May an Employer Replace Older Employees with Younger Ones?

Our company has a new, young manager. He wants to lay off me (57) and other loyal employees. All of them are over 55 years old and are to be replaced by younger workers – he believes they are cheaper. He has not personally talked to any of us.

I am a CAD programmer and up to date in my profession. I can't believe that they want to get rid of us just like that, moreover with a notice period of only 3 months. Until a year ago, as an employee representative, I was campaigning for employees to be able to keep their jobs until they retire.

Can the CEO simply replace older employees with younger ones? We are subject to the CEA of the MEM industry.

Hans J.

Being laid off at 57 is a big blow for Hans. Indeed, unemployment among 55- to 65-year-olds has been rising steadily in Switzerland since 2010, according to ILO statistics. Although he is fit in his professional field, Hans may find it more difficult than younger people to find a new job. He could also be unemployed for a longer period of time, as is often the case with older professionals.

Lack of Foresight

The fact that the new managing director wants to replace workers in Hans' company shows a lack of foresight in view of the acute shortage of skilled workers. Only with luck will he find enough young skilled workers. It would be much wiser to retain the existing older skilled workers for as long as possible.

The CEO also thinks too short-sightedly when he assumes that older employees are generally more expensive. He forgets that they have much more professional experience and often a very high level of quality awareness. The fact that they are less efficient than younger workers has long been disproved.

With Hans' resignation, the CEO loses a top performer on whom he could have counted until his retirement.

Termination on the Basis of Age Is Abusive

But what is the legal situation? According to Art. 336 Para. 1 lit. a, the Swiss Code of Obligations provides protection against abusive terminations that are issued without legal justification, for example, on the grounds of age.

This means for Hans: If age was the motive for the termination, he can defend himself against it by filing a lawsuit. He must file an objection with the employer during the notice period – by the last day of the employment relationship at the latest.

The procedure always goes first to a conciliation board. If the conciliation is unsuccessful, a claim permit is issued. With this, an employee can file a lawsuit before the labor court.

Compensation of Maximum 6 Monthly Wages

Hans would have to be able to prove in the legal dispute that his employer terminated his employment because of his age. If Hans wins the legal dispute, the employer will have to pay him compensation of a maximum of 6 months' wages.

However, this penalty of the employer is at best little consolation for Hans. He still loses his job. His damage is many times higher than these compensation payments.

Courts Demand Gentle Exercise of the Right to Terminate

The Federal Supreme Court has confirmed several times in its decisions that employers should exercise the right of termination sparingly. In connection with terminations at an older age, they have a particularly high duty of care.

According to the Federal Supreme Court, older employees belong to a "special category of employees". This is because their dismissal can have particularly serious consequences.

According to the courts, employers have a duty to seek more socially acceptable solutions than termination. They should give older employees a special legal hearing and a "second chance". Accordingly, Hans is entitled to timely information and consultation. His employer is obligated to look for solutions to keep him employed.

Special protection thanks to CEA MEM

According to Art. 25.5 Par. 3, the employer is obliged to treat older and long-term employees in a socially responsible manner. This requires an increased duty of care, particularly in the case of dismissals.

Mandatory Interview and Additional Notice Period

If an employer wishes to terminate an employee's employment after the age of 55, the CEA stipulates that a meeting must be held in good time between the management or the next higher-level superior and the employee concerned. At this meeting, they are informed and heard. Together, they must look for ways to continue the employment relationship. Only after this discussion will a decision be made on any termination of employment.

Employees over the age of 55 and with at least 10 years of service are also entitled to an additional month's notice in addition to the contractual notice period. Hans therefore has four months' notice, not just three.

If Hans were still an employee representative, he would also have been able to benefit from the increased protection against dismissal that applies to such persons under Art. 38.5 CEA MEM.

Fighting Back with Support from Employees Switzerland

The action taken by Hans' employer is not correct. It violates two provisions of the CEA. Firstly, the notice period is incorrect and secondly, no discussion took place between him and the management. Hans has the right to defend himself against his termination. Employees Switzerland advises him to consult its legal service.