

Employment
Mass dismissals - operational necessity with legal pitfalls
Mass dismissals are sometimes unavoidable in order to secure the long-term existence of a company, whether as part of a reorganisation, in con-nection with a company acquisition or due to a financial crisis. The companies affected have to face complex legal as well as human challenges.
Once a company exceeds a certain size and reaches a certain number of dismissals, it enters the area of a legally regulated mass dismissal. A mass dismissal occurs when a company, within 30 days, terminates
- at least 10 employees, in operations regularly employing 20 to 100 employees,
- at least 10% of the employees, in operations regularly employing 100 to 299 eployees,
- at least 30 employees, in operations regularly employing more than 300 employees.
Operational necessity
Mass dismissals are often a reaction to serious economic difficulties or the result of internal restructuring or company takeovers. They can be key to securing the competitiveness and long-term existence of a company and averting insolvency. Typically, the instrument of short-time work is also not a suitable solution in these cases.
Legal challenges
The implementation of a mass dismissal proceeding requires strict compliance with legal requirements. The company is in close contact with the local labour office, which does not exercise any control function but supports the company, for example with orientation and information events for employees. Particularly, the following steps r should be observed:
- Start of the proceeding and consultation: As a first step, the company must inform and consult the employees or, if applicable, the employee representatives about the planned dismissals. In this process, which usually takes between 10 days and two weeks, employees have the opportunity to submit proposals to the executive management on how dismissals can be avoided, their number reduced or their consequences mitigated.
- Conclusion of the consultation process and information of the labour office: The cantonal labour office must be informed of the results of the consultation in writing after the consultation procedure has been completed.
- Execution: After notifying the labour office the termination meetings can be held. It is important that the contractual or statutory notice periods are observed.
- Social plan: If a company employs at least 250 employees and intends to terminate at least 30 employees within 30 days, there is a legal obligation to negotiate a social plan with the employees or employee representatives. Depending on the situation, however, social plan negotiations might be useful also outside of this threshold value.
Failure to comply with the requirements of the mass dismissal procedure can have serious financial consequences for the company, in particular employees can claim compensation for unfair dismissal.
Practical advice
Central to the smooth running of a mass dismissal process is early, tailored planning that takes account of all legal requirements and leaves room for unexpected events and contingencies, such as the election of employee representatives or the negotiation of a social plan. Transparent and professional communication with employees and their representatives can also help to ensure that the measures are accepted.
Do you need help regarding employment law?
We are happy to assist you in what can be a difficult process for all concerned, to ensure that the planned measures are implemented in a legally compliant, fair and professional manner.