Who can terminate an employment contract wrongfully?
Terminations by both employees and employers can be abusive if one of the conditions of Art. 336 para. 1 CO is fulfilled. In practice, employees and hardly ever employers invoke the unfairness of a termination.
Terminations by the employer alone can be abusive if one of the conditions of Art. 336 para. 2 CO is fulfilled.
When is a termination wrongful?
A termination because of a characteristic that the other party is entitled to by virtue of his or her personality can be abusive if this characteristic is not related to the employment relationship or significantly impairs cooperation in the company.
Characteristics of a party by virtue of his or her personality may be gender, marital status, pregnancy, illness, disability, sexual orientation, nationality, colour, religion, belief, criminal record, etc.
If there is a sufficient connection between such a characteristic and the employment relationship, the dismissal is not abusive. When such a sufficient connection exists is assessed on the basis of the specific circumstances of the individual case. Such a connection may exist, for example, if an illness impairs the ability to work. In this case, a dismissal after the expiry of the blocking period is not abusive. Dismissals on the grounds of gender or marital status are subject to the Gender Equality Act.
If the characteristic impairs cooperation in the company (working atmosphere), the dismissal is not abusive. When this is the case must be assessed on the basis of the specific case. Employers have a duty of care to intervene in order to protect the personality of other employees.
Exercising constitutional rights
A dismissal because the other party is exercising a constitutional right may be abusive, provided that exercising the right does not violate any duty arising from the employment relationship or does not significantly impair cooperation within the company.
Constitutional rights are essentially the fundamental rights under the Federal Constitution, the cantonal constitutions or the ECHR, e.g. freedom of belief and conscience, freedom of expression and information, freedom of association and association.
The exercise of such rights may be limited by the duty of loyalty. Criticism of the employer may be permissible under freedom of expression, but may violate the duty of loyalty.
If the exercise of rights violates a contractual obligation or impairs cooperation in the company, this may result in the termination not being abusive. The specific circumstances of the individual case are decisive.
Preventing the accrual of claims
A notice of termination that is given exclusively to thwart the accrual of claims of the other party arising from the employment relationship is abusive.
It is essentially a matter of thwarting special claims connected with the employment relationship (e.g. gratuity, bonus, continued payment of wages in the event of an impending operation, etc.).
Only terminations that “exclusively” aim at thwarting claims are abusive. The requirements are therefore very high. However, proximity in time and the absence of other valid reasons for termination can speak in favour of unfairness.
Assertion of claims (retaliatory termination)
If the termination is made because the other party asserts claims arising from the employment relationship in good faith, it may be abusive.
Claims arising from the employment relationship are, for example, the assertion of wage claims, the insistence on health protection or generally the fulfilment of duties arising from the employment relationship.
The claimant must act in good faith. It is therefore not necessary that the asserted claim actually exists, it is sufficient that the person concerned had good reasons for asserting the claim.
Difficult delimitation issues may arise if the employee claims a breach of the duty of loyalty by the employer and is terminated as a result. When and whether and how grievances in the workplace can be reported to external bodies also raises difficult delimitation issues.
The assertion of claims must be causal for the decision to terminate the employment. If there are other reasons for termination in addition to the assertion of claims, the assertion of claims must have been the main reason for the termination. If this is not the case, the termination is not abusive.
If at the same time an offence under the Gender Equality Act has been committed, the provisions of the Gender Equality Act take precedence.
Performance of compulsory service
A dismissal may be abusive if it is given because the other party is performing compulsory Swiss military or protective service or Swiss civilian service or is performing a statutory duty not voluntarily assumed.
Only service assignments that were not assumed voluntarily are eligible. This also includes promotion services and the period of service of those serving in the military. Due to the bilateral treaties with the EU, EU nationals can also invoke this for involuntary service to be performed in their home country.
What falls under involuntary statutory duties is specified in practice (answering questions in a police interrogation, testifying as a witness, etc.).
Trade union membership
A dismissal by the employer is abusive if it is made because the employee belongs or does not belong to an employee association or is lawfully exercising trade union activity.
