Entrepreneur’s Diary #84 – Dismissal Protection

Several times each year, I meet entrepreneurs from Switzerland in St. Gallen or Zurich. It is a meeting with a circle of persons whom I hold in very high esteem, indeed.

And, of course, being the only German national in the group, I am often subjected to jokes. Or sometimes they pity me. For instance when we are talking German dismissal protection and the extremely high financial settlements for employees of long standing habitually paid in our country. Those are the times when they start consoling me without me ever even having to ask for it. And I meet with surprise: how can such a system actually work?

I inform them that, thanks to thirty years of practice as entrepreneurs, we can actually now deal with our dismissal protection quite well. And that, basically, it is all a question of entrepreneurial culture.

Still, the Swiss do not understand our dismissal protection. In fact, they keep telling me that people living in Switzerland do not even want it. It is easy to explain:

If people in Switzerland wished to have this kind of dismissal protection, all they would have to do is vote for it in a plebiscite.

Those are the moments when I find no further arguments to support another point of view, so I choose to keep quiet – or else change the subject.

Secretly, however, I think my Swiss colleagues are right. In a fair relationship between entrepreneurs and his employees (I intentionally refrain from calling them “supplier of a job” and “jobholder”), the asymmetrical dismissal protection is an unfair ingredient. The employee can give notice at any time, mostly after having found a more lucrative job. If, however, the enterprise wishes to or has to make him redundant, it might easily cost a 6-digit number of Euros if the employee has been working for the company long enough.

And what is worse: the dismissal protection is not only detrimental for the “evil” employers; it is also and particularly detrimental for the “employees”. How many people do you know who, as time went by and for whatever reason, distanced themselves more and more from the company. Still, there was no reason for them to look for alternatives or further education, since, basically, they were secure and could trust in the dismissal protection.

Over the years, “distance” becomes “inner notice“. The hope that a positive change might come dies and the employee develops a mentality of “let them come”. In the worst case, there will be a huge compensation the company has to pay. After all, you earned it, didn’t you? Later, you can still see what the future will bring. Mostly, there are not that many years left before you get your pension. Remembering the past will be a substitute for investing energy into the future.

There might be quite some money in store for leaving. But then, leaving itself will not give you a new task or work. Looking forward to a compensation often destroyed the motivation to further educate yourself and remain agile. And to look for alternatives early. This will promote sullying behaviour, according to the motto: “I can sit this out“. Which, as we all know, will not make you any more willing to change or accept progression.

If things do not go too well, the money may be gone earlier than you thought. You will not get another job without accepting considerably less pay. And living without a job is often not easy to digest.

Unfortunately, I know quite a few people who eventually have nothing to show for their labour. On the other hand, I know a number of enterprises that still have quite large sums burdening them from earlier years – both phenomena were caused by decades of inertia promoted by dismissal protection.

RMD

(Translated by EG)

P.S.

It was particularly bad at the enterprise where I used to work. They had a company pension. If you gave notice before you had reached the 10th year, you were not entitled to it. With the 11th year, however, this compensation – for security-oriented people – was already quite substantial – and it increased with every added year. Some of my friends gave notice on the dot after 10 years. A few did so some years later, because they had taken extra time for new orientation. But many stayed. Until the end. Consequently, huge numbers went the way of “release with compensation“. Over the years, their creeping discontent grew all the time. They had been manipulated and corrupted by the breath-taking compensation. And, with the exception of a few winners, most of them did not do well with this compensation. In retrospect, I am quite happy that I gave notice after a little more than four years, even though it cost me two thirds of my company pension.

P.S.1


“Swiss Conditions”

Dismissal Regulations

In Switzerland, the notice period is as follows:

There is dismissal protection if you have been ill or pregnant:

Dismissal Protection

After the end of the qualifying period, the employer may not give notice if the employee has been fully or partly unable to work without his own fault, for instance because of illness or accident, during the following periods:

If an employer gives notice during this time, it is invalid.

If illness starts after the employer has given notice, the dismissal protection period will be extended by the time off caused by the illness; the notice will, however, remain valid.

During pregnancy and during the first 16 weeks after a woman has given birth, the employer cannot give notice.

Besides, the Swiss law knows the term improper notice. This is, for example, if the notice happened because of a personal characteristic that has nothing to do with the work.

Source: http://www.gaav.de/arbeitsrecht-kuendigungsfristen.php

P.S.2

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