Compensation for wrongful termination

Unjustified termination by your employer? Learn how to defend yourself and enforce your claim for compensation.
Unjustified termination by your employer? Learn how to defend yourself and enforce your claim for compensation.

Swiss law recognizes the principle of freedom of termination in private employment relationships. According to this principle, both parties to the contract – the employer and the employee – can terminate the employment relationship by adhering to the contractual or statutory notice period, without requiring a specific reason.

However, despite the principle of freedom of termination, a termination can be abusive. Article 336 of the Swiss Code of Obligations (OR) provides a non-exhaustive list of cases in which a termination is considered abusive. The jurisprudence of the Federal Supreme Court in this matter is extensive – abusive termination can be established for reasons other than those listed in the catalog.

Even if a termination is deemed abusive, it remains legally effective and terminates the employment relationship upon the expiration of the notice period. In the case of an abusive termination by the employer, the employee is entitled to compensation. According to the statutory maximum limit, this compensation amounts to a maximum of six months’ salary; however, the exact amount of compensation is at the discretion of the court. The court must consider and weigh all circumstances of the individual case to determine the compensation amount.

The following deadlines must be observed if a claim for compensation due to abusive termination is to be asserted:

  1. Objection Deadline: The employee must raise a written objection against the termination with the employer no later than the end of the notice period.
  2. Lawsuit Deadline: Subsequently, the employee must initiate legal proceedings within 180 days after the termination of the employment relationship. It is sufficient to commence the conciliation procedure before the conciliation authority or the justice of the peace.

If the employee misses any of these deadlines, the claim for compensation is forfeited, meaning it can no longer be asserted.

In a recent judgment dated May 11, 2023 (4A_412/2022), the Federal Supreme Court ruled that it is the responsibility of the employee to assert and prove that the conditions for compensation due to unjustified dismissal are met. This is especially applicable to the requirement that the employee raises a written objection against the dismissal before the expiration of the notice period. According to the statements of the Federal Supreme Court, it is not sufficient for the employee to present the objection to the employer only when the latter contests it.


Diana Krasnic

Legal |


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