What is a mass layoff? What is the procedure?

What counts as a mass layoff?

By art. 335d of the code of obligations (CO ) mass layoffs are notices of termination given by the employer to employees of a business within 30 days for reasons not pertaining personally to the employees and which affect:

1. at least 30 employees in a business normally employing at least 300 employees.
2. at least 10 employees in a business normally employing more than 20 and fewer than 100 employees;
3. at least 10% of the employees of a business normally employing at least 100 and fewer than 300 employees.

Are we consulted as employees before a mass layoff?

Yes, the staff needs to be informed before the final decision is made. The employee representation committee, or if none exists the entire staff, needs to be consulted and given the opportunity to suggest alternatives to the layoff. A deadline of at least two weeks needs to be set and management must answer all questions regarding the measures and the consequences of the mass layoff for the concerned employees.

The management has to seriously examine the proposals from the staff. However, it does not have to implement them.

Is there an authority involved?

The employer notifies the cantonal employment office in writing of any intended mass layoff and forwards a copy of such notification to the organisation that represents the employees or, where there is none, to the employees themselves. Such notification must contain the results of the consultation with the organisation that represents the employees and all appropriate information regarding the intended mass layoff. On request, the regional employment office does offer information about your entitlement to and the formal procedure to apply for unemployement benefits.

Is there a compensation for laid off employees?

For companies with more than 250 employees who plan to lay off 30 or more employees within 30 days the management is obliged by art. 335i CO to  negotiate a social plan with the trade union if a collective labor agreement (CLA) exists. If no CLA exists, it must negotiate with the employee representation committee or in the absence of one, the affected staff. However, the trade union can offer support for the employees even without a CLA and with a mandate negociate a social plan with the employer. The social plan contains measures to avoid layoffs or to reduce their numbers and mitigate their effects. Typical elements can include financial severance packages, outplacement services or early retirement packages for older employees (see art. 335h CO).

If no agreement is found at the negotiation table, the court of arbitration will issue one by court order after hearing both sides (see art. 335j CO)

Pension funds and severance

Do pension fund contributions have to be paid on a severance payment?

As far as the compulsory occupational pension scheme is concerned, the severance payment is to be considered as a component of the relevant AHV-salary in accordance with art. 7 paragraph 2 BVG, the severance payment is in principle also subject to pension contributions. Reserved are any contrary staff regulations.

What happens to my pension fund?

The money in the pension fund will be transfered to the pension fund of your next employer  within Switzerland. If you have no gap in employment, your new employer’s pension fund will send you instructions. If you have a gap between your current and your next job, your money is typically parked on a vested benefits account. Do not forget to transfer your pension to the new pension fund once you have found a new job.

If you move abroad, what happens next depends on your new country of residence. We recommend having a look at the state’s vested benefits FAQ for details: aeis.ch/en/individuals/fzk-vested-benefits-accounts/cash-payout-due-emigration

Please note: If you lose your job, you are no longer insured with your employer’s pension fund – the savings process is interrupted. This reduces the retirement assets. The extent of the loss varies from case to case. But one thing is clear: the longer unemployment lasts and the older a person is, the larger is the loss of savings.

What comes next: unemployment benefits and RAV

When you sign up for unemployment, you may freely choose which unemployment insurance processes your case. You can find a more in-depth FAQ on unemployment at the site of our unemployment fund.

Am I insured against unemployment?

Yes – anyone who has worked in Switzerland for more than 12 months has a right to get unemployment benefits, no matter their nationality.

What do I need to do in order to receive unemployment benefits?

Go to the  unemployment office (RAV) responsible for your case. Here you can find the competent office at.

As soon as you know that your contract is terminated, you are  expected to start looking for a new job. Typically, the RAV will expect you to apply to 10-15 jobs per month from the date you know about being laid off. It is important to document these applications.

