Worker vs employer: Who decides the retirement date?


As many individuals are actually pressured to work for longer, the query of when an worker is obliged to retire has turn out to be topical and far mentioned.

The duty to retire is dependent upon numerous components which embody the trade of the actual worker and, extra significantly, the foundations and insurance policies of their employer in relation to prescribing a retirement age.

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A retirement age is usually prescribed in an worker’s contract of employment or could be imposed by advantage of an employer’s retirement coverage. In most situations, workers are conscious of after they could be obliged to retire and thus make provision for this in order that they’ve adequate monetary assets to cowl their bills after they’ve stopped working.

It’s important for employers to have certainty and to create constant insurance policies in order that there will be no ambiguities or confusion as to when workers might want to retire.

Unfair discrimination

Nonetheless, what’s the place the place an employer doesn’t consent to the change of his worker’s retirement age?  And does this represent an mechanically unfair dismissal on account of age discrimination?

This concern was thought-about within the Labour Attraction Courtroom within the matter between BMW South Africa and the Nationwide Union of Metalworkers of South Africa on behalf of Karl Deppe.

With out going into prolonged element in regards to the factual background to the dispute, Deppe’s age of retirement was modified from 65 to 60.  Nonetheless, Deppe had not consented to the change in as a lot as he didn’t obtain the related election type to point whether or not he was ready to retire at age 65 or 60 because the case could also be.

Deppe’s case contending for an mechanically unfair dismissal was introduced by way of Part 187(1)(f) of the Labour Relations Act (“the LRA”).  He argued that BMW unfairly discriminated in opposition to him on the grounds of his age by forcing him to retire at 60 years when he believed that his agreed retirement age was 65.

Within the trial Courtroom, BMW bore the onus to show that the explanation for Deppe’s dismissal didn’t represent unfair discrimination on the premise of age.

BMW relied on the provisions of Part 187(2)(b) of the LRA and advised that they didn’t dismiss Deppe on account of his age however slightly as he had reached the traditional retirement age within the trade.

The Labour Attraction Courtroom, nevertheless, confirmed that, the truth is, Deppe’s dismissal was mechanically unfair.

The consequences of Covid-19 on retirement

As a practitioner, one is usually confronted with purchasers looking for recommendation on whether or not they might pretty terminate an worker’s contract on the premise that such worker had reached retirement age.

That is significantly in vogue now with the appearance of the Covid-19 pandemic which has induced broad scale restructuring amongst many organisations and, in lots of situations, workers who the employer believed had reached retirement might not legally have their contracts of employment terminated on that foundation.

An mechanically unfair dismissal based mostly on a discriminatory floor together with age might effectively outcome within the Labour Courtroom awarding as much as a most of 24 months’ remuneration as compensation to an worker who was dismissed the place the employer contended that the worker had reached an agreed or regular retirement age, which argument was not accepted by the trial courtroom.

Employer’s issues

Employers are subsequently urged to incorporate very clear provisions in worker’s contracts of employment to control the precise retirement age of the worker as they, significantly in these attempting financial occasions, don’t need to face unsure and pointless litigation.

What’s moreover noteworthy from the BMW judgment is that the place employers search to amend or alter the date of a retirement age of an worker, it have to be performed with the suitable diploma of care and the employer should have documentary proof/data of any modification made.

Darryn Mer, director Fluxmans Attorneys.