Short-time work and termination: how does that work?

Short-time work, Termination, Abusive dismissal, Mass redundancy

The COVID-19 pandemic and the measures prescribed by the Federal Council are putting many companies in a difficult economic situation. The impacts can be absorbed at least partially with short-time work. But what if short-time work is not enough and employment employees must be laid off?

In our FAQ you will find an overview of frequently asked questions.

 

Q: Can I give notice to an employee despite of short-time work?

A: Short-time work does not affect the Swiss principle of freedom of dismissal (Art. 335 para. 1 CO). This means that an employment relationship may still be terminated. Or in other words: the extraordinary situation due to the coronavirus does not justify an additional blocking period (so called “Sperrfrist”). If, on the other hand, an employee gets sick with the virus (through no fault of his own), the statutory blocking period must be observed (provided the conditions are met, see Art. 336c OR).

The prerequisite for short-time work compensation is that the employment relationship is unterminated. An employee whose employment relationship has already been terminated cannot claim short-time work compensation.

If the employment relationship is terminated by the employee or the employer during the period of short-time work, the entitlement to short-time work compensation does not apply for the duration of the notice period. The length of the notice period is primarily determined by the contractual agreement, but the statutory notice period applies in a subsidiary manner. The calculation of the notice period is calculated back. For example, if the notice period is three months and the notice is given on 12 May 2020, the notice period runs from 1 June to 31 August 2020.

 

Q: Is a termination during short-time work abusive?

A: In Switzerland, a termination may be abusive despite the freedom of dismissal Wrongful termination of employment relationships.

Prior to giving notice during short-time work, we recommend in particular that you check whether the employee concerned can be temporarily assigned to another division having enough work. In the case of older employees who have already been working in the company for a longer period of time, this check is even mandatory so that the dismissal is not considered abusive.

 

Q: May I terminate an employee who has refused to work reduced hours?

A: Short-time work requires the consent of the employees concerned. This makes sense, since they are forgoing part of their salaries. However, every employee is free to refuse short-time work and to demand the full contractually agreed salary from the employer.

A “revenge termination” (“Rachekündigung”) is given if the employment relationship is terminated because one party asserts claims arising from the employment relationship in good faith. If an employee who does not agree to short-time work and demands his full contractual salary, is dismissed, the question arises whether this dismissal is abusive (see Wrongful termination of employment relationships). The assessment requires case-by-case consideration. The reasons for termination will usually be economic reasons. We recommend to analyse the situation in each case prior to giving notice of termination.

The same applies if a particularly vulnerable employee has to be terminated that has previously refused assigned work in accordance with Art. 10c para. 6 COVID-19 Ordinance 2.

 

Q: What claims do I have in case of termination?

A: If an employee has agreed to short-time work and is terminated during or shortly after short-time work, he/she is entitled to the full contractually agreed salary from the moment the notice is given.

In addition, the employee can claim the entire loss of salary suffered as a result of the short-time work from the employer retroactively. This is because the employee's job could not be secured and it is assumed that he/she only agreed to short-time work under this condition. However, this is controversial, and there are also opinions in the literature that deny a retroactive claim.

 

Q: When is it a mass redundancy and what should has to be taken into account?

A: A mass redundancy occurs when a company must terminate a certain number of employees within 30 days. These terminations must be unrelated to the employee. This means that the notices of termination are not given because the employees do not perform adequately, but mainly for economic reasons. The following thresholds apply:

 

Company size 21 to 99 employees - At least 10

Company size 100 to 299 employees - At least 10 %

Company size more than 300 employees - At least 30

 

In the event of mass redundancies, the employer has various obligations to observe. In particular, a consultation procedure must be carried out with the employees (or the employees' representatives) before the final decision on the terminations is made. Further, the competent employment authorities must be informed of the planned mass redundancy. If consultation is not carried out, the notices of termination issued in the context of the mass redundancy are abusive; the same may be the case if consultation is delayed

May 2020 | Authors: Manuela Fuchs, Alexandra Geiger

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