Immigration and residence permit

If you are not citizens of Switzerland, the EU or EFTA your residence permit is tied to the contract with your employer. Losing a job can lead to legal uncertainty with regard to the residence status and the right to stay in Switzerland.

Word of caution: We are not immigration specialists and the below FAQ is our best attempt at answering common questions. Furthermore, syndicom’s legal service cannot offer consultations and advice with regards to immigration law to our members. We recommend consulting a migration law expert about your individual situation when in doubt. You may also find further information at the government’s website.

This is usually marked on the back of your physical permit card. When in doubt, we recommend asking the cantonal immigration authorities about your case.

How can I find out whether my permit is tied to the contract with my employer?

The permit of EU/EFTA-citizens is not tied to their employer.

Non-EU/EFTA nationals usually have an L permit tied to their employer.

What happens to my residence permit if I lose my job and I am an EU/EFTA citizen?

As an EU or EFTA citizen your right to remain in Switzerland is not tied to a particular job. You have a right to remain in Switzerland until your permit expires and you can request an extension (see below) as long as you are still receiving unemployment insurance. Your permit may be revoked if you are receiving «Sozialhilfe» (social aid), that is welfare payments beyond unemployment insurance, for a considerable amount of time. The amount of time depends on how long you were a Swiss resident.

Other information:

• B permit: In the event of involuntary termination of employment after the first twelve months of residence, the right of residence of holders of an EU/EFTA residence permit expires within six months after termination of employment. However, you will have to apply for a permit as a job-seeker with the cantonal migration authorities For employees who can claim unemployment benefit for more than six months, the right of residence expires six months after the end of this benefit. If your permit expires while you are unemployed and you still receive unemployment funds, you can apply for a permit extension, which will usually be granted.
• L permit: You may remain in Switzerland for up to 6 months for searching a job. Depending on your situation, you may have to apply for this right. We recommend contacting the cantonal immigration office promptly to clarify your situation.

What happens to my residence permit if I lose my job and am a third-country citizen (non-EU/EFTA national)?

You have to promptly inform the relevant immigration authorities. Failure to do so can lead to consequences such as permit revocation or refusal to renew the permit.

• If you have an L permit, which is usually tied to your employer, you will be asked to leave Switzerland on the last day of the permit’s validity. If you find a new job in Switzerland, your new employer will have to apply for a new permit for you.
• If you have  a B permit not tied to your employer, you will be allowed to switch to a new employer. Priority for Swiss/EU nationals («Inländervorrang») does not apply. Please confirm your status with the cantonal immigration office.

If your permit expires while you are unemployed and you still receive unemployment funds, you can apply for a permit extension, which will usually be granted.

Please note: This FAQ entry is based on our best knowledge, but we are not immigration specialists. Additionally, your personal situation as well as the practice of your cantonal immigration office will determine your next steps. We recommend you double check with them and a migration law specialist in your canton.

You can take up residence anywhere in Switzerland with a B permit. However, the change of canton must be applied for in advance at the migration authority of the new canton.

What are the options for self-employment or starting your own startup?

Change from employment to self-employment is subject to authorisation by the cantonal authorities. Non-EU citizens need a confirmation from the cantonal labor office that they are able to support themselves with a self-employment project, but this is needed only initially.

What happens if I have a C permit («Niederlassungsbewilligung»)?

The settlement permit C is unlimited and is issued without conditions.

Those affected do not lose their status or permit if they become unemployed, regardless of whether their citizenship is from the EU or not.

However, if they are dependent on social assistance for a longer period of time and to a considerable extent,  the permit may be revoked.

If the integration criteria are not met including participation in economic life, that is, holding a job or being in education, the settlement permit can be replaced by a residence permit (so-called «Rückstufung»).

My permit is running out and I cannot go back to my country of origin due to persecution of war. What can I do?

Depending on your personal situation, you may be eligible for an F permit («Vorläufig Aufgenommene»). It is provisory and granted to those who cannot return.