In a lay-off the employer temporarily terminates work and the payment of wages and salaries, while the employment relationship remains in effect in other respects.

An employee can be laid off as a result of a reduction in the work available or a deterioration in the prerequisites for offering work. The lay-off may be implemented for financial or production-related reasons. A lay-off can be based on a unilateral decision by the employer or an agreement between employer and employee. In such cases, too, the lay-offs may only be implemented as a result of the employer’s action or its financial situation.

Implementing lay-offs

A lay-off can be implemented for an indefinite or a fixed period and it may mean termination of all work or shortening of working hours. An employee working on a fixed-term contract may be laid off only when he/she is working as a substitute for a permanent employee and the employer would have the right to lay off the permanent employee.

The employer must notify the employee of the lay-off well in advance. The employer must also provide the employee with a personal lay-off notification no later than 14 days before the start of the lay-off, specifying the reason for and start date and duration of the lay-off.

Further information:

Guidance and supervision of  labour legislation: Occupational Safety and Health Administration (Osha)
Law-drafting: Tarja Kröger, tarja.kroger(at), Nico Steiner, nico.steiner(at)