All questions
Year in review
Abusive termination – protection of personality rightsFederal Court Decision of 10 December 2024 (4A_51/2024)A trade union employed an individual in 2014 as union secretary under conditions emphasising respect in all professional interactions, extending also to off-duty conduct if it affected work. The rules banned discrimination and required zero tolerance of sexual harassment and mobbing, with a commitment to support victims and sanction offenders.
In 2015, following a colleague’s complaint, an external investigation found the conduct amounted to advances but not harassment, while recommending vigilance. In December 2019 a newspaper, without naming the employee, reported accounts from several women describing persistent invitations, unwanted physical contact and repeated follow-ups; the employee was subsequently identified on social media. The employer suspended him with pay, mandated a fresh external investigation and issued a press release announcing the inquiry and inviting potential witnesses to be heard. The investigation report observed that, notwithstanding the 2015 episode, the employee had continued behaviour likely to be perceived as inappropriate toward women in professional settings. It considered one allegation of sexual harassment credible although a decade old and outside the employer’s then workforce, and recommended a written warning with clear conduct directives and a threat of dismissal. On 9 April 2020, the employer terminated the employment with release from duty, invoking its zero-tolerance policy; a press release communicated the end of the investigation and the taking of necessary measures, without naming the employee.
The employee sued for abusive termination, moral damages and compensation for impairment of future economic prospects, and sought that the employer send a letter to all local trade unions clarifying the reasons for dismissal and the absence of sexual harassment. The first instance labour court dismissed all claims; the Geneva Court of Justice confirmed.
Assessing the employer’s conduct, the Federal Court held that the suspension, the commissioning of an external investigation and the measured press communication were proportionate responses to serious public allegations that the employer could not ignore without jeopardising its credibility and duty to protect potential victims. As the employer did not divulge the employee’s identity nor communicate the reasons for dismissal internally or externally, it could not be considered as the source of the reputational harm, which stemmed from media publications and third-party posts. In the absence of a serious personality rights violation by the employer, neither moral damages nor compensation for economic loss were warranted, and there was no basis to compel a corrective letter. The appeal was dismissed; court costs were charged to the employee and he was ordered to pay party costs.
This decision emphasises that clear codes of conduct covering off-duty behaviour allow employers to act decisively in reputational crises, provided the response is proportionate and avoids stigmatising the employee.
Abusive termination – internal investigation into harassment allegationsFederal Court Decision of 19 January 2024 (4A_368/2023)A senior bank employee (director level) was accused in August 2018 of sexual harassment via the employer’s ethics ombudsperson. The bank initiated an internal investigation, interviewing several employees, reviewing parts of the employee’s electronic correspondence, and inviting him to an interview. He was not told in advance that the meeting concerned harassment allegations, was not informed of his right under the bank’s internal regulations to be accompanied by a trusted person and was confronted only in general terms with the accusations. He was later given the interview transcript for comment and allowed to submit a written statement. The bank concluded that the allegations were likely to be true and dismissed him with ordinary notice.
The Zurich Labour Court rejected the employee’s claim for abusive termination. On appeal, the Zurich High Court awarded 70,000 Swiss francs, reasoning that the process was unfair because the employee was not informed of the interview’s purpose beforehand, was not accompanied by a trusted person and did not receive sufficiently detailed particulars (who/when/where) to defend himself.
The Federal Court overturned this decision. It held that an employer’s internal inquiry is not a criminal proceeding and criminal procedure guarantees do not apply between private parties. While employees must have the opportunity to be heard, the employer may balance this against the need to protect complainants. Confidentiality and a degree of vagueness in the allegations are permissible, provided the inquiry is reasonably thorough.
Ordinary dismissal remains subject to the general prohibition of abuse, but it is not abusive merely because allegations are not proved. 'Suspicion dismissals' are permissible provided the employer is not acting frivolously and without reasonable grounds. On the established facts, the bank undertook substantial inquiries through a designated team, confronted the employee with the substance of the allegations and allowed him to make post-interview submissions. The lack of prior notice of the interview’s topic and the absence of a companion at that meeting did not elevate the process to abuse, nor was the bank obliged to disclose complainants’ identities or full particulars given the need to protect reporting employees.
The award for abusive termination was therefore set aside; the employee was ordered to pay court costs and party costs.
