Termination Protection during Illness

The Swiss Federal Supreme Court recently passed a ruling (‘BGer 1C_595/2023’, dated March 27, 2024) that made people sit up and take notice and is likely to have considerable consequences in practice.

The decision concerned the dismissal of a career officer by the Swiss Armed Forces. Although this employment relationship as such was subject to public law, to a certain extent private law applies to the interpretation of public law, in particular the provision of Art. 336c para. 1 lit. b of the Swiss Code of Obligations (CO) (resp. parts thereof) regarding the employee's protection against dismissal during illness. The Federal Supreme Court's statements on the aforementioned provision of the CO will therefore have practical implications for employment relationships subject to private law.

Art. 336c para. 1 lit. b CO stipulates that an employee who is wholly or partially unable to work due to illness or accident (through no fault of their own) cannot be (ordinarily) dismissed for a certain period of time (after expiry of the probation period). The duration of this so-called blocking period depends on the number of years of service (30 days in the first year of service, 90 days from the second up to and including the fifth year of service and 180 days from the sixth year of service; in the case to be judged by the Federal Supreme Court, the blocking period in the event of illness was even 2 years according to the applicable public law). A notice of termination issued during such a blocking period is null and void, i.e. it has no legal effect at all (and therefore does not need to be contested by the employee in order to lose its effectiveness). The employer can only give (ordinary) notice of termination with legal effect after the statutory blocking period has expired. (This is subject to termination without notice for good cause in accordance with Art. 337 CO, which is, however, only permissible in exceptional cases.)

In the case to be judged by the Federal Supreme Court, the employee was on 100% sick leave at the time he was dismissed. The medical reports stated that the employee suffered from anxiety and depression disorders, which ‘had been triggered by the problematic situation at work’. He was attested a high risk of a depressive relapse if he was confronted with his former workplace again. The employee himself had also admitted to suffering from a depressive mood due to his situation with his employer. According to the relevant facts of the case, there was therefore an incapacity to work limited to the workplace (so-called workplace-related incapacity for work). There was no bullying against the employee (according to the facts of the case, which the Federal Supreme Court considered as given resp. could consider as given).

With regard to the purpose of Art. 336c CO, the Federal Supreme Court stated that an employee who is ill is not granted temporary protection against dismissal because his condition would prevent him from looking for a new job, but because employment with a new employer after expiry of the ordinary notice period seems highly unlikely due to the uncertainty about the duration and degree of incapacity for work. This protective provision is therefore not applicable if a health impairment is so insignificant that it in no way prevents the filling of a new job, which also applies in the case of work-related incapacity for work. The Federal Supreme Court therefore upheld the (ordinary) dismissal of the employee during his workplace-related incapacity for work (thereby also rejecting other (substantive) grounds asserted against the dismissal).

The question of whether an ordinary notice of termination can be issued during a workplacerelated incapacity for work is controversial in doctrine. The practice of the cantonal courts varies resp. varied. While cantonal courts in German-speaking Switzerland in particular have followed the theory of non-application of the blocking period in the event of workplace-related illness, the theory has been less well received in French-speaking Switzerland.

After the Federal Supreme Court had rejected the theory of non-application of the blocking period in the event of workplace-related incapacity for work in 2013, it implicitly applied it in a later ruling in 2016. It has now expressly recognized it in its new ruling.

In typical cases of workplace-related incapacity for work, the employee is only prevented from working at his (existing) job, but is otherwise able to act and hardly restricted in his private life (in terms of his leisure time, hobbies, etc.). It can be concluded from this that the protective concept of Art. 336c CO should not apply in this constellation, as a new employer would have no reason not to employ the affected employee due to the inability to work as this does not affect a new position. In practice, however, the situation is often more complex. An illness resulting from a particularly difficult situation at the workplace can take on such a dimension that it also manifests itself in relation to other jobs (erga omnes). It is also often difficult to determine the causes and effects of illnesses (particularly of a psychological nature). Delicate questions of demarcations and proof may therefore arise.

In principle, employees have to provide evidence of their claimed incapacity to work due to illness. However, it is nevertheless assumed that the employer bears the burden of proof that an incapacity for work proven by the employee is reduced to the workplace if he wishes to invoke the lack of temporal protection against dismissal under Art. 336c CO. Particularly after the Federal Supreme Court ruling, employees who are unable to perform their work due to interpersonal stress or conflicts will try to obtain a medical certificate of general (erga omnes) incapacity for work. In practice, it is therefore likely to be very difficult for employers to provide sufficient evidence of job-related incapacity for work. Employers are thus well advised, in the event of job-related incapacity for work or if there are objective indications of such (e.g. employee is seen during leisure activities), to immediately reject resp. not accept medical certificates to the contrary and to request an examination by a medical consultant and to secure any further evidence of job-related incapacity for work. Furthermore, employers who terminate an employment contract on the grounds of job-related incapacity for work at a time that falls within a blocking period pursuant to Art. 336c CO, should issue a new notice of termination after this period has expired (to make sure that a termination notice is effective even in the event that a court would later deem the previous notice of termination null and void).

It should then be noted that in the event of bullying, an employer is obliged under his statutory duty of care to take all appropriate measures that can reasonably be expected of him to protect the personality of the employee concerned (such as coaching, mediation, etc., whereby it must be examined in each individual case which measures must be taken). In the case of bullying, a dismissal of the victim of bullying can generally be challenged as abusive (within the meaning of Art. 336 CO), unless the employer can prove that he has taken all reasonable measures to protect the victim’s personality and that the situation could not be sufficiently defused. (In the event of abusive dismissal, the employer is obliged to pay an indemnity of up to 6 months' wages if the employee makes a timely claim; further claims, in particular for satisfaction, may arise in the event of a violation of an employee’s personality right.) The Federal Supreme Court has not ruled on the question of whether or under what conditions an employer can invoke the inapplicability of the protection against dismissal for a period of time pursuant to Art. 336c CO in the event of workplace-related incapacity for work caused by bullying. It must be expected that the employer will at least be required to have taken all appropriate and reasonable measures to protect the personality of the employee concerned (for which he must provide evidence), otherwise the employer would be permitted to rely - to the detriment of the employee - on a fact (the employee's workplace-related incapacity to work) that he (the employer) has caused himself through his own violation of duties.

It remains to be seen how the practice of workplace-related incapacity for work will develop in detail

It should also be noted that according to Art. 324a CO an employer remains obliged to continue to pay wages for a certain period of time (depending on the duration of the employment relationship and jurisdiction) if the employee is unable to work due to illness. Even though this legal provision uses the identical wording as Art. 336c para. 1 lit. b CO ("prevented from performing work"), these are now interpreted differently. For the question of the obligation to continue to pay wages, the only decisive factor is that the employee is unable to perform his work due to illness. Whether his illness is job-related or not is not decisive in this respect; the employer remains obliged to continue to pay wages in accordance with Art. 324a CO regardless of this.

We would also like to point out that the question of whether an illness triggers a blocking period pursuant to Art. 336c para. 1 lit. b CO and all other related legal issues must be carefully examined in each individual case (including the best strategic approach).

About the author:

Dr. Regula Rhiner, LL.M., is senior associate at Littler Switzerland.

You can reach her at +41 44 219 60 63 or regula.rhiner@littler.ch