Facts
The construction company [Y. AG], employing approximately 400 people, filed for a composition moratorium on 28 March 1995 after the failure of the takeover negotiations by company Z. SA. On the same day, [Y. AG] dismissed its entire workforce. Trade union X. filed an action for the establishment of the violation of the workers' participation rights under Art. 10 let. c of the Participation Act. The Federal Tribunal upheld the appeal and protected the union's claim for a declaratory judgment.Considerations
According to case law and doctrine, the provisions on collective dismissals (Art. 335d et seq. CO) also apply in the event of composition proceedings, and not only in the event of bankruptcy. Although the composition moratorium and the court's approval of the composition do not necessarily lead to the closure of the business, these court decisions do not in themselves constitute a "cessation of operations by court decision" within the meaning of Art. 335e para. 2 CO, which would exclude the application of Art. 335d et seq. CO.
In the present case, [Y. AG] had the concrete intention to carry out a collective dismissal as early as March 1995, even before the composition moratorium was granted on 18 May 1995. Consequently, the provisions on collective dismissals were applicable.
According to Art. 335f CO, the employer must consult the workers' representatives or, failing that, the workers…