This decision confirms that when an employer conducts a documented, good faith inquiry and has reasonable grounds to suspect misconduct, an ordinary dismissal based on that suspicion is not abusive. Internal investigations do not need to replicate criminal proceedings, but they should still incorporate appropriate safeguards to ensure fairness. The adequacy of those safeguards should be assessed case by case, taking into account both the employee’s right to be heard and the employer’s duty to protect complainants.
Abusive termination and sign-on bonusFederal Court Decision of of 19 February 2025 (4A_506/2023)A senior manager was hired in September 2019 on 448,800 Swiss francs plus bonus and a contractual compensation of 700,000 Swiss francs for lost restricted stock units due to leaving the previous employment. The compensation was payable in three equal instalments at hire, after 12 months, and after 24 months. He worked day-to-day for the group’s trading arm under a staff leasing arrangement. In February 2020, US sanctions hit the trading arm’s Venezuelan oil business, funding dried up and the company prepared to wind down. Management notified the Geneva labour office, opened a 15-day employee consultation, answered written questions and circulated a social plan. The employee declined to sign because the second and third compensation instalments would not be paid in full, then went on sick leave. In May 2020, the hiring entity gave ordinary notice to end on 31 August 2020. Around the same period, the group moved its viable activities and some staff to a successor company.
At first instance most claims failed. On appeal the Geneva court awarded only a small vacation balance. The employee brought a further appeal to the Federal Court, renewing claims for abusive termination on three grounds (business transfer, collective redundancy procedure and personality rights) and for additional pay, including the unpaid compensation tranche and discretionary bonuses.
The Federal Court confirmed that a transfer of undertaking had occurred: the successor company took over the viable activities of the sanctioned trading arm, adopted the same business purpose and hired part of its staff. The transfer was effective while the claimant’s contract was still running. The key issue was whether his dismissal was a device to avoid transfer protection. The Court stressed that not every termination around a transfer is abusive: dismissals for legitimate economic reasons remain permissible, whereas circumvention of the law exists only if notice is given solely to prevent contracts from passing or to allow selective re-hiring. Here, the sanctions cut off financing and eliminated about 70 per cent of the business. The successor could only take over limited activities and some staff. On those findings, the dismissal was economically justified and therefore did not breach Article 333 CO.
As to the collective redundancy procedure, the Court found the employer had announced the project, informed the labour office, opened consultation and answered questions. Any omission to flag the later transfer option did not vitiate consultation because transfers in fact occurred and further information would not have enabled better alternatives. The timing and involvement were not shown to be arbitrary. The abuse claim based on consultation therefore failed.
On personality rights, the Court upheld the cantonal assessment. Workplace tensions stemmed largely from the claimant’s position and his own conduct, and the company took protective steps to limit the tensions resulting from his managing activities. No abusive termination was established.
On remuneration, the 700,000 Swiss francs 'make-whole' compensation was a fixed, contractually promised amount with fixed payment dates. It was therefore salary rather than a discretionary gratification. A clause requiring continued employment on the payment date is invalid when it conditions salary. The employee was entitled pro rata to the second tranche for the period actually worked.
By contrast, claimed bonuses for 2019 and 2020 were discretionary gratifications. The Court recalled the principle of accessoriness: when total pay is modest or average, repeated discretionary bonuses can, by practice, become enforceable as part of salary; but when remuneration reaches a 'very high income' threshold (five times the Swiss median salary), accessoriness does not apply. Given the claimant’s overall pay, his bonus entitlement remained purely discretionary, and no binding promise was proven.
The appeal was partially allowed to award the pro rata compensation amount. All other claims were rejected. Costs were apportioned.
This decision underscores two points. First, a fixed make-whole or sign-on amount framed as instalments may be treated as salary, so employers cannot lawfully hinge payment on the employee still being on payroll at the due date. Second, employers may rely on genuine economic grounds to justify terminations during a business transfer process.
Abusive termination and bonus calculationFederal Court Decision of 20 August 2024 (4A_587/2023)A portfolio manager had been employed since 2013 with a fixed salary of 140,000 Swiss francs and a variable 'return on assets' bonus. In 2019, she lost a significant client and raised repeated questions about the calculation of her bonus. After formally requesting payment of alleged outstanding amounts for 2015–2018, her employment was terminated in December 2019 with immediate release from duties. The employer justified the termination by a drop in performance and failure to follow procedures.
The portfolio manager then filed a claim, including for additional remuneration and damages for abusive termination. The Geneva courts rejected most of her claims, awarding only a small balance for remuneration and a new work certificate. She brought the matter before the Federal Court.
