Termination Agreement

The conclusion of a termination agreement can have serious disadvantages for the employee and entail risks. For example, the dismissal protection provisions of the Code of Obligations do not apply, which means that the employment relationship is not extended in the event of illness. In addition, the employee effectively waives the right to claim compensation for unfair dismissal. Furthermore, the conclusion of a termination agreement can lead to the unemployment insurance fund assuming that the inability to work is self-inflicted and ordering adjustment days.

Against this background, doctrine and case law have established limits to the admissibility of termination agreements. For example, the termination agreement must be specifically justified by the interests of the employee, otherwise it is inadmissible. The employee must also be granted a period for reflection if the termination agreement is based on a proposal and drafted by the employer.

The Federal Supreme Court has ruled in some cases that the inadmissible termination agreement was void and that the parties were thus to be put back in the position they would have been in if the termination agreement had not been concluded - which would basically mean that the employment relationship had not yet been terminated resp. that a notice of termination would have to be given. According to other court decisions, on the other hand, the inadmissible termination agreement is to be reinterpreted as an ordinary termination, which can lead to compensation for unfair dismissal.