The employment contract can be terminated by either party provided that notice period requirements are complied with.
No list of valid grounds is provided. However, this does not result in a total freedom to terminate the contract: it must be understood in light of the existence of prohibited grounds. In addition, the CO states that dismissal ("congé") should not constitute an abuse of right (art. 336 CO).
For termination with immediate effect (no notice), fair reasons (good cause) are requested. (art. 337 CO)
Art. 336 CO provides as a general principle that "1. notice of termination is unlawful where given by one party:
a. on account of an attribute pertaining to the person of the other party, unless such attribute relates to the employment relationship or substantially impairs cooperation within the business;
b. because the other party exercises a constitutional right, unless the exercise of such right breaches an obligation arising from the employment relationship or substantially impairs cooperation within the business;
c. solely in order to prevent claims under the employment relationship from accruing to the other party;
d. because the other party asserts claims under the employment relationship in good faith;
e. because the other party is performing Swiss compulsory military or civil defence service or Swiss alternative civilian service or a non-voluntary legal obligation.
Further, para. 2 provides that notice of termination given by the employer is unlawful when given:
a. because the employee is or is not a member of an employees' organisation or because he carries out trade union activities in a lawful manner;
b. while the employee is an elected employee representative on the staff council for the business or on a body linked to the business and the employer cannot cite just cause to terminate his employment;
c. in the context of mass redundancies, without his having consulted the organisation that represents the employees or, where there is none, the employees themselves (Art. 335f).
Para. 3. provides that the protection against termination of employment afforded pursuant to paragraph 2 letter b to an employee representative whose mandate has ended as a result of transfer of the employment relationship (Art. 333) continues until such time as the mandate would have expired had such transfer not taken place."
This should also be read in the light of Art. 8 of the Swiss Constitution that specifically establishes a general prohibition based in particular on grounds of origin, race, gender, age, language, social position, way of life, religious, ideological, or political convictions or because of a physical, mental or psychological disability.
In addition, Art. 336c CO provides that after the probation period has expired, the employer may not terminate the employment relationship:
1.a. while the other party is performing Swiss compulsory military or civil defence service or Swiss alternative civilian service or, where such service lasts for more than eleven days, during the four weeks preceding or following it;
b. while the employee through no fault of his own is partially or entirely prevented from working by illness or accident for up to 30 days in the first year of service, 90 days in the second to fifth years of service and 180 days in the sixth and subsequent years of service;
c. during the pregnancy of an employee and the sixteen weeks following birth;
d. while the employee is participating with the employer's consent in an overseas aid project ordered by the competent federal authority.
2. Any notice of termination given during the proscribed periods stipulated in paragraph 1 is void; by contrast, where such notice was given prior to the commencement of a proscribed period but the notice period has not yet expired at that juncture, it is suspended and does not resume until the proscribed period has ended.