Mass redundancy in Swiss SMEs: the consultation comes first

The Swiss labour market cooled noticeably in 2025. The Skills Shortage Index published by Adecco Group Switzerland and the Swiss Job Market Monitor at the University of Zurich came in around 22 per cent below the previous year, and the unemployment rate rose from 2.3 to 2.8 per cent. The steepest declines showed up in office, administrative and commercial roles and in ICT and IT professions, two groups the study describes as highly exposed to artificial intelligence.

Once that trend reaches an individual business, job cuts land on the management agenda. With them comes a subject many management teams treat as a large-company matter: mass redundancy.

The threshold sits lower than most people assume. In a company with 21 employees, ten notices of termination within 30 days are enough. From that point a statutory procedure applies, and its most expensive mistake happens before the first termination letter is written. These rules bind every employer running a business in Switzerland, including the Swiss subsidiary of a foreign group. Our guide to hiring in Switzerland sets out the employer duties that come with a Swiss entity.

The thresholds under Art. 335d of the Swiss Code of Obligations

Swiss employment law sits in the Code of Obligations (Obligationenrecht, OR in Swiss usage, CO in the English translation published by Fedlex). Art. 335d OR treats notices of termination as a mass redundancy when an employer gives them within 30 days in one business for reasons that have nothing to do with the individual employee. The number of people affected has to reach:

Size of business (employees normally employed)	Threshold
more than 20 and fewer than 100	at least 10 notices
at least 100 and fewer than 300	at least 10 per cent of the workforce
at least 300	at least 30 notices

Three points get overlooked again and again.

"Business" here means the individual site. The threshold applies to each place of business, so a group with several Swiss locations tests each one separately.

Fixed-term contracts count where they end before the agreed term expires (Art. 335e para. 1 OR). Closures ordered by a court fall outside the rules, as do mass redundancies in bankruptcy proceedings or under a composition agreement with assignment of assets.

Operational means operational. Notices given on performance or conduct grounds stay outside the count. Presenting an operationally driven reduction as a series of individual dismissals carries substantial risk, because in a dispute the actual reason decides the case.

The mistake that gets expensive

An employer who intends a mass redundancy consults the employee representation body (Arbeitnehmervertretung, the staff body elected under the Swiss Participation Act, which the English translation published by Fedlex calls the organisation that represents the employees) or, where none exists, the employees themselves (Art. 335f para. 1 OR). They must at least be given the chance to propose ways of avoiding the redundancies, keeping their number down and softening the consequences (para. 2).

Everything turns on the word "intends". Consultation belongs to the phase before the final decision. An employer who has already settled internally how many roles go and which ones, and informs the workforce afterwards, is announcing an outcome. By that point the procedure has nothing left to influence.

The consequence sits in Art. 336 para. 2 let. c OR: a notice given in the course of a mass redundancy without the consultation required by Art. 335f OR is unlawful. The German text calls it missbräuchlich, the Swiss term for a termination that breaches the protective rules and triggers compensation. Compensation can reach two months' salary for each person affected (Art. 336a para. 3 OR).

For a company with twelve notices and an average salary of CHF 7'500, that means a maximum exposure of CHF 180'000, plus the cost of the proceedings and the effect on people inside and outside the company. An affected employee objects to the notice in writing no later than the last day of the notice period, then brings the claim within 180 days of the employment ending (Art. 336b OR).

A proper procedure costs two to three weeks.

What the consultation requires

The employer provides all useful information and communicates the following in writing in every case (Art. 335f para. 3 OR):

1. the reasons for the mass redundancy
2. the number of employees who are to be given notice
3. the number of employees normally employed in the business
4. the period in which the notices are to be given

A copy of that communication goes to the cantonal employment office (kantonales Arbeitsamt, the cantonal labour market authority; several cantons run it under their own name, for example Amt für Wirtschaft und Arbeit) at the same time (para. 4), well before the formal notification under Art. 335g OR. That copy is a step in its own right, and in practice it slips through the cracks more often than any other part of the procedure.

The law says nothing about how long the consultation should last. It calls for a genuine opportunity to respond, and practice has settled on roughly two weeks, less where matters are urgent. What matters is that employees hold enough information to make usable proposals, and that those proposals are then examined seriously and answered. A written report that records every proposal received and explains the decision taken on it is the strongest documentation a company can hold.

The decision comes after that.

Notification to the cantonal employment office

Once the consultation has run, the employer notifies the cantonal employment office of the intended mass redundancy in writing and sends a copy to the employee representation body or to the employees (Art. 335g para. 1 OR). The notification carries the results of the consultation and all useful particulars (para. 2). The employment office then looks for solutions to the problems raised by the intended mass redundancy (para. 3).

