We are often asked whether an employer can insist that an employee should retire. This question is normally asked when it is already too late and when a dispute has already arisen.
Employers should be careful in this regard, since a forced retirement could constitute a form of discrimination – and could therefore be an automatically unfair labour practice!!
According to the decision of the Labour Appeals Court of Rubin Sportswear v SA Clothing & Textile Workers Union and others (2004) there are only two sources on which employers can rely to substantiate a specific retirement age, being:
- The normal retirement age – this is an age specified in the employment contract or one of the workplace policies, and this age applies to all employees equally, or
- An agreed age – this is where a specific employee (and employer) agrees on an ad hoc basis that the employee would retire at a different age.
The single most important aspect of a Retirement Policy is obviously that it should indicate at which age employees will retire. There are different views to “what is the best retirement age”, but we mostly see that employers prefer this to be somewhere between the age of 63 and 70 years. The nature of the work also has an influence on ultimately deciding what this should be, for e.g. the retirement age seems to be lower in occupations of a highly strenuous nature.
The situation that often arises is that an employee reaches an age, let’s say 65, being the age at which the employer wants the employee to retire, but that the employee simply says that he/she wants to continue working. This leads to many disputes and even allegations of unfair dismissal.
Employers are encouraged to avoid uncertainty and disputes by implementing a proper Retirement Policy and to include a reference to this in the employment contracts of staff.