Collective redundancy: obligations and procedure

Cutting staff in bulk is not simply an individual dismissal multiplied: when the numbers exceed certain thresholds, the Code of Obligations imposes a specific procedure of consultation and notification. Skipping it does not void the dismissals, but it makes them wrongful and costs dearly. Here is how collective redundancy works in Switzerland.

When a dismissal is “collective”

A collective redundancy occurs when, within 30 days, the employer terminates — for reasons not related to the individual — a number of employment relationships that reaches the statutory thresholds, calculated on the establishment (not the whole company):

at least 10 dismissals in establishments with 20–99 employees;
at least 10% of employees in establishments with 100–299 employees;
at least 30 dismissals in establishments with 300 or more employees.

Only terminations driven by economic, organisational or restructuring reasons count, not those linked to an individual’s conduct or performance. Below 20 staff, the rules on collective redundancy do not apply.

The consultation procedure

Before deciding, the employer must consult the employees’ representatives (or, where there are none, the employees themselves). Consultation is not a formality: it must take place before decisions are made, so that employees can put forward proposals to avoid the dismissals or reduce their number and mitigate their consequences.

To this end, the employer must provide in writing all useful information:

the reasons for the collective redundancy;
the number of employees affected;
the number of those usually employed;
the period over which the dismissals are planned.

A copy of these communications must be sent at the same time to the cantonal labour office.

Notification to the labour office

Once consultation is concluded, the employer must notify in writing the collective redundancy project to the cantonal labour office, sending a copy to the employees’ representatives. The notification allows the canton to seek solutions to the problems raised by the dismissals.

The employment relationship of the affected employees ends, in principle, 30 days after the notification to the labour office, unless the termination takes effect later under the normal contractual notice periods (which remain due in any case).

For larger businesses, the CO provides for an obligation to negotiate a social plan when the employer usually employs at least 250 workers and intends to dismiss at least 30 of them within 30 days for economic reasons. The social plan sets out measures to avoid, reduce or mitigate the consequences of the dismissals (early retirement, severance, outplacement support). If the parties cannot reach an agreement, the matter can be submitted to an arbitration tribunal.

The consequences of non-compliance

An employer who ignores the procedure does not see the dismissals annulled, but exposes them to being classified as wrongful: the court can order the employer to pay compensation of up to two months’ salary for each affected employee. Added to this is reputational damage and the risk of serial litigation.

The mistakes that cost

Deciding before consulting: consultation must be genuine and come first.
Counting employees at company level instead of by individual establishment.
Forgetting the notification to the cantonal labour office.
Overlooking the social plan when the 250/30 thresholds are triggered.
Incomplete information to the representatives: this vitiates the entire procedure.

Why timing is everything

Collective redundancy is a procedure marked out by rigid deadlines and steps: consultation, notification, effect after 30 days. An error in sequence or a miscalculated threshold turns a legitimate restructuring into a series of wrongful dismissals. It must be planned in advance and documented step by step.

How we help

The Payroll & HR division of SIH ONE supports the restructuring from calculating the thresholds to the consultation procedure, the notification and the handling of the final settlements, in coordination with legal advisers. Talk to our people desk.