A recent case heard by the labour court demonstrated that employees who choose to work beyond the normal or an agreed retirement age could be dismissed at the employer's discretion.
Retirement Age
An employee signed an employment contract in January 2008 which expressly stated that the employee’s retirement age is 60. Despite reaching this retirement age in 2018, the employee continued to work.
After a few months the employee was informed in writing that their contract would be terminated. The employee felt this was unfair and referred the dispute to the Labour Court arguing that their dismissal was constituted unfair in terms of the section 187(2)(b) of the Labour Relations Act.
Fiona Leppan, Director of Employment Law practice at Cliffe Dekker Hofmeyr explains that Section 187(2)(b) of the Labour Relations Act states that the dismissal of an employee based on age is not automatically unfair in circumstances where the employee has reached the agreed or normal retirement age.
Leppan says the Labour Court outlined that employers can allow employees to work beyond retirement age. However, this will not waive the employer's right to terminate an employee's contract based on the employee passing retirement age.
The employer can decide even if you work beyond the agreed age, you can still be retired at the behest of the employer
Leppan says an employer must satisfy three conditions before they can choose to terminate an employee's contract where retirement age is concerned.
- The dismissal of the employee must be based on their age.
- The employer must have an agreed or normal retirement age for the employee.(this can be stipulated in the employment contract.
- The employee must have reached the agreed or normal retirement age.
Once these conditions are met, the dismal of an employee is not considered unfair or discriminatory based on age.
