Letting go after many years of service: the conversation comes before the decision

A role is going away or being reshaped. The person in it is 61 years old, has 24 years of service and no management responsibility, and has always been reliable. May a small business give notice? Yes. Swiss law starts from the freedom to terminate, and that applies here too. But the closer retirement and the longer the service, the harder the courts look at the process: whether the employer told the person early, listened and seriously examined an alternative. If that is missing, a notice that is lawful in itself can become unlawful. That can cost up to six months' salary, and it costs trust inside the team.

So this is a conversation long before it becomes a legal question. In three rulings from 2023 to 2025, Switzerland's Federal Supreme Court upheld compensation against employers, and each time communication played a central role. This article explains what the courts expect, what went wrong in those cases and how to run the conversations so that a fair solution has a real chance. Sometimes that solution is something other than a dismissal.

For businesses on short-time work (Kurzarbeit, the Swiss scheme in which unemployment insurance covers hours not worked), the question will soon become concrete. The maximum of 24 months applies until January 31, 2027. In December 2026 the Federal Council will decide whether to extend it again from February; depending on the economic situation, it intends to return to the regular twelve months in the course of 2027 (press release of October 21, 2026). For the people affected, a lot is at stake. The unemployment rate among 50- to 64-year-olds was below average in September 2026, at 2.6 against 3.0 percent. But once people over 50 are out of work, they stay out longer. On average, 50- to 64-year-olds had been unemployed for 8.9 months, 25 to 49-year-olds for 6.4 months. More than one in four unemployed people aged 50 to 64 had been without a job for over a year, 10'228 of 38'482, according to the State Secretariat for Economic Affairs (SECO).

What the courts expect

Either party may terminate an employment relationship of unlimited duration (Art. 335 of the Swiss Code of Obligations, Obligationenrecht or OR). The law contains no special protection against dismissal for older employees. Age itself, however, is not a permissible reason: notice given on account of an attribute pertaining to the person of the other party is unlawful (Art. 336 para. 1 let. a OR; the German text uses the word missbräuchlich, abusive).

Under the case law, an employer who dismisses someone who has given the business a large part of their working life and is close to retirement has to show particular consideration. This heightened duty of care does not prevent a dismissal. It requires a considerate approach, above all: informing the person early about the intended dismissal and at least examining a more socially acceptable alternative (4A_117/2023, consideration 3.4.3).

There is no formal right to be heard. The Code of Obligations requires neither a hearing nor a warning before notice is given, as the Federal Supreme Court repeated in 2023, 2024 and 2025 (4A_117/2023, 4A_617/2023, 4A_109/2024). How much consideration is required, the court decides case by case, in light of all the circumstances. No statute demands the conversation. The courts expect it anyway, and an employer who skips it carries the risk.

An unlawful dismissal stays valid, so the employment relationship ends. But the employer owes compensation of up to six months' salary (Art. 336a OR) if the employee objects in writing before the notice period ends and files a claim within 180 days of the end of the employment relationship (Art. 336b OR).

Three rulings, three lessons for the conversation

The cook: a letter is no substitute for a conversation

A cook, most recently deputy head chef, had worked at the same restaurant for around 30 years. In June 2020, at 64, he received his notice, about eleven months before retirement. He had health problems, but he was not fully unable to work and had not been on sick leave before the dismissal.

In court the owner pointed to a letter from the sickness benefit insurer, which had announced in March 2020 that its payments would end. That, he argued, was the advance warning, and financially the dismissal was the best solution for the cook anyway. The courts accepted neither argument. After decades of working together, the cook had no reason to expect a dismissal because of an insurer's letter. And even a dismissal that is financially favorable does not release the employer from looking for a more socially acceptable solution together with the employee. Outcome: four and a half months' salary, CHF 27'430 net (4A_117/2023 of May 15, 2023).

Lesson: A letter from a third party is not an advance warning. The advance warning is a conversation with you.

The baker: the manner of the dismissal decides

A baker, 62, had worked for a Geneva business for almost 19 years. His bakehouse in the train station had been closed because of the pandemic. On the day he came back to work after the shutdown, he was called into a meeting and handed a notice letter with no reasons, which he was asked to sign. The interim reference letter (Zwischenzeugnis) issued a few weeks later described him as an excellent professional, never absent, appreciated by everyone.

