Switzerland
Wrongful termination (case law)
Impact date: 3 March 2026 The Federal Supreme Court considered whether an employee’s dismissal amounted to a “retaliatory termination” under Article 336 of the Swiss Code of Obligations. The employee argued that he had been dismissed either because he had asserted rights connected to a bonus scheme or in order to prevent future bonus-related claims from arising.
The court upheld the cantonal court’s decision and found that the dismissal was not wrongful. It concluded that the termination was primarily caused by a breakdown in the relationship of trust between the employee and the CEO, which constituted a legitimate business reason for ending the employment relationship.
Employer implications/action needed The decision confirms that employers may lawfully terminate employment where there is evidence of a genuine and documented breakdown in trust or working relationships, even where the employee has raised contractual or compensation-related claims. However, employers should ensure that they can demonstrate a legitimate and non-retaliatory reason for dismissal, particularly where disputes over bonuses, pay or other statutory or contractual rights are ongoing.
Employer risk Employers may face claims for wrongful termination if dismissals occur shortly after an employee asserts employment-related rights, unless there is clear evidence of an independent and legitimate reason for the termination. Careful documentation of performance, conduct or relationship issues remains important in defending such claims.
Extension of the minimum duration of compensation for reduced working hours (“RHT”)
Impact date: Currently applicable until 31 January 2027 Reduced working hours is defined as a temporary total or partial reduction in a company's operations, during which contractual employment relationships remain in force. Such reductions are generally driven by economic circumstances.
The Federal Council has decided to further extend the maximum entitlement period for reduced working hours compensation benefits, which currently stands at 24 months rather than the standard 12 months. This extension will remain in effect until 31 January 2027.
Employer implications/action needed The employer must maintain a system for recording the working time of employees affected by reduced working hours (e.g., time cards, timesheets, or electronic time-recording systems) in order to provide a daily account of hours worked, including any overtime, working hours lost due to economic factors, and all other forms of absence, such as annual leave, absences due to illness or accident, and periods of military service.
Employer risk N/A
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