– October 12, 2022

Termination without notice

I am the manager of an SME. At the moment, the work situation with one of our employees is very difficult. When and under what conditions is a termination without notice possible?

In Switzerland, termination without notice is possible for both parties to the employment contract under certain conditions. However, if the termination without notice was not justified, this can have far-reaching consequences.


Form of termination

As with ordinary termination at the end of a period, extraordinary termination without notice is a unilateral declaration of intent. Although the other party does not have to agree to the termination, the termination must be received, which is why the receipt of the termination by the terminating party must be proven. If the notice of termination is given orally, the terminated party should be requested to confirm its receipt in writing. If the terminated party refuses to sign the oral termination without notice, the termination without notice must be served immediately by registered mail. In addition, the termination of the employment contract without notice must be substantiated in writing if this is requested by one of the parties.


End of the employment relationship after termination without notice

As the name suggests, in the case of termination without notice there is no further period during which the employment relationship remains in force. The employee leaves the company on the same day and the employment relationship is deemed to have ended.


Termination without notice by the employer

Pursuant to Art. 337 CO, a lawful termination without notice requires the existence of good cause. This is given if the employer or employee can no longer be expected to continue the employment relationship in good faith.

Such reasons can be, for example, the commission of criminal offences at the workplace, betrayal of business secrets or working time fraud etc. Less serious misconduct, such as repeated lateness, one-time non-attendance without a report or certificate, violation of employer’s instructions, etc., may also lead to termination without notice, but in these cases a warning is required beforehand. For reasons of evidence, it is strongly recommended to record the warning(s) in writing.

The existence of an important reason implies, as already explained, that it is no longer reasonable for the employer to continue the employment relationship. Therefore, the employer must give immediate notice of termination after a (repeated) incident, i.e. within two to three days, otherwise the right to terminate without notice is forfeited. This period may vary depending on the size of the company.


Compensation after summary dismissal

If a termination without notice is legally given, there is no right to compensation for the employee. If the termination without notice was unjustified, the employee may assert the following claims under Art. 337c CO:

  • The employee is entitled to the wages he lost during the period of his notice. This also includes the amounts he would have saved by the termination (e.g. by not having to travel to work), what he earned through other work or deliberately failed to earn.
  • If the employee has not had enough time to take holidays by the end of the ordinary notice period, he or she is entitled to holiday compensation.
  • The employer may also be required by the judge to pay compensation, which, according to Art. 337c para. 3 CO, is determined at the employer’s discretion, taking into account all the circumstances. It may not exceed six times the employee’s salary.


Termination without notice by the employee

Employees can also terminate their employment without notice if there is good cause, so the requirements are basically the same as for employers.

Frequent incidents that lead to summary dismissal by the employee are personality violations and wage arrears.

If it turns out that the termination without notice was justified, the employer owes the employee compensation for the lost wages and, in rare cases, additional satisfaction, but no compensation.

If this summary dismissal was unjustified by the employee or if the employee left the workplace without permission, the employer is entitled to compensation. This amounts to a quarter of the monthly salary and must be claimed within one month, otherwise this claim lapses; exception: If there are still wage claims on the part of the employee, the 25% of the compensation owed can also be offset by the employer after the 30 days have expired.

In addition, there is a possible compensation for damages on the basis of Art. 337d CO, if demonstrable damage has occurred due to the unjustified termination without notice.

It can therefore be stated that in your case it should be ascertained whether there is a weighty reason that would justify termination without notice. Otherwise, the dismissal could have serious consequences. To avoid this, we recommend that you seek advice from a lawyer.