There is no compulsory retirement age for employees in South Africa therefore employees may continue working until they are incapable of performing their job. In these circumstances the employer would need to follow the incapacity procedure as set out in Schedule 8 of the Labour Relations Act (LRA).
Section 187(1)(f) of the LRA declares a dismissal of an employee based on their age automatically unfair. The Labour Court can award up to 24 months of the employee’s remuneration as compensation, should it find the dismissal unfair. In order for the retirement to be fair, the retirement age should either be based on an inherent requirement of the job which makes it fair to discriminate based on age. This is, however, a difficult requirement to prove. Alternatively, Section 187(2)(b) of the LRA makes it fair for an employer to dismiss an employee when they reach the normal or agreed retirement age for persons employed in that capacity.
It is advisable to include a clause stipulating an agreed retirement age in either a written policy or the employment contract. If an employee signs an employment contract that stipulates a retirement age, the employee will be bound by that clause to retire at the agreed age.
The definition of “normal retirement age” was discussed in Rubin Sportswear v SA Clothing & Textile Workers Union & Others (2004) 25 ILJ 1671 (LAC) where the court stated that the normal retirement age is generally established through a recognised practice of employees of an employer retiring at a specific age over a long period of time.
Employers must ensure that the proper procedure is followed when they wish to retire an employee in order to avoid awards being made against them at the CCMA.
ABOUT THE AUTHOR
Riona Bishoon obtained her Bachelor of Laws degree from The University of Kwa-Zulu Natal in 2011 and was admitted as an attorney in 2012. Riona joined SEESA Labour as a legal advisor in October 2016.