Karpeo · Business in Switzerland
Immediate dismissal in Switzerland: grounds, procedure and financial consequences
Immediate termination ends an employment contract without notice. Under Swiss law it is an exceptional measure requiring good cause and a careful assessment of the facts. It must not be confused with ordinary dismissal followed by paid release from duties.
By Sarah Prieur · Swiss certified public accountant
The essentials
In Switzerland, immediate dismissal terminates an employment contract without observing the notice period. Article 337 of the Code of Obligations permits it only for good cause: circumstances making continuation of the employment relationship unreasonable in good faith. Ordinary dissatisfaction, a downturn in business or a routine mistake is not enough.
Distinguish three decisions: dismissal with the applicable notice period; release from duties during that period; and immediate termination. With release from duties, the contract and remuneration continue. With immediate termination, the relationship ends at once, but an unjustified decision can have substantial financial consequences.
This article concerns private-law employment. Public-sector employment and specially regulated situations require separate analysis.
What amounts to good cause?
The test is not simply how serious the employer feels the incident is. The question is whether, objectively and in good faith, the relationship can still continue until its ordinary end. The role, responsibilities, length of service, consequences and previous warnings all matter.
A particularly serious breach may be sufficient
Violence, a serious infringement of a colleague’s personal rights, a major breach of professional confidentiality or a work-related criminal offence may constitute good cause. These are not automatic boxes to tick: the established facts and their actual significance determine the assessment.
Separate directly observed events, available documents, statements from those involved and assumptions. This prevents an impression from becoming the sole basis for the decision.
A less serious breach generally requires a warning
Lateness, failure to follow an instruction or an isolated unjustified absence generally does not, on its own, warrant immediate dismissal. For less serious breaches, a prior warning is normally required. Any subsequent repetition must still be assessed in context.
A useful warning identifies the facts, expected conduct and possible consequences of repetition. A vague remark may not demonstrate that the employee understood the seriousness of the issue.
Incapacity without fault is not good cause
Illness or an accident for which the employee is not at fault cannot, in itself, justify immediate dismissal. Financial difficulties do not convert an ordinary dismissal into a valid immediate termination either. Salary continuation and protected periods are separate issues; see our guide to sick pay and the Bern scale.
Must the employer act within three days?
The employer must act promptly after learning the decisive facts. SECO explains that case law generally allows two to three working days for reflection, with qualifications linked, for example, to the organisation of a larger business. This is not a universal statutory deadline to apply mechanically.
A necessary investigation can take time, but it should begin promptly and proceed diligently. Conversely, letting an employee continue working for a prolonged period after the decisive facts are fully known may undermine the argument that continuation was intolerable.
Record the discovery date, enquiries made and people authorised to decide. If safety or business interests require an interim measure, consider an appropriate temporary paid release from duties while the facts are clarified, with legal advice, instead of a rushed termination.
Our guide to working and calendar days explains why the starting point and applicable rule matter when counting a period.
Prepare the decision without increasing the risk
Review the employment contract and any collective employment agreement. Then establish a clear chronology. The question for legal counsel is whether the conduct permits termination without notice, not merely whether it was unacceptable to management.
| Point to check | Practical question |
|---|---|
| Facts | What evidence exists, and which explanations are still needed? |
| Seriousness | Why would continuation until the ordinary end date be unreasonable? |
| Warning | Was a warning necessary, and was it given and understood? |
| Timing | When did the authorised decision-makers learn the decisive facts? |
| Alternative | Would ordinary dismissal with release from duties be more appropriate? |
| Consequences | What payments, documents and protective measures must be prepared? |
This is a preparation method, not an automatic legal test. Obtain an individual employment-law assessment before notifying such a consequential decision.
The terminating party must give written reasons if the other party requests them. Also comply with any applicable contractual or legal form requirements.
What if immediate dismissal is unjustified?
The employment relationship nevertheless ends immediately. In the private-law situations covered here, unjustified immediate dismissal does not automatically require reinstatement. It primarily creates financial claims.