On the interpretation of the bonus clause (Article 18 CO), the Court confirmed that the judge must first seek the parties’ real and common intent, only subsidiarily applying an objective interpretation under the principle of trust. The cantonal court had correctly found a subjective consensus: throughout the contractual relationship, the employer deducted the employer’s social security contributions when calculating the bonus, and the employee, a finance professional, could not ignore this practice, especially since she regularly checked the statements and requested corrections on other items without ever contesting this deduction until her bonus fell. The Federal Court dismissed her argument that the principle in dubio contra stipulatorem should apply, noting that it only operates subsidiarily and was not relevant here.
On abusive termination (Article 336 CO), the Court recalled that dismissal is unlawful if it is triggered by the employee asserting contractual claims in good faith. However, the employee bears the burden of proof, and a temporal link alone is insufficient. The cantonal court had found credible the employer’s explanations – loss of an important client, reduced profitability, tensions over performance and expense reporting and loss of confidence. These amounted to legitimate business reasons. The employee had not shown that her claims for bonus payment were the determining cause of the dismissal. The Federal Court therefore confirmed that the dismissal was not abusive.
The appeal was rejected. The employee was ordered to bear most costs and to pay compensation for legal expenses.
The decision illustrates the priority of the parties’ real and common intent in interpreting contractual bonus clauses and the strict evidentiary burden on employees alleging abusive dismissal when contractual claims are raised before termination.
Abusive termination – long-serving employee close to retirementFederal Court Decision of 18 March 2025 (4A_109/2024)A 63-year-old employee had worked almost 29 years for the same employer and was a member of the personnel commission. In August 2020, during the covid-19 downturn, he was dismissed for organisational reasons. The company had placed employees on short-time work and benefited from state allowances, which were intended to avoid redundancies.
The first-instance court rejected his claim for abusive termination. On appeal, the Ticino Court of Appeal held the dismissal abusive and awarded four months’ salary as compensation. It stressed the worker’s age, long service, spotless performance record and past flexibility in accepting various assignments. The employer had not explored alternatives such as redeployment, reduced workload or early retirement, nor had it informed him in advance or meaningfully consulted the personnel commission. It also noted that the company itself had reassured employees about liquidity and stability, and had not shown pressing financial difficulties.
The Federal Court upheld this assessment. It recalled that Swiss law guarantees broad freedom of termination, but that dismissal may be abusive in light of the overall circumstances. Employees nearing retirement after many years of loyal service require heightened consideration. There is no general right to be heard before dismissal and no duty of proportionality in private law, but a lack of consideration for long-serving older staff can render a termination abusive, especially absent serious economic reasons. Here, the employer had not demonstrated urgent need, since it received state support and declared itself financially sound. In these circumstances, the failure to consider more social measures or to warn the worker beforehand tipped the balance.
The appeal was dismissed. The company was ordered to pay an indemnity to the employee as well as costs and compensation for the proceedings.
This decisions shows that while Swiss law preserves wide termination freedom, employers must show particular regard for employees of advanced age and long service, especially when relying on organisational grounds. Where the company has benefited from state support and given reassurances of stability, dismissals without exploring alternatives risk being deemed abusive.
Immediate termination and compensationFederal Court Decision of 30 October 2024 (4A_90/2024)A professional sports coach was hired under a fixed-term contract from 1 July 2018 to 30 June 2019. In September 2018, the employer terminated the contract with immediate effect and released a press statement. The coach enrolled with the unemployment office in May 2019 and found new employment as of August 2019.
The employee claimed salary for the remaining contractual term until 30 June 2019 and an indemnity for unjustified immediate dismissal. The lower courts agreed that the immediate termination was unjustified, entitling him in principle to salary compensation under Article 337c Paragraph 1 CO until the expiry of the fixed-term contract as well as an indemnity. The dispute concerned the extent of the salary compensation. Under Article 337c Paragraph 2 CO, the employee must deduct income earned elsewhere or that he intentionally failed to earn. The Valais Cantonal Court found that the employee had made no job applications between October 2018 and January 2019, despite his experience and an active job market for coaches at his level. Once he began applying regularly, he secured a professional coaching role within about five months. The court therefore held that he had voluntarily foregone income for four months and eleven days, reducing the compensation accordingly. Because he refused to disclose his later salary, the court presumed it was equivalent to his previous earnings.
