Immediate termination of the employment contract

Immediate termination of the employment contract

"I run a small family business that is experiencing conflict with one of its employees. I would like to know in what kind of case I could immediately terminate his employment contract?"

Maxime, Geneva

Under art. 337 of the Swiss Code of Obligations (CO), employers and employees may terminate employment contracts immediately at any time for just cause. However, immediate termination is a radical measure that is only permitted in a restrictive manner, particularly if the party terminating the contract cannot be required to comply with the contractual or legal notice periods.

Immediate termination is only permissible where there are just grounds. The case law has specified that these facts must be so serious that they result in the irretrievable severance of the bond of trust required in the employment relationship; only a particularly serious breach by the employee thus justifies immediate termination of the contract. In the case of less serious breaches, immediate termination must be preceded by a series of warnings from the employer. Breach of contract means in particular the violation of an obligation arising from the employment contract, a collective labour agreement or the duty of loyalty.

To determine the existence of just cause, it is necessary to take into account all the elements of the case, including the extent and nature of the breaches, as well as the position and responsibility of the employee. The court has a wide discretion in this respect. By way of example, the following have been recognised as constituting just cause: the unilateral decision by the employee to take holiday despite the employer's refusal; threats made by an employee against a colleague; the commission of offences to the detriment of the employer; the denigration of the employer; or the undue collection of money from a customer.

If you intend to invoke just cause, you only have a short cooling-off period, in principle two to three days maximum, in which to inform your employee of the immediate termination of the employment relationship. Finally, you should be aware that if the termination is deemed to be unjustified, you will have to pay your employee the salary to which he would have been entitled during his ordinary notice period, plus compensation of up to six months' salary pursuant to art. 337c of the Swiss Code of Obligations.