Dismissal after retirement age not unfair

30 August 2022 ,  Sinenhlanhla Khoza 1640
The Labour Relations Act (LRA) states that a dismissal based on age is fair if the employee has reached the normal or agreed retirement age for persons employed in that capacity. Yet what about cases where the employee was allowed to work beyond their normal or agreed retirement age?

This legal question was addressed by the Labour Court in the case of Solidarity obo Strydom & 5 others v State Information Technology Agency SOC Ltd, where the applicants contended, inter alia, that their dismissals had been automatically unfair as they had been unfairly discriminated against on the basis of age.

The applicants in this case had been employed by SITA and the terms and conditions of employment for all the applicant employees were regulated by their respective employment contracts, the SITA Employment Conditions and relevant policies. The SITA Employment Conditions provided that the retirement age shall be regulated by the rules applicable to the employees’ own retirement or pension fund. The employees had been part of the Alexander Forbes Pension Fund which provided that the member’s retirement fund was the last day of the month on which he/she reaches the age of 60 years. 

The Applicants in this matter had continued working beyond the days of the respective months on which they reached 60 years and no new employment contracts were entered into.  SITA subsequently elected to enforce the retirement age of 60 years and furnished the applicants with their retirement notices.

This, they contended, amounted to an automatically unfair dismissal as SITA, by allowing them to work beyond the 60 years SITA had tacitly consented to a new retirement age, alternatively they had a reasonable expectation to work up until they reach 67 years of age. 

SITA, on the other hand, contended that the applicants’ contracts of employment had automatically terminated when they reached the normal retirement age of 60 years and denied that the applicants were automatically unfairly dismissed. 

The Court ruled that whilst it disagreed with SITA’s contention that the contracts of employments had automatically terminated especially due to the fact that the applicants had continued to tender their services in terms of their employment contracts, it was correct in its contention that any amendment to the terms and conditions of the employees’ contract of employment had to be in writing, which was not the case herein.

The Court further held that for an employer to enjoy the protection afforded by the LRA, it needs to prove that there was an agreed or normal retirement age; the dismissal was based on age and the employee has reached the agreed or normal retirement age. In this case, the normal retirement age was common cause and the employees could not rely on the fact that there was no agreed retirement age to support their claim for automatically unfair dismissal.

An employee thus cannot successfully rely on both the normal or agreed retirement age as these scenarios are mutually exclusive. 

The crux of this case is therefore that should an employee continue to work past their agreed or normal retirement age in the absence of a further written agreement regulating the retirement age, the previously agreed or normal retirement age will remain in force and the employer retains the right to dismiss an employee based on age at any point after the employee has attained the normal or agreed retirement age. 

Employers and employees are therefore advised to record any initial or subsequent agreement in writing to not only ensure that the employees who have loyally served the employer until retirement receive a proper send-off but that disputes regarding interpretation of express or implied conduct are limited. 

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