When must I retire?

I am 59 years old and have been working for nearly 20 years at the same company. The office manager recently told me that I will have to retire when I am 60 as that is the age everyone retires from the company. I had heard that most people retired at 60 but was hoping that I could stay on till 65. Must I retire at 60 or am I allowed to continue working till I am 65?

Retirement relates to the termination of the employment relationship with an employer. In South Africa there is no single applicable retirement age which applies across the board to all employees. This means that establishing the retirement age applicable to an employee will have to be determined in relation to the specific set of facts applicable to the employee’s situation.

Firstly, it will mean establishing whether the employer has contractually agreed with the employee that the employee must retire at a certain age. Usually this will be contained in an employment agreement concluded between the parties or in the terms and conditions of service of the employer. There have been instances where employers have sought to rely on the rules of a pension or provident fund applicable to the workplace and which contains a stipulated retirement age as support for their retirement age. However, this should be approached with caution as such a reliance is subject to unique circumstances including whether the retired employee was a member of such a fund and whether any contractual obligations existed which confined the employee to a specific pension or provident fund or not.

In the absence of an agreement between the employer and the employee on a specific retirement age, it will need to be determined what the ‘normal retirement age’ of the company is, which will depend on the circumstances of the employee’s position and other relevant factors as discussed below.

The Labour Relations Act determines that a dismissal based on age is not automatically unfair if the employee has reached the normal or agreed retirement age. But without an agreement on the retirement age the fairness of the point at which employment stops may be disputed and could constitute grounds for unfair discrimination based on age should the employee be dismissed. This means that an employer bears the onus to prove that the dismissal was fair, which, if not sucessfully done, may lead to a decision of the dismissal being automatically unfair and the employee being awarded compensation of up to 24 months. 

For an employer to prove its ‘normal retirement age’ our courts have agreed that the employer must show that it is an age which corresponds to and is applied to employees in a similar category as that of the person whose dismissal is in question. In addition to this, it has been stated that the retirement age becomes the norm if employees have been retiring at that age suffiently long enough that it can be said to be the norm for employees to retire at that age. 

In your case, it would be important to ascertain whether your employment contract or conditions of service determines that the retirement age of the employer is 60 years. If there is no clear indication of an agreement to such a retirement age, one will have to assess whether the normal retirement age of the employer is 60 years. If this is the case, the employer will have grounds to insist on your retirement, but if not, the employer could be guilty of an automatically unfair dismissal should he insist on your retirement, based solely on your age.

You should also note that irrespective of your employer’s retirement age, your are still free to negotiate with your employer to remain in employment beyond the employer’s retirement age, and this can be suggested as an option to consider should your employer’s retirement age be established as being at 60. Off course, this is then a negotiation and the employer cannot be forced to accept your continued employment beyond its retirement age and may also attach conditions to such acceptance of continued employment.

It would be prudent to consult a labour specialist to assist you with advice regarding your employer’s retirement age, and to make representations on your behalf to your employer for the terms of any continuing employment following your retirement. Employers are also advised to take care to review their company retirement age and ensure that such is included in its employment agreements and conditions of service to ensure certainty for staff of the company’s retirement age, and so avoid disputes arising.

July 16, 2015

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