When he asked why, the business pointed to the closure of the bakehouse, a closure described as temporary. Yet he had worked in another of the company's bakehouses before, and a new baker had been hired there in March. According to the findings of the Geneva court, the way he was treated made him ill. The business still demanded that he work out the rest of his notice period at the other bakehouse.

The Federal Supreme Court stated that neither age nor years of service make a dismissal unlawful on their own. What made it unlawful here was the manner: no explanation, not a word about the other workplace, no empathy at all, in the court's words, and afterward pressure on a man who was ill. Outcome: three months' salary, CHF 15'000 (4A_617/2023 of October 8, 2024).

Lesson: Consideration does not end with the notice letter. What happens afterward counts too.

The CNC lathe operator: what you tell your team will be read alongside

A CNC lathe operator at an industrial company in Ticino was 63 years and 7 months old, had almost 29 years of service and sat on the staff committee. Short-time work had been in place since March 2020. On August 31, 2020, at 8:30 a.m., the director told the staff committee that he would dismiss four employees, without naming them. At 10:00 a.m. the operator learned that he was one of them, on the grounds that the business was being reorganized.

In court the company argued economic hardship. The court required accounting figures to prove it, precisely because of what the company itself had said. In July 2020 it had told its staff that one division was under strain while another had achieved excellent results. In December, after the dismissal, it let staff know that it had needed no loans from the state, had "good liquidity" and was "a healthy company". The figures never came. Nobody had raised early retirement or reduced hours, even though the man had taken on other tasks in the past. And because short-time work had been approved, the court saw no urgency. Outcome: four months' salary, CHF 21'000 (4A_109/2024 of March 18, 2025). The consequences for him went unchallenged: no new job, the loss of his pension because his retirement savings went to a vested benefits account, and unemployment benefits of 70 percent of his previous salary.

Lesson: What you tell the team about the situation has to match the reason you give the individual. Both end up in the same file.

All three employers were in principle entitled to give notice. The mistakes repeat themselves: the person learned too late or without explanation, a possible alternative never reached the table, and in the operator's case what the company said elsewhere did not match the reason. A fair process avoids all three.

Who this applies to

There is no fixed threshold for age or for years of service. The Swiss tech industry association Swissmem gives a rule of thumb of about 55 years of age and 10 to 15 years of service. In the three rulings, the employees were between 62 and 64 and had 19 to 30 years of service. In June 2026 the Federal Supreme Court upheld the view that a 56-year-old client advisor with almost 15 years of service was not close to retirement; the decline in business was documented and the claim for compensation failed (4A_651/2025). In an older case, by contrast, an employee born in 1951 with just over eleven years at the company was enough, because the employer had never clearly told him that shortcomings in his work put his job at risk (4A_384/2014, two months' salary).

The courts expect less consideration toward senior management, for example a chair of the executive board or the CEO of a hotel (4A_44/2021, 4A_186/2022). They look particularly closely at skilled employees without management responsibility and with a good track record when retirement is near. That describes the cook, the baker and the lathe operator.

So know the person's reference age, the age at which the state pension (AHV) is paid without reduction. For men it is 65. For women it is rising under the AHV 21 reform: women born in 1962 reach it at 64 years and 6 months, those born in 1963 at 64 years and 9 months, and from the 1964 cohort onward it is 65 (Federal Social Insurance Office).

Before the first conversation

Clarify and document the reason. Write down in a few sentences why the role is going away or changing, and attach the figures. The employee can ask for the reasons in writing (Art. 335 para. 2 OR), and then the real reason belongs in that letter. A diplomatic mission in Geneva first refused to give a 62-year-old secretary with more than 39 years of service any reason, then raised shortcomings in court that it could not prove. That cost CHF 30'000 (4A_307/2022).

Check what you have told the team. Reread what your emails, staff briefings and speeches have said about the business in recent months. If they said things were going well, your reason has to explain the change.

Examine alternatives seriously. An alternative has been examined seriously if you can write down what it costs, what it achieves and why you chose or rejected it. Options include reduced hours, a different role or location, a handover and training role until retirement, voluntary early retirement if the pension fund regulations allow it, and short-time work as long as the loss of work is temporary. When retirement is only months away: keeping the person on until the reference age.