The lawful exercise of trade union activity includes, for example, the recruitment of new members, participation in general meetings and the right to strike. If the conditions for strike action are not met, the strike is unlawful and dismissal for participation is not abusive.
While an employee is an elected employee representative in a company or in an institution affiliated to the company, a dismissal by the employer is abusive. In the event of a transfer of a business unit, the protection of the employee representative continues for as long as the mandate would have lasted if the employment relationship had not been transferred.
If the dismissal is for objective reasons (e.g. bad business, poor performance, etc.), it is not abusive. The employer must prove this circumstance.
If the employee representation or, if there is no such representation, the employees, is not consulted in the case of a mass dismissal, dismissals by the employer are abusive. Only dismissals made in the context of a collective dismissal are affected. Dismissals for other reasons are not covered.
Employers must follow the procedure for consulting employees in the event of a mass dismissal, otherwise they run the risk of abusive dismissals. Even belated consultation of employees can result in abusive dismissal. Caution should also be exercised when making media announcements about a planned mass dismissal.
The protection of Art. 336 CO already begins at the start of the probationary period or at the start of the employment relationship.
What can be achieved?
The law provides for a penalty payment of up to six months’ salary for an abusive termination, which is determined by the judge taking into account all the circumstances. In addition, damages may be due under another legal title. If the parties agree to continue the employment relationship, the entitlement to the penalty payment lapses.
The circumstances determining the amount of the penalty payment are, for example, the duration of the employment relationship, the severity of the abuse, the economic circumstances of the parties, etc. The shorter the employment relationship, the lower the compensation. The higher the compensation should be, the higher the requirements. The courts are conservative and rarely award the maximum possible amount.
The penalty for abusive collective dismissal is a maximum of two months’ salary. If the parties agree to continue the employment relationship, the penalty is still owed.
Reinstatement cannot be obtained. The termination may be unfair, but the employment relationship is deemed terminated and ends as a result of the termination. However, the parties may agree to continue the employment relationship.
An exception exists in the area of application of the Equality Act, where under certain circumstances there may be a right to reinstatement for the duration of the proceedings (Art. 10 para. 3 GlG).
What must the terminated party do?
Reasons for the termination
The party who has been terminated should request a written statement of the reasons for the termination from the other party. The reasons may indicate whether the termination was abusive or not. The terminating party is therefore advised to be particularly careful when formulating the reasons for termination.
The terminated party must file a written objection to the termination with the terminating party by the end of the notice period. There are no strict requirements for the objection. For reasons of proof, it is advisable to send the objection by registered mail or to have the receipt confirmed in writing upon delivery.
Agreement or legal action
If the parties can neither agree on a continuation of the employment relationship nor on a financial compensation, the dismissed party must initiate legal proceedings before the competent court within 180 days to claim the penalty compensation.
Which deadlines must be observed?
The objection to the termination must be received by the other party before the expiry of the notice period. It is not sufficient to post it on the last day of the notice period. If this deadline is missed, the claim is forfeited.
If compensation is to be claimed in court, the claim must be filed with the competent conciliation authority within 180 days (not six months). If this deadline is missed, the claim is forfeited.
Untimely termination and termination without notice
If an abusive termination by the employer is at the same time untimely, i.e. during an ongoing blocking period, the termination is null and void and no penalty compensation is owed under Art. 336a CO.
When a termination without notice occurs without good cause and is abusive at the same time, the employee is only entitled to compensation for the unjustified dismissal without notice according to the case law of the Federal Supreme Court. However, the simultaneous abusiveness is taken into account when assessing the compensation.
Burden of proof
The party claiming the unfairness of a termination must also prove the unfairness. In particular, the causal connection between the facts of the abuse and the termination must be proven.
As a rule, the courts are content with the standard of proof of high probability for internal facts (motives). Reasons for the termination given after the fact, refusal to give reasons for the termination, false or obviously pretextual reasons are considered as circumstantial evidence of abusiveness.
The other party is free to show and prove the existence of another reason for the termination. If it succeeds in doing so, the proof of unfairness may fail. In such a situation, it is up to the terminated party to prove that the abusive motive for termination predominates or was decisive.