KMU Magazin No. 7/8, July/August 2024 Job Termination - Compliance with retention periods

Under Swiss law, the principle of freedom of dismissal applies. Employers and employees are permitted to terminate the employment relationship at any time. However, the employer must comply with certain retention periods. This article shows when and how the protection against retention periods applies.

If an employer terminates an employment relationship after the probationary period, the so-called retention period protection applies. If certain circumstances exist at the time the notice of termination is received, the notice of termination is null and void. If these circumstances arise only after the notice of termination has been given but during the notice period, the notice period is suspended and the end of the employment relationship is postponed.

This protection during the waiting period is explained below, with particular attention paid to the question of whether this protection during the waiting period applies in the case of a so-called workplace-related incapacity to work. Reference is made to the latest case law (BGer 1C_595/2023 of March 26, 2024) in this context.

Retention periods and their effect

Art. 336c para. 2 OR states that a termination of employment pronounced by the employer is null and void if it is pronounced during the retention period. However, if a retention period occurs during the notice period, its expiry is interrupted and only continued after the retention period has ended. The best-known retention periods are those in the event of illness or accident. Further blocking periods have been added with the amendment to the law regarding the reconciliation of family and career. The most important blocking periods can be displayed in a table as shown in the figure.

In other words, for example, an employer cannot (properly) terminate the employment of a sick person during the retention period. The termination is null and void or has no legal effect and is deemed not to have occurred. If a person who has already been given notice falls ill with the flu for five days during the notice period, the notice period is suspended by these five days. These five days are added to the original end date of the employment contract.

Art. 336c para. 3 of the Swiss Code of Obligations (OR) must then be observed: if a deadline applies to the termination of the employment relationship, such as the end of a month or a working week, and if this does not coincide with the end of the continued notice period, the continued notice period is extended to the next deadline. Often, the end of a month is agreed in the employment contract, which means that the new end date is again the end of a month, even if the person who has been dismissed was only ill for five days.

This “jumpy” extension of the employment relationship by one “whole” month at a time is perceived as disruptive by many employers, but it is to be accepted in the case of employment contracts that provide for the end of the month as the end date. What is often forgotten is that at least after the extended notice period – in the present example from the sixth day – at least there is no longer any protection during the waiting period and, for example, a new flu during this time no longer causes an extension of the end of the contract, since the protection during the waiting period can only take effect during the notice period or the extended notice period.

No retention period protection

The retention period protection only applies if the employer has declared the ordinary termination. However, there are various situations in which the retention period protection does not apply as listed below, but not exhaustively:

• The termination occurs during the probationary period.
• The termination is pronounced by the employee.
• A termination without notice is pronounced.
• The parties set the end date of the employment contract in a termination agreement, taking into account the prohibition of waiver (if necessary).

As will be reported below, the retention period protection does not apply even in the case of a so-called workplace-related incapacity to work. To understand the current case law, it is necessary to look at the past.

Reason for retention period protection

In the statement (Statement of the Federal Council of May 9, 1984, in BBl 1984 II 604 f.), the following was stated regarding retention period protection: “[...] in the case of protection against dismissal, however, the fault of the employee should not play a role, because the protection is justified by the special situation of the employee alone – inability to work due to illness or accident. Furthermore, it would not be acceptable if, in cases of doubt, a lawsuit were necessary to clarify whether protection against dismissal exists. Even after this change, employees will certainly not become ill or have an accident through their own fault in order to benefit from protection against dismissal.

Furthermore, Article 2 of the Civil Code offers sufficient scope for intervention against legal abuses, even without the express reservation in the new provision. The standard makes it clear that protection against dismissal exists in the event of total or partial incapacity to work due to illness or accident. This enshrines in positive law what has already been established by court practice: protection against dismissal does not exist because the employee is unable to look for a job due to the inability to work, but because it seems highly unlikely that the employee will be employed by a new employer at the time of the expiry of the ordinary notice period in view of the uncertainty regarding the duration and extent of the incapacity to work.”

Incapacity to work

It was therefore controversially discussed whether all hindrances to work due to illness trigger a retention period protection or whether a hindrance to work that is exclusively related to the workplace does not trigger a protection. With the decision 1C_595/2023 of March 26, 2024, the Federal Supreme Court has at least provided clarity in the area of public employment law, which refers to the provisions of Art. 336c CO.

If the incapacity to work is limited to the workplace, i.e. it is restricted to the workplace, the protection afforded by the retention period does not apply. In such cases, the employee can be dismissed without further ado and the dismissal is valid. It is questionable whether this case law will also be confirmed outside of public sector employment law.

Evidence

As mentioned in the statement, the legislature tried to avoid an unclear legal situation and wanted the application of the retention period protection to be as broad as possible. Therefore, the protection also applies in the case of only partial incapacity to work or only short illnesses.

The employee will have to provide a doctor's certificate as proof that he is unable to work. The employer has to provide proof of the workplace-related incapacity to work as counterevidence. This can be done as part of the medical examination by a trusted doctor. In practice, however, it has been shown that a work-related incapacity to work often goes hand in hand with stressful situations with superiors or colleagues, and it is extremely difficult to determine whether the illness would immediately disappear if the sick employee were working in a different job.

It may be helpful if the medical examiner also provides an assessment of the question of whether the employee is able to take vacation. At least in the case of psychological impairments, this can be seen as an indication that the incapacity to work is not of such a high medical value that recovery is per se impossible. Even if the medical examiner were to confirm a work-related incapacity to work, two contradictory expert opinions would be on the table, and it would be up to the judge to weigh them in the context of the evidence. In such situations, it is not surprising if the judge is hesitant and more likely to rule out a work-related incapacity to work.

In this respect, the new case law does not follow the intention of the legislator and will probably provoke countless court cases in which the parties dispute whether or not there was a work-related incapacity. In such situations, employers are strongly advised to issue a further dismissal for cause after the “disputed” waiting period has expired, in case a court subsequently rules that there was no work-related incapacity.