Lenz & Staehelin
Overview
There is no age discrimination law in Switzerland, neither on a national nor local level. No particular age discrimination legislation is expected to enter into force in the near future.
There is a limited protection against age discrimination based on existing legislation (Swiss Code of Obligations, “CO”). According to Art. 336 CO, notice of termination of an employment relationship may be abusive if given because of a quality inherent in the personality of the other party, unless such quality relates to the employment relationship or significantly impairs cooperation within the enterprise. Principally, the age of an employee is considered to qualify as “quality inherent in the personality” of an employee. However, typically other reasons such as lack of performance are the main reasons for the lay-off of an elderly person, which are generally accepted reasons for dismissal. Furthermore, it is important to consider that under Swiss law, either party to the employment contract is in principle free to give notice at any time observing contractual or legal notice periods (”freedom of giving notice”).
Who's covered?
The existing legal provision (Art. 336 CO) only applies to employees. As mentioned, no other provision relating to age discrimination exists. Therefore, no further limitations to categories of employees or independent workers exist.
What enforcement/remedies exist?
There are neither criminal sanctions nor is there an enforcing body to prevent age discrimination. As mentioned, notice of termination given because of an employee's age may be considered to be abusive, and an abusive notice of termination is valid. The term of the employment relationship is, in other words, not influenced by an abusive notice of termination. However, the party which abusively gives notice of termination shall pay compensation to the other party. The compensation is determined by a judge and shall not exceed the employee's wages for six months.
How common are claims?
There are currently very few claims reported on the subject of age discrimination and, as a consequence, no statistics thereon are available.
What claims are most common and what are trickiest issues for employers?
The very few claims reported concern elderly employees who were dismissed shortly before reaching retirement age. The key question typically is whether their age or whether lack of performance or other grounds were the main reason for dismissal. No claims regarding age discrimination in recruitment are reported.
Are there any specific exceptions in your laws?
No.
Retirement ages
The ordinary retirement age of the Swiss old-age insurance (consisting of a mandatory state pension and a mandatory occupational pension system) is 65 for men and (currently) 64 for women (the ordinary retirement age for women is expected to be adjusted to the men's retirement age, however, respective legislation still has to be enacted).
It is common that an employer will fix the retirement age in accordance with the ordinary retirement age of the company's occupational benefit plan. If such retirement age is below 65, an employee will have to accept a reduction in his old age pension from the mandatory state pension system. In such cases supplementary payments of the employer (until age 65) are common but not required. No case is reported in which a company systematically retires employees at a date earlier to the ordinary retirement age of its occupational pension plan. The legal minimum retirement age for occupational pension plans currently is 58.
Interesting cases
There is a recent case decided by the Swiss Federal Supreme Court on December 20, 2005. An employee with 44 years of service was dismissed by his employer a few months before he would have reached his ordinary retirement age. The employee sued the employer for abusive dismissal and claimed a maximum indemnity of 6 monthly salary. The previous instance (Court of appeal of the Canton of Berne) principally held that the employer exercised his right to give notice at any time observing contractual legal notice periods ("freedom of giving notice"). The Supreme Court decided differently and stated that the employer has violated his duty of care towards his employee. It held that the employer has, taking into account the fact that this employee spent his entire professional career with this employer and was very close to retirement age, an increased duty of care and should have tried to find alternative solutions in such situation (i.e. continuation of employment until ordinary retirement age). According to the decision of the Supreme Court this employer had to pay the maximum penalty of 6 monthly salaries. Although this decision may be considered as a landmark decision in the development of age discrimination in Switzerland, its importance should not be overestimated. The courts had to judge an extraordinary situation and the Supreme Court explicitly held that this decision does not mean an interdiction of giving notice of termination to elderly employees. Lack of performance, misbehaviour or restructurings still remain valid reasons to lay-off elderly employees without any sanction.