Under art. 335 para. 1 of the Swiss Code of Obligations (CO), an employment contract concluded for an indefinite period may be terminated by either party. Under Swiss employment law, the right to terminate an employment contract is unrestricted, so that a notice of termination does not in principle need to be based on a specific reason in order to be valid.

However, the fundamental right of each party to terminate such a contract is limited by the provisions on unfair termination (art. 336 ff CO).

Art. 336 para. 1 and 2 of the Swiss Code of Obligations lists the cases in which (ordinary) termination is unfair. This list is not exhaustive, and unfair termination may also result from other circumstances, in application of art. 2 para. 2 CC (prohibition of abuse of rights). However, these other situations must be comparable in seriousness to the cases mentioned in art. 336 CO. In order to resolve the legal issue of possible abuse of rights, it is first necessary to establish the real reason for the notice, which is a matter of assessing the evidence.

A dismissal is not per se unfair if it affects an older employee with considerable seniority (judgments 4A_117/2023 of 15 May 2023 recital 3.4.2, 4A_44/2021 of 2 June 2021 recital 4.3.2). Even more recently, the Federal Court recalled that the law of obligations does not require the employer to hear or warn the employee before notifying him of his dismissal (aforementioned decision 4A_117/2023, recital 3.4.2). There is therefore no formal right to be heard before dismissal, the mere violation of which would render ordinary dismissal unfair. Nor does private law impose a general duty to subject a dismissal to the principle of proportionality, i.e. to take the most moderate measure possible and to lay off only as a last resort (see the above-mentioned judgments 4A_117/2023, para. 3.4.2, and 4A_44/2021, para. 4.3.2, and the references therein).

 This being the case, the employer must show special consideration for employees who are close to retirement age and who have dedicated a large part of their career to the employer (judgment 4A_384/2014 of 12 November 2014, paras. 4 and 5, cited again relatively recently in the above-mentioned judgment 4A_117/2023, para. 3.4.2). The extent of this consideration is examined on a case-by-case basis; a general rule can hardly be laid down. The circumstances of the case are decisive, as the most recent judgments have consistently pointed out (see, for example, the above-mentioned judgments 4A_117/2023 recital 3.4.2 in fine, 4A_44/2021 recital 4.3.2 in fine). It is this lack of consideration that has tipped the balance in cases involving employees aged 64, or 62 respectively, and their employer (judgment 4A_117/2023 cited above; judgment 4A_307/2022 of 18 January 2023, in particular recital 4.2). A large part of the legal literature approves of this case-by-case assessment (…), even if some authors regret that the case law has not set sufficiently precise benchmarks (…).

It has also been pointed out that the notice of termination in such cases may reflect a disproportion of the interests involved, making it appear abusive (ATF 132 III 115 rec. 5.5).

The – unavoidable – fact that the dismissal leads to a deterioration in the employee’s economic situation is not in itself decisive (judgments 4A_390/2021 cited above, recital 3.1.5; 4A_419/2007 of 29 January 2008, recital 2.7).

In the present case, the appellant company complains, inter alia, of a violation of economic freedom (art. 91 para. 1 Cst., recte art. 94 para. 1 Cst.), combined with the right to terminate an employment contract (art. 336 CO).

 It is clear from the facts found by the cantonal court that the employee was dismissed on 27 May 2020, when he was 62 years old and had worked as a baker for the appellant for almost 19 years. During all these years, he had carried out his duties with seriousness, rigour and punctuality; the employing company described him as an excellent professional who was never absent and was appreciated by both his colleagues and his superiors.

The cantonal court ruled that the dismissal served on 27 May 2020 was unfair. The dismissal took place on the same day that the employee returned to work, at the end of the period of technical unemployment due to the COVID-2019 pandemic, which had forced the company to cease operations on 18 March. A dismissal interview was held, during which the employee was given a letter which he was asked to sign. The employer cited a reduction in the production of merchandise, linked to a drop in the number of sales outlets, which had led it to temporarily close the laboratory at C.________ station, which was not due to reopen for several months. As a result, the employee found himself permanently dismissed due to the temporary closure of his workplace. This was despite the fact that a new baker had been hired at the beginning of March 2020 at the D.________ laboratory to replace an employee who had left the company.

According to the cantonal court, the employing company should have discussed the planned temporary restructuring with the respondent employee, and examined with him what alternative solutions were available, which did in fact exist, since he had already worked at laboratory D.________ in 2016, and the bakers worked alternately at workshop D.________ and laboratory C.________, and could be assigned to either of these two workplaces from time to time. She could have shown him a little empathy. Instead, she dismissed him curtly.

The respondent employee was so shocked by the procedure that he fell ill. The medical certificates produced in the proceedings revealed the psychological suffering that this situation had caused, reporting major depressive episodes and two hospitalisations in May and June 2021, the first for protection from suicidal ideations.

This lack of consideration was confirmed after the employee was notified of his dismissal. Although the dismissed employee had been ill for more than three months, the employer had ordered him to serve the remainder of his notice period at the D.________ laboratory, on the grounds that the loss of earnings insurance had – initially – considered that a return to work could be envisaged at a given date.

 There is nothing in the appeal to undermine the decision of the Geneva judges.

It is clear that it is not the employee’s age, nor the number of years worked for the employer, that per se makes the dismissal unfair. The cantonal courts did not rule otherwise. In their view, it was the manner in which the employer had served notice of the dismissal that gave it this connotation.

The Federal Court has no reason to criticise the manner in which the previous judges exercised their discretion. The appellant vainly cites the case law of the Federal Court, which was correctly reproduced in the judgment under appeal, in an attempt to show that the Geneva judges had lost sight of the line they had drawn. When an employee devotes a large number of years to the same employer and finds himself so close to the legal retirement age, the employer must act with all the more consideration. In the present case, the employee was dismissed without further explanation, as the cantonal court found in its final decision. When he subsequently sought to know the reasons for this, the employer took refuge behind its decision to close the station laboratory, a decision that was nevertheless described as ‘provisional’, at least at the time, and even though it had just hired a new employee for the D.________ laboratory, where the respondent had already worked and where he could still have done so if the station laboratory had to be closed for some time. This modus procedendi, devoid of any empathy, caused the respondent employee to sink into a state of severe depression. Despite this situation, to which she gave no credit or other importance, the employer summoned him to report to work at the D.________ laboratory to serve out the remainder of his notice period, needlessly adding to his distress. In sum, the result of the cantonal court of appeal was not manifestly unfair, nor was there any shocking inequity.

There is no point in the appellant pointing to an alleged violation of art. 91 of the Swiss Constitution (recte art. 94 para. 1 of the Swiss Constitution) and art. 336 of the Swiss Code of Obligations in an attempt to establish a violation of federal law, which in reality does not exist.

The appellant’s complaints must be rejected.

(TF 4A_617/2023 of 8 October 2024)

Me Philippe Ehrenström, attorney, LLM