Swiss Federal Supreme Court – Landmark Judgement for Internal Investigations

In its judgement 4A_368/2023 of 19 January 2024 (in German), the Swiss Federal Supreme Court (FSC) clarified fundamental questions relating to internal investigations in cases of suspected misconduct by employees in the workplace.

The judgement has significance beyond the individual case. In particular, it is of great relevance in the context of internal investigations into possible antitrust law or other compliance violations.

The subject of the proceeding was the question of whether an ordinary termination was abusive. In this context, the question of whether the internal investigation into allegations of sexual harassment had been conducted correctly also had to be answered.

The FSC denied an abusive dismissal with ground-breaking considerations that can be summarised as follows:

• Employers do not have to adhere to criminal procedural rules in internal investigations. These do not apply in private law. For example, the accused person does not need to be informed of the purpose and content of the investigation before the first confrontation. There is no right to preparation and it is sufficient if the employee concerned is informed about the purpose and content of the questioning at its beginning.

• With regard to the specification of the allegations and the identity of the informant, the FSC clarified that abstract, anonymised descriptions of these allegations are sufficient. It was also beyond question for the FSC that the identity of the whistleblower may be treated confidentially. There is neither a duty of disclosure nor an obligation to investigate possible conspiracy endeavours against the accused.

• In principle, persons accused are not entitled to be accompanied by a confidant in the event of a possible confrontation with the allegations made. If this person is not present, this does not mean that the entire investigation is inadequate or that the corresponding dismissal is abusive. According to the FSC, this also applies if the internal regulations actually provide for such right.

• An ordinary dismissal following an internal investigation is not abusive, even if the original suspicion is not confirmed. The FSC thus confirms the principle of freedom of dismissal, meaning that no special reasons are required for an ordinary termination. This is only limited by the prohibition of abuse.

Internal investigations are an incisive instrument for employers with usually far-reaching consequences for anyone involved. For this reason alone, employers are well advised to give their internal investigations specific guidelines and to proceed professionally, with the necessary distance and in a proportionate manner.