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have you an agreed on retirement age?
can YOU DISMISS AN EMPLOYEE due to their age, AFTER they have already REACHed THE AGE of Retirement?

 

In terms of the Labour Relations Act 66 of 1995, section 187(2)(b) a dismissal based on age is fair if the employee has reached the normal or agreed upon retirement age for a person employed in that capacity.

 

The question that arises is whether an Employer may rely on section 187(2)(b), and dismiss an employee for reasons of age, after they have reached the age of retirement.

 

The law, as it stood for 26 years, was that an employer may dismiss an employee for reason of age, any time after the employee had reached the age of retirement.

 

The matter has recently been revisited by the Constitutional Court, in the combined Constitutional Case of Motor Industries Staff Association and Another v Great South Autobody CC t/a Great South Panelbeaters; Solidarity obo Strydom and Others v State Information Technology Agency SOC Limited[2024] ZACC 29.

 

The Constitutional Court did not reach a majority decision on the interpretation of section 187(2)(b) of the Labour Relations Act, as follows:- 

 

  • Four of the Constitutional Judges found that the Employer may rely on section 187(2)(b), fair dismissal based on age, only if the termination is done prior to the Employee reaching the agreed or normal retirement age. Any later date would be considered an automatic unfair dismissal.

 

  • A fifth Constitutional Judge, found that termination may be done after the retirement date but must be exercised within a reasonable time.

 

  • The remaining four Constitutional Judges, found that termination may be given at any time after reaching retirement age on reasonable notice.

 

As there is no clear majority decision by the Constitutional Court the 26 year Waco case remains the position but it would be a caution to any Employer when dealing with matters of retirement, to ensure they act sooner rather than later, as the law is no-longer clear cut . 

 

 

 

Disclaimer

This article does not constitute legal advice and is general commentory. Whilst every effort is made to ensure that the article is correct an accurate. We cannot be held liable for any reason, howsoever arising, whether directly or indirectly, for reliance thereon.