Answers to frequently asked questions about mass layoffs and termination.
- When you’ve worked in Switzerland as an employee for more than 12 months, you are basically eligible for unemployment benefits.
- A social plan containing severance and other measures for the laid off staff must be negotiated by your work council (employee representation) or trade union.
- Your trade union syndicom supports you individually as a member and all employees in the process of mass layoffs ➜ Contact us
- Do not sign anything without thinking it through and possibly seek legal advice.
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:
- at least 10% of the employees of a business normally employing at least 100 and fewer than 300 employees.
- at least 30 employees in a business normally employing at least 300 employees.
- at least 10 employees in a business normally employing more than 20 and fewer than 100 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.
