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Old 04.03.2021, 15:56
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Can employment be terminated if salary is not payed in time?

My employer (a start-up company) announced that salary is reduced by 50%, for the next 3 months, starting from the previous month (February). They "promised" that the remaining 50% will be paid in 3 months, provided that the next financing round is successful (big question). I asked to lay me off (so that I could get RAV benefit while fully focusing on a search for a new job), but the employer refused. If I resign myself, I would lose 3 months of RAV benefit, if I understand it right. Is there a way to terminate an employment contract based on the fact that the salary is not paid in full? While not losing RAV entitlement? Thank you for your advice!

Last edited by Equanimity; 04.03.2021 at 16:08.
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Old 04.03.2021, 15:59
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Re: Can employment be terminated if salary is not payed in time?

They cannot reduce your salary without your consent.

Tom
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Old 04.03.2021, 16:02
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Re: Can employment be terminated if salary is not payed in time?

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They cannot reduce your salary without your consent.

Tom
Thanks Tom. I told them that, they are saying that they are not actually reducing, they are just postponing
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Old 04.03.2021, 16:23
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Re: Can employment be terminated if salary is not payed in time?

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Is there a way to terminate an employment contract based on the fact that the salary is not paid in full?
This is a translation of a relevant section of the below link:

"5. Special case: Termination without notice due to threat to wages (Art. 337a CO)

According to Art. 337a CO, the employee may terminate the employment relationship without notice if, in the event of the employer's insolvency, he is not provided with security for his claims arising from the employment relationship within a reasonable period of time. This provision corresponds to a concretization of the "important reason" according to Art. 337 CO. However, Art. 337a CO only concerns the employee's future claims and not already forfeited wage claims, which - as mentioned above - can justify the termination of the employment relationship without notice under certain circumstances based on Art. 337 CO. Security for future claims must be provided to the employee upon request, because the employee is obligated to perform work in advance, otherwise he would have to work despite the employer's insolvency.

Inability to pay on the part of the employer exists when the employer is no longer able to meet his payment obligations. This is demonstrated by fruitless seizure, bankruptcy petitions, massive payment arrears and regularly late wage payments. However, temporary liquidity bottlenecks with sporadic payment arrears are not sufficient. As long as the wages are paid when due, one can only speak of payment difficulties, but not of inability to pay.

If the employee wants to terminate the employment contract without notice because of the risk of non-payment of wages, he must first request the employer to provide security within a reasonable period of time. The employer may choose to provide security in the form of a pledge, bank guarantee, blocked account, deposit of securities or surety. If the security is not provided or is insufficient, the employee may terminate the employment relationship without notice. The damage resulting from the termination without notice can be claimed at the Justice of the Peace office. As a rule, these are the outstanding wages and the wage replacement for the duration of the ordinary notice period. If the termination without notice results in unemployment, the employee should register with the local employment office to receive unemployment benefits."

https://awa.tg.ch/public/upload/asse...endem_Lohn.pdf
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Old 04.03.2021, 16:36
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Re: Can employment be terminated if salary is not payed in time?

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Thanks Tom. I told them that, they are saying that they are not actually reducing, they are just postponing
I may be wrong but I think they need a signature from you either for reduction or postponing.

What Mullhollander showed it's great. You ask for a security (blocked account with salary) or you can finish the contract and they still owe the salary for notice period. And RAV as soon as the contract ends. Didn't know this before.

Sadly, people tries to solve their problems while riding on other people's backs, without sweating a bit. During the first lockdown one employer of my wife proposed something similar (half salary). She replied, show me proof that you negotiated the same with the landlord for the rent and electricity company, then I sign. The guy was livid, but she got her full salary and still working there. Not in the most happy terms, but still working there.
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Old 05.03.2021, 03:53
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Re: Can employment be terminated if salary is not payed in time?

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Thanks Tom. I told them that, they are saying that they are not actually reducing, they are just postponing
Ah yes but two can play at that game - tell them that you’ll be postponing the work as well and that oh by the way, you’ll be seeking a court order preventing them from using anything you touched in their product until your wages are paid, of course their chances of finding funding for software were the title is in question will be pretty well zero.... of course if a couple of you do the same, you’ll really put the wind up them.

Perhaps the lawyer that came up the idea of playing silly burgers with the salaries will explain it to them.
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Old 05.03.2021, 22:31
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Re: Can employment be terminated if salary is not payed in time?

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Thanks Tom. I told them that, they are saying that they are not actually reducing, they are just postponing
That's illegal, there's no such leeway. The entire salary for the period must have been paid before the period's end. While shorter periods are lawful, the longest such period allowed for the ordinary salary is the calendar month (bonus and such isn't ordinary salary).

Not paying the salary on time, or only partially, is pretty much the one thing the employer must not do. Make sure you don't agree to any kind of change, and don't sign anything.

There are a few simple and straightforward steps you need to take, but it is paramount that you follow them to the i-dot. After that you have the right to cancel the contract effective immediately. From what I remember it's pretty much as simple as a letter informing the employer that they have five workdays to pay the entire salary, otherwise you reserve the right to quit with immediate effect.

So much for the outlook. Contact your local RAV; they may not be the competent body but they'll know whom you should contact. And if you do quit you'll want to contact them anyway. RAV and Arbeitsamt (or equivalent) come at no cost to you.

See for instance this ruling by the federal court. The sentence in paragraph 6 starting with "Toutefois" translates to something like:
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In any case, such an agreement or usage [payment on or before the 15th of the following month, by explicit agreement or lasting practice] would not be enforceable because Code of Obligations §323.1 doesn't allow the payment of wages to be postponed to more than one month after the time the work was performed. An agreed or customary monthly payment term for work performed in a calendar month must therefore be made before the last day of that month, it can't be set to the 15th of the following month.

Last edited by Urs Max; 05.03.2021 at 22:50.
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Old 08.03.2021, 21:23
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Re: Can employment be terminated if salary is not payed in time?

Thanks a lot for your help, I really appreciate that!
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Old 08.03.2021, 21:28
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Re: Can employment be terminated if salary is not payed in time?

I forgot to mention that up to four(*) monthly salaries are automatically insured independently of the respective employer, see InsolvenzEntschädigung. Here as well, certain procedures are to be followed.


(*) I may have written, falsely, "up to three" elsewhere
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