You should be able to answer these seven questions before the first conversation:

1. When does the person reach their reference age?
2. What do the pension fund regulations say about continued insurance and early retirement, and what would each cost the person?
3. Which alternatives have we examined, and with what result?
4. How do we document the reason, and does it match what the team has heard from us?
5. Is short-time work in place for this person or their department?
6. Who leads the conversation, who else attends, who takes notes?
7. What will the team be told, by whom and when?

Three conversations instead of one

In all three cases, the person was presented with a finished decision without having been involved beforehand. Three conversations over about two weeks work better. The two weeks are a recommendation; no legal rule sets them. What matters is that something is genuinely examined between the first conversation and the decision.

Conversation 1: the situation and the intention (day 1)

The person hears in person and early that their role is under discussion. Say that nothing has been decided, but only if that is true. If the decision has already been made, this conversation comes too late, and the person will notice.

"I'd like to talk with you about something that hasn't been decided yet. We need to reorganize the work in your area, and your role is affected. Before we decide anything, I want to look at the options together with you."

"You've worked here for many years, and you've done a great deal for this company. That's why you should hear this early, and from me."

"Take your time. If you'd like, bring someone you trust to our next meeting."

Write down: brief notes, the date of the next meeting, the offer to bring a person of trust.

Conversation 2: listening and examining (about a week later)

The person shares their view and their proposals. You show which options you have examined, including those that do not work.

"How do you see the situation? What would a good solution look like for you?"

"We've looked at three options: reduced hours, a handover role until your retirement and early retirement. I'll show you what we found, including what doesn't work and why."

Write down: every proposal the person makes, with your answer and the reasoning.

Conversation 3: the decision (about two weeks after the first)

You decide, explain the decision and set out the next steps. If there is a solution that works for both sides, put it in writing. If there is none:

"We've looked at your proposals carefully, and we haven't found a way to keep your role. So we are giving notice to end your employment at the end of February. After so many years, this is not an easy moment. I'll walk you through what happens next and how we will support you."

Write down: the notice or the agreement, all dates, the information on the pension fund and unemployment insurance, the reference letter, the support offered and what the team will be told and when.

If the person falls ill between the conversations, the protected period described below applies. Then you wait. Nor is this plan a way to get ahead of a foreseeable absence.

Three sentences have no place in any of these conversations:

• "At your age…" Age is not a permissible reason, and this sentence sounds like one.
• "You'll be retiring soon anyway." To the person, every remaining year counts: salary, contributions to the AHV and the pension fund, the pension that follows.
• "Financially this is the best solution for you anyway." That is exactly the argument that failed in the cook's case.

The questions that will come

Expect this question after the first conversation: "And what about my pension fund?" You do not need every answer. But you should know these points.

Pension fund. If the employment ends after the person's 58th birthday because the employer gave notice, the person can ask to remain insured with the current pension fund (Art. 47a BVG, the federal act on occupational pensions). The savings then stay in the fund. The person pays the contributions for death and disability cover and administration, and for retirement savings only if they choose to keep building them. Some pension fund regulations allow this from age 55. What early retirement would cost is also in the regulations. Request them before the first conversation.

Termination agreement. An agreement instead of a dismissal, for example with a severance payment, garden leave or a longer notice period, looks generous and can cost the person dearly. The unemployment insurance treats a termination by mutual agreement like a resignation (SECO directive AVIG ALE, para. D24) and can suspend the daily allowance for up to 60 days (Art. 30 AVIG, the unemployment insurance act). In the view of the Federal Social Insurance Office, an agreement can also count as termination by the employer for the pension fund if it can be shown that the employer took the initiative; in case of doubt, the employee has to prove this (Pension Bulletin No. 153). If you want an agreement, record in writing that the initiative came from the business, do not shorten the notice period and give the person time to have the agreement reviewed before signing.

Unemployment insurance. From age 55, with at least 22 months of contributions, a person can receive up to 520 daily allowances (Art. 27 AVIG). If benefits start within the last four years before the reference age, another 120 daily allowances are added and the benefit period runs until the AHV pension begins (Art. 41b AVIV, the implementing ordinance). The daily allowance covers 70 or 80 percent of insured earnings (Art. 22 AVIG).

