Termination during short-time work

The new short-time work regime due to the Covid 19 pandemic continues to apply in Switzerland. As a result, many workers are currently on short-time work. However, even with the new regime, the special situation due to the official closures is leading to economic bottlenecks in many companies. This will undoubtedly lead to dismissals.

If short-time work is no longer sufficient and dismissals have to be made, the question arises as to the legality of this dismissal. In principle, it can be said that short-time work does not affect the freedom of dismissal (Art. 355 para. 1 Swiss Code of Obligations). This means that even if employees are working reduced working hours, a notice of termination may be given. The special situation due to the coronavirus therefore does not justify a separate period of notice. It should be noted, however, that if employees fall ill with the coronavirus through no fault of their own, the statutory blocking period must still be respected (Art. 336c Swiss Code of Obligations).

Another question is what applies if the employment relationship has already been terminated or is terminated during short-time work. It is important to note that the prerequisite for short-time work compensation is an employment relationship that has not been terminated. For an employee whose employment relationship has already been terminated, no short-time work compensation can be claimed from the outset. If an employment relationship is terminated during short-time work, the entitlement to short-time work compensation ceases for the duration of the notice period.

Although work contract terminations during covid-19 situation do not stipulate a termination at an inappropriate juncture, it cannot be assumed without further ado that the termination is lawful. In Switzerland, a notice of termination can be wrongful despite the freedom of dismissal. This is based in the provisions of Art. 336 et seqq. Swiss Code of Obligations. Thus, a termination is wrongful if the reason for the termination is included in the catalogue of Art. 336 Swiss Code of Obligations or violates the principle of good faith according to Art. 2 Swiss Code of Obligations. Therefore, before giving notice of termination during short-time work, it is advisable to check whether the employee can be temporarily transferred to another part of the business. This way, for example, the accusation of a dismissal to avoid claims arising from the employment relationship, can be prevented. If the employee is an older person, such an examination is even mandatory so that the termination is not considered wrongful.