Swiss Parliament Bans Golden Parachutes for Top Public Managers as German Courts Reinforce Employee Protections
19.06.2026 - 23:23:10 | boerse-global.de
Switzerland’s upper house of parliament, the Ständerat, voted 21 to 13 on 18 June 2026 to outlaw severance payments for senior executives in the federal administration and state?owned enterprises such as the Swiss Federal Railways (SBB). The move aims to align federal personnel law with the general code of obligations. Finance Minister Karin Keller?Sutter warned that the ban could be circumvented through extended notice periods or paid leave with continued salary. The final decision now rests with the Nationalrat, the lower chamber.
While Swiss lawmakers clamp down on exit pay, Germany is grappling with large?scale job cuts and simultaneous judicial efforts to strengthen dismissal protection.
The specialty chemicals group Evonik is deepening its efficiency drive under the programme “Tailor Made.” By the end of 2029, the company plans to eliminate roughly 3,200 positions worldwide. Around 2,150 of those cuts will hit Germany, targeting business and administrative units. Evonik will shut down its polyester business in 2027, leading to the closure of the Witten site and the loss of its 266 employees. Further reductions are slated for Marl and Shanghai. However, most of the German workforce is covered by a dismissal protection agreement lasting until the end of 2032.
Ford is also pushing ahead with a radical restructuring in Cologne. Approximately 3,500 jobs are affected, mainly at the Niehl plant and in development and administration. Weak demand for the electric models Explorer and Capri is driving the cuts. The Cologne workforce will shrink to around 7,600 employees. Affected workers can opt into a voluntary programme, with severance calculated based on tenure and monthly salary.
The Federal Labour Court (BAG) has sharpened the rules for mass dismissals. If an employer fails to file a mass layoff notification with the Federal Employment Agency, or if the notification is flawed, any subsequent dismissal is void. This applies especially when the notification is submitted before works council consultations have concluded. For companies with more than 500 employees, the obligation to notify kicks in as soon as 30 dismissals are planned.
In a separate ruling on 18 June 2026, the BAG strengthened protections for workers on parental leave. Employees who apply for multiple parental leave periods in a single letter enjoy special legal protection before each period. A dismissal without prior authorisation from the competent authorities is then invalid.
Severance negotiations are drawing attention to hidden long?term costs. Experts recommend staggered transition payments for executives rather than lump sums, citing tax burdens and gaps in company pension plans. The loss of pension entitlements can be so substantial that it completely wipes out the advertised gross severance.
The standard severance formula in Germany is: monthly salary multiplied by years of service multiplied by a factor of 0.5 to 1.5. For IT specialists, disputes often arise over whether benefits such as company car allowances should be included. One social?security trick: if a severance agreement includes an irrevocable leave of absence and the employee transitions directly into retirement, a reduced health insurance contribution rate applies from the start of the leave period.