Article 337c CO provides for what the employee would have earned until the ordinary termination date, or until expiry of a fixed-term contract. Savings resulting from the termination, earnings from other work and earnings intentionally forgone must be taken into account. The calculation is therefore not always simply the last monthly salary multiplied by the remaining months.
The court may also award additional compensation of up to six months’ salary. This is a ceiling, not an automatic payment or standard tariff. The amount depends on the circumstances.
What should an employee do after immediate dismissal?
Keep the letter, relevant correspondence, contract and payslips. Ask promptly for written reasons if they are unclear. Reconstruct the chronology without altering records or taking confidential company information.
Have the situation assessed before signing a settlement that waives claims. An agreed resolution may be possible, but understand its effect on salary, compensation and unemployment benefits.
Start looking for work and contact the competent employment service promptly. For Swiss residents this normally means the regional employment office, RAV/ORP; cross-border workers should check the competent system for their residence and circumstances. A dispute with the employer does not remove the duty to mitigate lost income or comply with benefit requirements. See our guide to Swiss unemployment benefits.
Can an employee also resign with immediate effect?
Yes, but the requirements are equally strict. A particularly serious breach by the employer can make continuation unreasonable. Persistent unpaid wages or employer insolvency require careful handling, including prior demands and security where applicable. Under article 337a CO, employer insolvency can justify immediate resignation if appropriate security for contractual claims is not provided within a reasonable period.
An isolated payment delay must not be confused with a situation justifying walking out. Under article 337d CO, unjustified failure to start work or abrupt abandonment can expose the employee to compensation equal to one-quarter of a monthly salary and proven additional loss, subject to the statutory conditions. The court may reduce the fixed compensation where there is no loss or a smaller loss.
Unless extinguished by set-off, the employer’s claim to that fixed compensation must be asserted through court action or debt enforcement within 30 days of the failure to start or abandonment. Document the facts and obtain individual advice rather than simply ceasing to attend work.
How should the final payroll be handled?
The legal decision and administrative treatment should be consistent. The final account may include earned salary, a contractual pro-rata thirteenth salary, justified business expenses and other outstanding entitlements. Holiday balances, working hours and compensation depend on their legal nature.
Do not combine every amount under one “severance payment” heading. Classification affects payroll and declarations. Review pension arrangements, accident cover and documents needed by the unemployment fund.
The employment reference is a separate document with its own accuracy requirements. It should not be used to punish the employee. Define the payroll provider’s role clearly: accounting and payroll support does not replace legal assessment of the dismissal itself.
Keep the employment-reference process separate from any dispute over termination. Our guide to interim employment references explains the employee’s right to a reference and the distinction between a full assessment and a limited confirmation.
Frequently asked questions
Can being late once justify immediate dismissal?
Usually not. An isolated late arrival is generally a less serious breach. Exceptional circumstances and previous incidents still need to be assessed.
Can an employee stop working immediately and still receive pay?
Yes, where an ordinary dismissal is accompanied by release from duties. The employee no longer works, but the contract continues until its end date and remuneration remains due under the applicable rules. This is not immediate termination.
Must the employer always pay six months’ salary?
No. Six months is the ceiling for the additional compensation under article 337c CO. The court determines the amount in light of the circumstances. Compensation for earnings lost until the ordinary end date is a separate issue.
Is suspicion enough to dismiss someone immediately?
An unsubstantiated allegation creates significant risk. The employer should investigate promptly. Whether termination is justified depends on the established circumstances, not simply the initial suspicion.
Can this guide validate a dismissal letter?
No. It explains general rules. A decision depends on the evidence, timing, contract and individual circumstances and should be assessed specifically before notice is given.
Sources and verification
English edition checked on 10 October 2026. The example is illustrative and states its assumptions; a specific dismissal requires individual assessment.
About the author
Sarah Prieur
Sarah Prieur is a Swiss certified public accountant, a partner and head of operations at Karpeo. She supports businesses, self-employed professionals and entrepreneurs with accounting, tax and VAT matters. Before joining Karpeo, she spent eight years in financial audit at PwC Switzerland, progressing to manager.
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