The Federal Court upheld this approach. It confirmed that an employee dismissed immediately without cause is owed full salary until the end of the contractual term, but the employer may prove that part of the loss should be reduced if the employee deliberately failed to seek reasonable alternative work. The finding that the coach could have found new employment earlier if he had applied continuously was not arbitrary. His explanations – fearing rejections or reputational harm – were unsubstantiated, and the cantonal court was entitled to infer bad faith from his refusal to reveal his later pay.
The appeal was dismissed. The employee was ordered to pay court costs and party costs.
This decision confirms that while an employee unjustifiably dismissed with immediate effect is, in principle, entitled to salary until the end of the contract, this compensation may be reduced if the employer is able to prove that the employee failed, without valid justification, to make diligent efforts to find suitable work.
Dismissal upon return from maternity leaveFederal Court Decision of 27March 2024 (4A_461/2023)An employee was hired in 2007 by a financial services company and advanced to account manager with significant commissions. After maternity leave in 2016, she returned at 80 per cent with reduced salary, adjusted working hours and removal of clients in the Ticino region to accommodate her family situation. She was assigned a new portfolio of more than 120 accounts, which she considered less valuable than her previous one. In December 2017, she stopped working due to health issues. In June 2018, the employer terminated her contract with effect at the end of September, citing the need to redistribute clients permanently to maintain operational stability.
The employee sued, claiming salary balances, commissions, damages for abusive termination, loss of severance related to restructuring and moral damages. The Geneva Labour Court partly upheld her claim, finding the dismissal abusive because the employer had not adequately adapted her workload to her circumstances, and awarded compensation of four months’ salary. On appeal, however, the Geneva Court of Justice overturned this finding, rejecting her claims entirely.
The Federal Court confirmed. It held that the employee’s appeal failed to meet the procedural requirements of substantiated motivation regarding her financial claims. As to the dismissal, the Court accepted the finding that the employer had accommodated her situation by approving part-time work, removing travel obligations, adjusting her schedule and supporting her in client matters. The new portfolio, though less attractive, still corresponded to her function and contained development opportunities. There was no indication of harassment or that the employer should have known of a deterioration in her health before December 2017. The Federal Court therefore upheld the view that the termination was based on organisational needs and not abusive.
The appeal was dismissed and costs were charged to the employee. This decision illustrates that where an employer adapts working conditions in good faith and supports the employee’s reintegration, the subsequent termination for operational reasons will not be considered abusive even if the new workload is less advantageous.
Staff leasing – platform logistics modelFederal Court Decision of5 February 2025 (2C_46/2024)A Geneva courier company employing roughly 400 bicycle riders fulfilled meal-delivery orders generated by a major food delivery platform under a services licence that gave it access to the app. When the canton ordered the company to obtain a labour leasing licence – treating the arrangement as a temporary-staffing model in which the company was effectively supplying workers to the platform – the company appealed. The question before the Federal Court was whether, in substance, the platform exercised the essential power of direction over the couriers; if so, the model qualified as staff leasing and required prior authorisation.
On the facts as established, couriers could only work by logging into the platform. The platform assigned each job and communicated the restaurant and customer details, access codes and estimated times; time estimates were shown to restaurants and customers, and the app prompted riders if pickup lagged. The platform could narrow delivery zones in real time depending on rider supply, and customers could issue instructions to riders through in-app chat. The platform tracked location, could require selfie checks for safety compliance and could deactivate accounts. In practice riders were instructed not to reject tasks. The Court held that these features showed the platform controlled the object of the work (what to deliver to whom), its timing and geography and maintained real-time oversight – amounting to the essential power of direction, even if the courier employer retained scheduling or HR formalities.
Additional indicators also pointed to staff leasing: riders were integrated into the platform’s workflow; the platform app was the indispensable tool for performing deliveries; and the commercial risk of poor performance partly fell on the platform because service quality affected ongoing use by restaurants and customers. Pricing was not a fixed, pre-agreed fee but varied by delivery type and monthly conditions, consistent with a leasing model rather than a pure service contract.
The Court therefore confirmed that the courier employer was a lender of services and the platform was the user undertaking, so the activity requires a staffing licence under Swiss staff leasing rules. The appeal was dismissed.
This decision signals that where a platform dictates task allocation, timing, territory and on-the-job conduct through its app, regulators and courts will characterise the arrangement as staff leasing regardless of contractual labels, and the intermediary employer must be licensed.
