Employee Departure: Information to Transmit
The termination of an employment relationship is a significant step, both for the employer and the employee concerned. At this key moment, the employer is obligated to provide a certain amount of essential information. But which information is truly indispensable? This article, written by our partner CJE, Avocats, Conseillers d’entreprises, reviews the main elements to communicate to ensure a clear, smooth, and legally compliant departure.
Behind this step lies a particularly dense set of information obligations for the employer. Some of these obligations stem directly from the Code of Obligations (CO). Others arise from social insurance law (LACI, LAA, LPP) or contractual commitments made on behalf of the employee (daily sickness benefits for loss of earnings). Litigation shows that failure to meet these obligations exposes the employer to reparable damage within the meaning of Art. 97 CO, particularly when it deprives the employee of a benefit to which he or she would have been entitled.
The Legal Cornerstone: Art. 331 para. 4 CO
The employer is required to provide employees with the necessary information regarding their rights concerning a professional provident institution or an insurer (Art. 331 para. 4 CO). This provision is relatively imperative: it cannot be deviated from to the detriment of employees. It covers all insurances concluded by the employer for the benefit of its staff: provident funds, sickness loss of earnings, accidents.
Two practical consequences. Firstly, failure to inform incurs the employer’s contractual liability. Secondly, it is up to the employer to prove that they have informed. Hence the central recommendation of this article: inform in writing and have a copy signed.
Occupational Pension Scheme: Vested Benefits
Upon departure, the employer must immediately notify their provident institution. He or she must then inform the employee that it is their responsibility to indicate where to transfer their vested benefits: the pension fund of the new employer or, in the absence of a new job, a vested benefits account or policy (Art. 4 LFLP). Without instruction from the employee, the assets are transferred to the substitute institution.
Employees Aged 58 and Over: Continued Coverage under the LPP
Since January 1, 2021, an insured person dismissed by their employer after reaching 58 years of age can demand to maintain their insurance with the same provident institution. He or she retains risk coverage, can continue their old-age provision, and keeps the prospect of a pension. In return, he or she assumes the full contributions, both employer and employee shares.
- the right only arises if the termination originates from the employer; a resignation is not sufficient;
- the law does not set a deadline for the request; institutional regulations provide one, generally between 30 and 90 days from the end of the employment relationship;
- some regulations lower the age to 55;
- given Art. 331 para. 4 CO, an employer who dismisses an employee aged 58 or over has every interest in expressly mentioning this possibility in the termination letter, with reference to the institution’s regulations.
Sickness Loss of Earnings: The Right to Transfer to Individual Insurance
When the employer has concluded a collective daily sickness allowance insurance, the departing employee generally has the right to transfer to individual insurance. The regime varies:
- insurance under LAMal: legal right to transfer, to be exercised within three months;
- insurance under LCA, by far the most frequent: the right to transfer stems from the general conditions, often with a deadline limited to 30 days; unemployed persons benefit from a specific right.
The employer must inform the employee about this right and the deadline for exercising it. The Federal Supreme Court has held the employer liable for failing to provide this information. The risk is significant: an employee who falls ill after the end of the contract, without coverage, can claim lost benefits from the employer.
Accident Insurance: End of Coverage and Agreed Insurance
Coverage for non-occupational accidents ceases on the 31st day following the day on which the right to at least half salary ends. The employee can extend this coverage through an agreed insurance, for a maximum of six months. The OLAA expressly requires insurers and the employer to inform the worker of this possibility before the end of coverage. Specifically: an employee who does not immediately resume employment must either take out agreed insurance or reactivate the accident coverage of their health insurance.
Unemployment Insurance: Employer’s Certificate
An employee registering for unemployment must present an employment certificate from their last employer. The employer provides it at the end of the employment relationship or, if unemployment occurs later, within one week of the request. This is a public law obligation, the violation of which can be criminally sanctioned. The official form “Employer’s Certificate” must be completed accurately and completely.
The Classics: Certificate, Statement, Reason for Dismissal
- Employment Certificate (Art. 330a CO): to be provided at any time upon request; at the end of the employment relationship, its spontaneous issuance is good practice.
- Final Statement (Art. 323b para. 1 CO): a written statement accompanies the payment of the last salary, including holiday and hour balances.
- Reason for Dismissal (Art. 335 para. 2 CO): upon request from the employee, the termination must be justified in writing.
Special Case: Cross-Border Employee
The French-Swiss cross-border employee has additional obligations at the end of the employment relationship related to the coordination of schemes.
A cross-border worker within the meaning of Regulation (EC) No 883/2004 who no longer has employment in Switzerland and resides in France registers for unemployment in France, with France Travail. The continuity of rights requires the issuance of form PD U1, which certifies periods of employment and contributions in Switzerland.
The PD U1 is obtained from the competent Swiss cantonal unemployment fund, upon presentation of the international employer’s certificate (to be requested from the employer) and salary slips.
The G permit for cross-border workers is tied to employment in Switzerland. It expires at the end of the activity, or is no longer relevant in the absence of subsequent activity. The employee must, according to cantonal practice, return or have the permit cancelled. In certain situations (active search for new employment in Switzerland, right to unemployment with continued coverage), cross-border status may be temporarily maintained.
A cross-border worker leaving the Swiss health insurance system (alternative LAMal or Swiss affiliation) must register in France (CPAM or other scheme depending on their situation). Form S1, when it was in force, certified healthcare rights; the exact procedures vary, and reference should be made to CPAM instructions. The employer is not responsible for this process, but can direct the employee to the competent contact person.
Art. 5 LFLP allows for the cash payment of vested benefits in the event of definitive departure from Switzerland. However, an insured person who continues to reside and work in an EU/EFTA state and remains affiliated with mandatory insurance there can, as a general rule, only withdraw the extra-mandatory portion; the mandatory portion remains blocked until retirement age, in accordance with the limitations introduced by the agreement on the free movement of persons.
Vigilance
The situation of a cross-border worker must be examined on a case-by-case basis, in conjunction with the provident institution and the employee’s actual plans (does he or she continue to work in France? Does he or she settle elsewhere?). An improperly calibrated request for cash payment can be rejected and generate costly delays.
Information does not mean advice: the employee will be referred to their provident institution and, if necessary, to a specialized advisor.
The cross-border worker is taxed according to the division provided by the Franco-Swiss convention of 1966 and its 2023 amendment, modulated by actual teleworking. At the end of the employment relationship, the Swiss withholding tax statement comes to an end. The employee must, for their part, include this last period in their annual French declaration. The employer does not have to complete the French declaration, but can remind the employee of its existence during the exit interview.
An Exit Letter?
All these obligations can be settled in a single document: an exit letter, provided with the confirmation of the end of the employment relationship, which recalls the LPP vested benefits, where applicable the right to continued coverage for employees aged 58 and over, the right to transfer to individual loss of earnings insurance with its deadline, the end of accident coverage and agreed insurance, as well as the provision of the employer’s certificate. The employee signs a copy. The employer thus holds the proof required of them.