Switzerland: Dismissal Following a Contested Audit: Swiss Federal Supreme Court Confirms Non-Abusive Termination
On 31 March 2026, the Swiss Federal Supreme Court issued its decision 4A_102/2025 (in French), addressing the circumstances under which an ordinary dismissal following an external audit may constitute an abusive termination under Swiss employment law.
- General Overview: Abusive Dismissal under Swiss Law
Under Art. 336 CO, a dismissal is considered abusive if it is given for certain prohibited reasons — for example, because an employee has exercised a legal right, asserted a claim in good faith, or is a member of a union. Swiss law does not require employers to justify a dismissal, but it prohibits terminations that are motivated by improper or legally impermissible grounds.
Critically, the burden of proof lies with the employee, who must demonstrate that the dismissal was abusive. Establishing this requires showing a causal link between the prohibited motivation and the termination. The mere fact that a dismissal follows a contentious process or occurs in a difficult working environment does not, by itself, render it abusive.
- Facts of the Case
A long-serving employee in a senior managerial role was subject to an external audit commissioned by the employer. The audit identified serious concerns regarding the employee’s leadership style, deficiencies in personnel management, and adverse effects on team members. The employee disputed the audit’s findings and methodology, arguing that the process was biased and procedurally flawed.
Following the audit, the employer terminated the employment relationship by way of ordinary dismissal. The employee brought proceedings, claiming the dismissal was abusive because it was based on a contested and unreliable audit and was designed to remove him rather than address genuine workplace issues. The cantonal courts dismissed his claim, and he appealed to the Federal Supreme Court.
- Key Legal Findings
The Federal Supreme Court dismissed the appeal and confirmed the following:
First, a dismissal is not abusive solely because it follows an external audit whose findings the employee disputes. The Federal Supreme Court emphasised that the employer’s decision to commission an audit and to act on its findings — even if the employee considers the process or conclusions flawed — does not automatically indicate an improper motive.
Second, the mere fact that the dismissal occurred in a difficult or contentious organisational context does not constitute evidence of abuse. What matters is whether the employer’s true motivation was one of the prohibited grounds listed in Art. 336 CO.
Third, the employee failed to discharge the burden of proof. He could not demonstrate that the dismissal was motivated by an impermissible reason rather than by genuine concerns about his leadership conduct and its impact on the team.
- Practical Significance
This decision confirms that employers who conduct external audits and subsequently act on the results — including by dismissing the employee concerned — are not automatically exposed to claims of abusive dismissal, provided the termination is motivated by legitimate workplace concerns. Equally, it underscores the importance of conducting audits in a transparent and procedurally sound manner, as contested processes may give rise to protracted litigation, even where the dismissal itself is ultimately upheld.
