We are often asked whether an employer can insist that an employee retires as he/she has now reached some discretionary “retirement age”. And then we also get asked whether the employer can decide what this age should be?
According to the decision of the Labour Appeal Court of Rubin Sportswear v SA Clothing & Textile Workers Union and others (2004) there are only two bases 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.v
It is evident from the above that if there are neither a “normal retirement age” nor “an agreed age” within
an organisation, an employer will find it difficult to force an employee to retire. And in such situations a
difficult situation may arise when the employee alleges unfair discrimination based on age.
We have lately seen that employers are prone to increase the normal retirement age due to the fact that
due to increased life-expectancy and the trend to retain the wisdom and value of grey hair. And while there is no “golden rule”, we have seen the retirement age increase from the historic 55 years to 63, 65 and even 70 in some organisations.
We implore employers to pro-actively address the issue of retirement age – the best approach is to publicise the “normal retirement age” in either employment contracts or the HR policies, thereby removing any uncertainty or legal arguments that can otherwise be raised.