for a permit as a job-seeker with the cantonal migration authorities For employees who can claim unemployment benefit for more than six months, the right of residence expires six months after the end of this benefit. If your permit expires while you are unemployed and you still receive unemployment funds, you can apply for a permit extension, which will usually be granted.

You have to promptly inform the relevant immigration authorities. Failure to do so can lead to consequences such as permit revocation or refusal to renew the permit.

• If you have an L permit, which is usually tied to your employer, you will be asked to leave Switzerland on the last day of the permit’s validity. If you find a new job in Switzerland, your new employer will have to apply for a new permit for you.

• If you have  a B permit not tied to your employer, you will be allowed to switch to a new employer. Priority for Swiss/EU nationals (“Inländervorrang”) does not apply. Please confirm your status with the cantonal immigration office.

If your permit expires while you are unemployed and you still receive unemployment funds, you can apply for a permit extension, which will usually be granted.

Please note: This FAQ entry is based on our best knowledge, but we are not immigration specialists. Additionally, your personal situation as well as the practice of your cantonal immigration office will determine your next steps. We recommend you double check with them and a migration law specialist in your canton.

You can take up residence anywhere in Switzerland with a B permit. However, the change of canton must be applied for in advance at the migration authority of the new canton.

Change from employment to self-employment is subject to authorisation by the cantonal authorities. Non-EU citizens need a confirmation from the cantonal labor office that they are able to support themselves with a self-employment project, but this is needed only initially.

The settlement permit C is unlimited and is issued without conditions.

Those affected do not lose their status or permit if they become unemployed, regardless of whether their citizenship is from the EU or not.

However, if they are dependent on social assistance for a longer period of time and to a considerable extent,  the permit may be revoked .

If the integration criteria are not met including participation in economic life, that is, holding a job or being in education, the settlement permit can be replaced by a residence permit (so-called “Rückstufung”).

Depending on your personal situation, you may be eligible for an F permit (“Vorläufig Aufgenommene”). It is provisory and granted to those who cannot return.