Facts
In this case, it involved an employment contract between Meco Mechanical Corporation (MMC) and the employee Karl Leitenmaier. MMC had a contract with the Ministry of War of the United Arab Republic (UAR) to manufacture an aircraft in Egypt. For this purpose, MMC employed European specialists, including Leitenmaier, and deployed them in Egypt.
The employment contract between MMC and Leitenmaier provided, among other things, that the employment relationship would be automatically terminated if MMC's technical assistance to the UAR was prematurely terminated in accordance with the main contract M 2300. On November 28, 1961, MMC declared the employment relationship with Leitenmaier to be terminated as of December 31, 1961. Leitenmaier then had to leave Egypt and find a new job in Europe.
Leitenmaier filed a lawsuit against MMC for payment of the contractual salary for the period from March 1, 1962 to June 30, 1963. The lower courts ordered MMC to pay the claimed amount.
Considerations
The Federal Court held that the agreement between MMC and Leitenmaier to prematurely terminate the employment relationship at the request of the Egyptian government without compensation violated Art. 347 para. 3 of the Swiss Code of Obligations (CO). A conditional right of termination and a conditional automatic termination of the employment relationship may only be agreed upon if the occurrence of the condition does not depend on the will of the…