Jurilo by Lawise.ai:
This article is based on Swiss employment law (OR), RAV practice, and Federal Supreme Court case law.
A termination agreement can be an elegant solution for ending an employment relationship by mutual consent – but it also carries legal and financial risks. In this article, you will learn what a termination agreement means in Switzerland, what consequences it has for the RAV (particularly the suspension period), and what you should definitely pay attention to.
WHAT IS A TERMINATION AGREEMENT?
A termination agreement is a mutual termination of the employment contract between employer and employee. Both parties waive ordinary notice and jointly agree on the end of the employment relationship – including the exit date, salary payment, vacation, reference letter, and other matters.
Core Keyword: mutual termination of employment contract
ADVANTAGES OF A TERMINATION AGREEMENT
A termination agreement can offer benefits for both parties:
More flexible exit date (e.g., before the end of the notice period)
Avoidance of conflicts or dismissal protection proceedings
Possibility to arrange conditions such as severance pay, garden leave, or reference letter
For the employer: Legal certainty and predictability
Risks for employees
Despite the advantages, a termination agreement also carries significant risks – particularly with regard to the RAV:
The RAV may classify the agreement as self-inflicted unemployment
Consequence: Suspension period for unemployment benefits (up to 60 days)
No dismissal protection in case of illness, pregnancy, or accident
Waiver of notice periods and statutory entitlements if not properly regulated
Suspension period at the RAV: When does it apply?
The unemployment insurance (ALV) examines in the case of a termination agreement whether the unemployment is voluntary or self-inflicted. If this is affirmed, a suspension period can be imposed.
Typical cases with suspension period:
The employee proposed the termination agreement themselves
There was no objective reason for the contract termination
The employee has no new position in prospect
No suspension period if:
The employer initiated the termination agreement
A dismissal would have occurred anyway (e.g., for operational reasons)
The employee was demonstrably under pressure or health reasons existed
HOW CAN YOU AVOID A SUSPENSION PERIOD?
Do not propose the termination agreement yourself
State in the agreement that the initiative came from the employer
Document the reason (e.g., operational restructuring)
Attach evidence of job search efforts and new position
Conclude the agreement in writing with clear provisions on salary, vacation, reference letter, etc.
WHAT MUST BE REGULATED IN THE TERMINATION AGREEMENT?
A complete termination agreement should contain the following points:
Last working day
Compensation for vacation and overtime
Salary payment until departure
Garden leave (if desired)
Employment reference
Severance pay (optional)
Note on RAV consequences (recommended)
CONCLUSION
A termination agreement in Switzerland can be a fair solution – but only if it is well thought out and correctly worded. Particular caution is required with regard to the RAV and possible suspension periods. Anyone who is unsure should have the agreement legally reviewed before signing.
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10 FREQUENTLY ASKED QUESTIONS ABOUT TERMINATION AGREEMENTS IN SWITZERLAND (FAQS)
What is a termination agreement?
A written agreement by which employer and employee mutually end the employment relationship.
Is a termination agreement permitted in Switzerland?
Yes, it is legally permissible – but only valid if both parties consent voluntarily.
Can I receive a suspension period at the RAV due to a termination agreement?
Yes, if the RAV classifies the unemployment as self-inflicted, a suspension period can be imposed.
How long does a suspension period at the RAV last?
Depending on the case, between 5 and 60 days without daily allowance.
How can I avoid a suspension period?
By proving that the employer proposed the agreement or that a dismissal would have occurred anyway.
Does a termination agreement have to be in writing?
Yes, written form is strongly recommended for evidentiary purposes.
What happens to my vacation and overtime?
These must be regulated in the agreement and usually paid out or taken.
Am I entitled to an employment reference?
Yes, even with a termination agreement, you are entitled to a favorable and truthful reference.
Can I revoke the termination agreement?
Only in exceptional cases, e.g., in case of error, deception, or threat – otherwise it is binding.
Should I have the agreement reviewed?
Yes, absolutely – especially because of possible financial disadvantages and RAV consequences.
Sources:
Art. 337 OR – Termination of the employment relationship
Information sheets from the Regional Employment Centers (RAV)
Federal Supreme Court case law on suspension periods for termination agreements
