termination of employment in Switzerland: laws & severance policies

Legal Grounds for Termination of Employment in Switzerland

In Switzerland, employment is typically at-will, allowing either employers or employees to terminate the job at any time. However, terminations usually require valid reasons. An employee can be fairly terminated for one of the following grounds:

 
• Economic or operational needs leading to redundancy.
 
• Performance issues or inability to meet job requirements.
 
• Misconduct or violation of company policies.
 
• Reorganization or restructuring within the company.

• Mutual agreement to end the employment relationship.

Employment Laws and Severance Policies in Switzerland

Notice Period in Switzerland

During the probationary period, a seven-day notice is required for termination. After the probationary period, the minimum notice period is 30 days, which increases based on the length of employment:

Employers must provide written notice upon request. Immediate termination without notice is only permissible in cases of serious misconduct.

Severance Pay in Switzerland

There is no general statutory requirement for severance pay upon termination. However, employees over 50 years old with at least 20 years of service are entitled to severance pay ranging from two to eight months' salary. Occupational pension benefits may be deducted from this amount.

Probation Period in Switzerland

In Switzerland, probationary periods should not exceed three months. Unless the employment agreement specifies differently, an employee's trial period is limited to the first month of their employment.  During this period, employment can be terminated with a seven-day notice.

Process for Ending Employment in Switzerland

 
• Review the Employment Contract: Check the terms of termination, including notice periods.
 
• Provide Notice: Deliver a written termination notice as per legal requirements.
 
• Settle Final Accounts: Pay outstanding wages, unused vacation, and bonuses.
 
• Conduct Exit Procedures: Collect company property and issue necessary documents.

Employee Rights During Termination in Switzerland

Unfair Dismissal Protections

Swiss law prohibits abusive dismissals based on personal characteristics, exercising constitutional rights, or retaliation. Employees wrongfully dismissed may claim up to six months' salary in compensation.

Grievance Procedures

While not legally mandated, internal grievance procedures help resolve disputes and prevent legal escalation.

Final Pay and Benefits

Employers must settle final wages, including unpaid salary, unused leave, and bonuses, by the end of employment unless otherwise agreed.

What Termination Documentation Is Required by Law?

Employers must provide the following documents upon termination:

 
• Termination Letter: Specifies the employment end date.
 
• Work Certificate: Outlines employment duration and performance.
 
• Final Payslip: Details the final salary and deductions.
 
• Social Insurance Documentation: Information on social security contributions.

How to Stay Compliant as An Employer in Switzerland

Expanding your workforce across international borders is an exciting step, but it can be a logistical nightmare to hire and pay employees in different countries. And if you need to terminate employment, it’s critical to adhere to local compliance laws. That’s the advantage of using a trusted Employer of Record like Playroll. They can:‍

• ‍Handle international compliance: Different countries each have their own federal and local laws governing employee rights. An EOR helps ensure that you are compliant with the unique set of laws for any country in which your company operates. 
• ‍Run payroll for your global team: An EOR will act as your payroll provider, paying your employees on your behalf in the local currency. The company will also have in-depth knowledge of local tax codes, regulatory practices, and everything else that goes into managing global payroll.
• ‍Scale your team anywhere: Legally hire and swiftly onboard new hires in 180+ regions without the need for entity set-up by leveraging Playroll's infrastructure, so you can freely explore new markets and focus on growth.