No automatic termination at retirement age
It is still widely assumed that an employment contract expires automatically as soon as an employee reaches the statutory retirement age. However, the law does not provide for automatic termination in this case. Even if parties have explicitly included a clause in the employment contract stating that the contract ends automatically on reaching retirement, such a provision is, in principle, void.
If either of the parties terminates the employment relationship, a legally valid act of termination is still required: dismissal by the employer, termination by the employee or termination by mutual agreement.
The exception in the Employment Contracts Act
In principle, the notice period in the case of dismissal by the employer depends on the employee’s length of service. The longer a person’s career, the longer the notice period.
However, Article 37/6 of the Employment Contracts Act provides for a specific exception for employees who reach statutory retirement age. Under certain conditions, the employer may terminate the employment contract subject to a shortened notice period of no more than twenty-six weeks.
This arrangement only applies if:
- it concerns a permanent employment contract;
- the contract is terminated by the employer; AND
- the employment contract ends with effect from the first day of the month following the month in which the employee reaches the statutory retirement age.
It is important to note in this regard that the period of 26 weeks is a maximum. If calculation in the usual way results in a shorter notice period, this shorter period still applies.
The Supreme Court provides clarification
Case-law has been divided on the application of this arrangement in recent years. Some labour courts accepted that employers were able to give a longer notice period, as long as the employment contract was terminated at least twenty-six weeks before the statutory retirement age was reached.
The Supreme Court has now expressly rejected this interpretation in its ruling of 12 January 2026. In this ruling, the Court confirms that the deviation provision must be interpreted as limiting. In other words, the notice period must not take effect any earlier than twenty-six weeks before the date on which the employee reaches statutory retirement age. Conversely, it is not possible to reduce the twenty-six-week period if the employer terminates the contract too late.
Caution is still required – risk of discrimination
The fact that Article 37/6 of the Employment Contracts Act allows a shorter notice period does not mean that the retirement age constitutes sufficient grounds for dismissal by itself. If an employer dismisses an employee purely on the grounds of reaching retirement age, it risks a court judgment due to a breach of the prohibition of age-based discrimination.
It is therefore recommended that employers can always demonstrate objective and verifiable reasons for dismissal, separate from the employee’s age or retirement age.
Protected employees
A special situation exists for protected employees in the sense of the Act of 19 March 1991. Their protection from dismissal ends on the date that they reach the statutory retirement age of 66 years. Only from that point does the employee lose his special protection from dismissal, and the employer may proceed with dismissal with application of the shortened notice period of up to 26 weeks. A dismissal before that date remains subject to the special dismissal procedure.
What exactly does this mean for employers?
The provision of Article 37/6 of the Employment Contracts Act offers employers a genuine cost saving in the dismissal of long-serving employees with a view to their retirement. However, the rules of play are strict and the timing is crucial: the date of termination must be calculated accurately, the dismissal must not be based exclusively on age, and additional requirements apply for protected employees. Incorrect application may result in liability for additional severance pay or even a court judgment on the grounds of discrimination.
We therefore advise employers to seek legal advice in good time when an employee is approaching retirement age and they are considering ending the employment relationship.
If you need assistance with a specific situation, we will be pleased to assist you further.