Paragraph 4 decides the timetable: an employment relationship terminated in the course of a mass redundancy ends 30 days after this notification, unless the notice takes effect at a later date under contractual or statutory provisions. Longer notice periods therefore continue to apply in full. Anyone working with short notice periods builds these 30 days into the schedule.

Social plan: the point at which it becomes mandatory

The duty to negotiate applies where an employer normally employs at least 250 people and intends to give notice to at least 30 of them within 30 days for operational reasons (Art. 335i para. 1 OR). Notices spread over time that rest on the same operational decision are added together (para. 2). Where the parties reach no agreement, an arbitral tribunal draws up the social plan by binding award (Art. 335j OR). A social plan (Sozialplan) is the negotiated package that cushions the effects of the redundancies, covering measures such as severance payments, extended notice, retraining and outplacement.

Most SMEs sit below this threshold and carry no obligation. That is exactly where the room for judgement lies: a company chooses what it offers voluntarily and can aim it at what genuinely helps the people leaving. A social plan must not endanger the continued existence of the business (Art. 335h para. 2 OR), which is a sensible yardstick for voluntary measures as well.

What to examine before cutting jobs

This review makes commercial sense, and it forms the substance of the consultation, because these are the very points on which employees are invited to contribute proposals:

• Short-time working compensation (Kurzarbeitsentschädigung), the state scheme that covers part of the wage bill during a temporary and unavoidable drop in work
• Internal redeployment and retraining, particularly where another part of the business has demand
• A hiring freeze, so that natural attrition carries part of the reduction
• Voluntary reductions in working hours, often taken up more readily than expected
• Running down overtime and holiday balances
• Bringing outsourced work back in house before internal roles go

Where one of these measures brings the number of notices below the threshold, the legal position changes completely. The route there still runs through the consultation.

Communication decides what people remember

The procedure governs deadlines and forms. Whether a company comes through a reduction in good shape depends on how the news is delivered, and that is where we work with management teams most often.

Who hears first matters as much as what you say. Line managers hear the decision before their teams and are prepared for the questions that follow. Affected employees hear it in person and one to one. The wider announcement follows once those conversations have taken place, and everyone else is informed the same day. Customers and the wider public come afterwards.

The termination meeting lasts ten minutes and stays with people for years. The message sits in the first two sentences, clearly and without preamble. The explanation stays on operational grounds, because that is what the decision rests on, and the person's performance stays out of it. After that, the employee has the floor. Debating the decision itself only stretches out the hard part. The written summary handed over in that meeting sets out the next step: a named contact, dates and the support on offer.

The people who stay need more attention than most plans allow for. They watch closely how the leavers are treated and draw conclusions about their own future. A reduction that comes across as unfair costs a company strong performers nobody wanted to lose. After the announcement, people need clarity about how the work is now shared out, and they need it quickly.

Everyone outside hears the same thing. One named contact, one agreed version, honestly phrased. The people affected apply for jobs in the same region and the same network. How a company conducts itself in this phase shapes its employer brand for longer than any campaign.

Why outplacement earns its place here

Once the separation is settled, the most useful question moves from the past into the future: how does this person land the next role?

That is where outplacement starts. We bring recruiter knowledge to the questions that decide a search: where someone stands in the market, how their application documents read, how they plan the search and how they handle interviews. We also coordinate with the RAV (Regionales Arbeitsvermittlungszentrum, the regional employment centre that runs public jobseeker support) and the unemployment insurance fund. The person always runs their own applications, and our fee stays independent of the outcome. The programme costs CHF 3'500 per person for 20 hours over three months, and this fee is published on our pricing page. How a fair transition works, and what it does for an employer's reputation, is described in our article on outplacement in Switzerland.

For the procedure itself we support you with the timetable, the consultation documents, keeping the deadlines and preparing your managers for the conversations. If redundancies are on the table: book an intro call. Confidential, and it commits you to nothing.

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Note: This article reflects the position in August 2026 and does not replace legal advice in an individual case. Collective labour agreements (Gesamtarbeitsvertrag, GAV, the sector agreements negotiated between employer associations and trade unions) and individual cantons can impose additional duties.

Sources: Swiss Code of Obligations, Art. 335d to 335k and Art. 336, 336a and 336b (English translation, not legally binding) · Adecco Group Switzerland and the Swiss Job Market Monitor at the University of Zurich, Skills Shortage Index Switzerland 2025, 27.11.2025, German only.