1. The Core Principle: Freedom of Dismissal in Swiss Labor Law
Unlike several neighboring European jurisdictions where dismissal requires prior economic justification or statutory redundancy approvals, Switzerland enforces the principle of freedom of dismissal (Kündigungsfreiheit) established in Article 335(1) of the Swiss Code of Obligations (CO). Both employer and employee have the right to terminate an open-ended employment relationship by giving proper notice.
However, this fundamental freedom is bounded by two vital statutory protections:
- Mandatory Written Justification Upon Request (Art. 335(2) CO): The terminating party does not need to provide a reason upfront. However, if the recipient formally requests a statement of reasons in writing, the employer or employee must provide a truthful written justification.
- Prohibition of Abusive Dismissal (Art. 336 CO): A termination rooted in personal attributes (age, nationality, sexual orientation, union affiliation, or religious faith) or carried out to thwart the employee from asserting lawful wage claims is legally categorized as abusive (missbräuchliche Kündigung). While the termination remains valid, the employer may be ordered by a Swiss labor court to pay indemnity compensation of up to 6 months' gross salary.