Employers that fail to establish a retirement age may fall off the labour law tightrope.
BY lvan lsraelstam, Chief Executive of Labour Law Management Consulting. He may be contacted on (011) 888-7944 or 0828522973 or on e-mail address: ivan@labourlawadvice.co.za.
Go to: www.labourlawadvice.co.za
Unfair discrimination can take many forms. For example, where an employee is unnecessarily sidelined because he/she is disabled this could be unfair discrimination. If the employer refuses to appoint a person aged 14 years this is discrimination based on age. However, it is not unfair discrimination because the law says that employers may not hire employees younger than 15 years old. But, other than this, discriminating against an employee or job applicant simply because he/she is ‘too young’ or ‘too old’ will normally constitute unfair discrimination.
It too often happens that an employer tries to get rid of an older employee. This could be for a number of reasons including:
The employer wants to employ a family member or friend and feels that the older employer has ‘had his chance and should make way’
The older employee may have ‘old fashioned’ ideas or finds it difficult to learn new technology
The company has been taken over by young management who only want young people in the business
The older employee has become slower which makes the employer impatient.
The employer dislikes the employee.
While some of the above motives may appear to some to bear some merit, legally, the employer cannot merely get rid of the employee by forcing him/her to retire before the organisation’s normal retirement age.
In order to be entitled to retire an employee section 187(2)(b) of the LRA effectively requires there to be a ‘normal retirement age’. If such ‘normal retirement age’ does not exist the employer will have a problem retiring aged employees.
In the Labour Court case of Helgardt Andries Slabbert vs Muji Motor Group (Lex Info, 16 September 2024, Case number D315/21) a sales manager was forcibly retired at the age of 72 on the basis that the industry’s normal retirement age was 65.
The Court accepted that the employer was entitled to retire employees at any time after reaching normal retirement age (even if it was 7 years after reaching normal retirement age). However, the Court disagreed that the ‘normal retirement age’ was 65 years. This was because it established that 65 was the retirement age for employees who worked in a different capacity to that in which Slabbert had worked.
As the employer had not established any normal retirement age for Slabbert or for employees who worked in the same capacity as he had, the Court found that no applicable ‘normal retirement age’ had been established. And, as the employer had admitted that it had terminated Slabbert’s employment because he was 72 years old, the Court found that he had been automatically unfairly dismissed due to his age.
The Labour Court therefore ordered the employer to pay the employee compensation of R953 496.00 plus his legal costs.
This case highlights the need for employers to understand the nuances of labour law and the way in which the courts interpret the law.
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This video series helps management to walk the shaky labour law tightrope and to run the workplace productively without falling into the labour law abyss.
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The opinions expressed in this article are the author’s own and do not necessarily reflect the view of Lexinfo CC.
Date Posted: 22 Nov 2024