Bridging benefits. People who exhaust their unemployment benefits in the month they turn 60 or later can receive bridging benefits for older unemployed people until the reference age. The conditions include 20 years in the AHV, five of them after age 50, and net assets below CHF 50'000, or below CHF 100'000 for married couples (Art. 5 ÜLG, the bridging benefits act).

Illness. From the sixth year of service, notice may not be given during an illness for up to 180 days. Notice given during that protected period is void, and a notice period already running is suspended (Art. 336c OR). Our article on sickness absence at a small business covers the rest.

The farewell is part of it

How a business says goodbye to someone after 25 years is watched by the whole team. Those who stay draw conclusions for their own future.

• Agree with the person what the team will be told: what, by whom and when. The team hears it the same day, after the person and before customers and suppliers.
• No immediate garden leave without a reason. It is lawful, and in a restructuring at the very top it is nothing unusual (4A_186/2022). For a skilled employee after decades, it feels like being thrown out. In the leading 2005 decision, the immediate garden leave of a heating installer in his 44th year of service was one of the factors when the Federal Supreme Court awarded six months' salary (BGE 132 III 115).
• Honor what came before. Ask the person whether and how they would like to say goodbye, and plan the handover so they can show what they know.
• Support the next step. People over 50 take longer to find work, as the figures above show. After notice, the employee is entitled to the time needed to look for a new job (Art. 329 para. 3 OR) and to a reference letter (Art. 330a OR). Professional support helps with taking stock, application documents and interviews; the person always runs their own applications. Our article on outplacement in Switzerland explains how it works.

What a mistake costs

At a monthly salary of CHF 6'500, four months' salary, as in the operator's case, comes to CHF 26'000. The maximum of six months' salary is CHF 39'000. Add legal fees, management time and what the team learns from the episode. Against that stand three conversations of about an hour each, plus preparation. If several roles go at the same time, separate rules apply above certain thresholds; our article on mass layoffs at a small business sets them out.

What you can do this week

1. Look up the person's reference age, years of service and notice period (by law three months from the tenth year of service, Art. 335c OR) and request the pension fund regulations.
2. Write down the alternatives, with costs, benefits and your assessment.
3. Reread what you have told the team about the business in recent months.
4. Schedule the first conversation: who leads it, who takes notes, and that the person may bring someone they trust.

If you would like support, we will go through the seven questions with you before the first conversation takes place. As your HR Business Partner, we prepare the conversations with you and attend them if you wish. If you prefer to lead them yourself, you can prepare in coaching. We support the person who is leaving through outplacement on the way to their next role, at a fixed fee of CHF 3'500 per person. A first conversation takes 30 minutes: book an intro call.

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Note: This article reflects the position in November 2026 and does not replace legal advice in an individual case. The rulings concern individual cases, and the courts decide each one in light of all the circumstances. Collective labor agreements (Gesamtarbeitsverträge, GAV) and pension fund regulations can contain further rules. On short-time work, the press release of October 21, 2026 applies; the Federal Council will decide on the period from February 2027 in December 2026.

Sources (21)

Sources: Federal Supreme Court rulings 4A_117/2023 of May 15, 2023 (German), 4A_617/2023 of October 8, 2024 (French), 4A_109/2024 of March 18, 2025 (Italian), 4A_307/2022 of January 18, 2023 (French), 4A_651/2025 of June 16, 2026 (French), 4A_384/2014 of November 12, 2014 (German), 4A_44/2021 of June 2, 2021 (German), 4A_186/2022 of August 22, 2022 (German) and BGE 132 III 115 (German) · Swiss Code of Obligations, Art. 328 to 336c (English translation, not legally binding) · BVG, Art. 47a (German) · AVIG, Art. 22, 27 and 30 (German) · AVIV, Art. 41b (German) · ÜLG, Art. 5 (German) · Federal Social Insurance Office, Pension Bulletin No. 153 of September 16, 2020, para. 1039 (German) · SECO, directive AVIG ALE as of July 1, 2026, para. D24 (German) · Federal Social Insurance Office, bridging benefits in detail (German) · Federal Social Insurance Office, AHV 21 (German) · SECO, labor market situation in September 2026, October 6, 2026 (German) · Federal Department of Economic Affairs, short-time work press release of October 21, 2026 (German) · Swissmem, older employees and the freedom to terminate, July 2, 2025 (German).