Termination due to age:
Legal situation, obligations and provisions

Under Swiss law, the principle of freedom of termination applies to open-ended employment contracts. The conclusion and termination of an employment contract are therefore at the discretion of both the employer and the employee and can take place at any time and for any reason, provided that the statutory deadlines and conditions are observed. 

In particular, notice of termination may not be given for an unauthorised or abusive reason. The criteria for this are set out in Article 336 of the Swiss Code of Obligations (CO).

The limits of freedom of termination

One of the grounds for dismissal that is considered abusive is dismissal based on the employee's personality. Dismissal "on the grounds of a characteristic to which the other party is entitled by virtue of his or her personality" is considered unjustified and unfair (Article 336, paragraph 1a CO). The age of an employee is regarded as part of the employee's personality and therefore cannot be a valid reason for dismissal.

In addition, there are further restrictions on the freedom to dismiss. For example, dismissal cannot take place during a qualifying period, such as during an incapacity to work due to illness or an accident. The list of cases of unfair dismissal described in Article 336 CO is not exhaustive, and the severity of the individual cases is left to the interpretation of the legislator.

According to Article 336 CO, the dismissal of an older employee on grounds of age is a discriminatory reason for dismissal because it is based on the employee's personality (Article 336, paragraph 1a CO). 

In fact, this provision has created a type of specially protected employee: older employees who have been with the company for a long time. Under Swiss law, these employees are even entitled to preferential treatment and may never be dismissed lightly.

At what age is an employee "old"?

In Switzerland, however, there is no age limit that legally defines what constitutes an older employee. The definition of the term "older employee" is generally derived from various legal provisions - in addition to CO, also in the Unemployment Insurance Act (UIA), the Occupational Pensions Act (BVG) and the Federal Personnel Ordinance (BPV). While it is generally recognised that an employee over the age of 50 is considered an older employee and is therefore entitled to preferential treatment, in practice employees are generally only classified as older and in need of protection from the age of 59.

Employers have a duty of care (Article 328 CO) towards their employees, whom they must support within the bounds of what is reasonable for the company in order to enable them to carry out their work.

Under Swiss law, older employees who have been with the company for a long time are entitled to special protection and consideration from their employer before their contract is terminated. This protection and consideration is also increased for employees who have been continuously employed by the same employer for at least ten years.

Tolerance for reduced motivation

If an older employee is less motivated in their work than another, younger employee with less experience, this cannot be grounds for dismissal according to case law, provided that the older employee continues to perform their work in an objectively satisfactory manner (Federal Supreme Court ruling 4A_558/2012 of 18 February 2013, Cons. 2). The declining motivation of an employee who is about to retire is therefore not a valid reason for dismissal.

The employer's duty of care

In addition, older employees who have been with the company for a long time are given greater consideration by the employer, as the employer's duty of care applies. This means that the employer must refrain from doing anything that would harm the employee now or in the future. For example, the employer must inform the employee concerned in advance if their work is no longer satisfactory and their performance is deteriorating. According to the Federal Supreme Court, if an employer fails to fulfil its increased duty of care, this is an unjustified reason for dismissal. 

Before considering dismissal, the employer must first issue a warning and propose solutions that allow the employment relationship to continue. In particular, the employer must give the older employee the opportunity to exercise her right to be heard and to defend herself. This applies in particular to employees who are about to retire and for whom the employer must ensure that the end of the employment relationship does not lead to financial losses.

However, all these provisions are left to the free interpretation of the legislator and there is no absolute protection against dismissal for older employees under Swiss law.

If an older employee is of the opinion that their dismissal is age-related and therefore unfair, there are legal remedies with which they can enforce their rights. Firstly, they must ask their employer to state the reasons for their dismissal in writing (Article 355, paragraph 2 CO). The dismissed employee must then object to the dismissal in writing and inform the employer by the end of the notice period (Article 336b, paragraph 1 CO).

If the two parties are unable to reach an agreement, the employee may bring an action before the competent court within 180 days of termination of the employment relationship (Article 336b, paragraph 2 CO).

The burden of proof

The reasons given in writing by the employer may not be the true reasons for the termination. However, the burden of proof, i.e. the responsibility for proving that the dismissal was unfair, lies with the dismissed employee. This is sometimes very difficult or even impossible in the case of dismissals, so it can often be sufficient if there is a high probability and sufficient evidence that a dismissal for age has taken place. It is then up to the employer to provide valid evidence that the dismissal was for a reason other than age and is therefore not discriminatory.

If several reasons are given for the dismissal, some of which are abusive and some of which are not, the reason for dismissal that is likely to have been the predominant and decisive reason for the dismissal is decisive for the assessment of the dismissal.

Tip: If you suspect that you have been dismissed because of your age, it is advisable to seek advice from an employment lawyer. They can inform you of your rights in your individual situation and, if necessary, guide you through the process of lodging an objection.

What should an employer do if they want to dismiss an older employee?

It is still possible to dismiss an older employee if the reason for the dismissal is not age or another abusive reason. If an employer wishes to terminate the employment of an older employee, he must first inform her of his intention and give her the opportunity to decide.

The employer must also examine what alternative solutions are available for the continuation of the employment relationship and propose these to the employee. This may involve the offer of a position or services within the company or group, for which the employee must set a framework (e.g. a support agreement or a target agreement). The employer should also offer early retirement if possible.

In the event of abusive termination, the employment relationship will continue to be terminated in accordance with Article 336a CO. The dismissal is therefore effective regardless of whether the reason for the dismissal is abusive or not. On the other hand, the dismissed employee is entitled to a severance payment. This is determined by the court on the basis of several criteria, such as the severity of the employer's misconduct, the possible misconduct of the employee, the severity of the violation of the employee's personality, the duration and intensity of the employment relationship and the impact of the dismissal on the employee's economic and professional situation.

The more difficult the reintegration into economic life is due to the employee's age, the higher the compensation will be. In any case, the compensation may not exceed the equivalent of six months' salary of the employee.