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DOES FORCED RETIREMENT AFTER AGREED DATE CONSTITUTE UNFAIRNESS?
In Solidarity obo Viljoen/Fedserv [2020] 9 BALR 979 (CCMA) the CCMA decided that the forced retirement of the employee some years after he had passed the agreed retirement age was firstly not unfair, and secondly that this retirement did not constitute a dismissal at all. This award followed the earlier case law decisions of Schweitzer v Waco Distributors (A division of Voltex (Pty) Ltd) [1998] 10 BLLR 1050 (LC) and IMATU obo Nicholl / The City of Cape Town & another [2010] 8 BALR 877 (CCMA). Was the CCMA wrong? Please support your view with case law decisions.In my view the CCMA was right according to Karan t/a Karan Beef Feedlot v Randall [2012] 11 BLLR 1093 (LAC), where the Labour Appeal Court held that where there is a normal or agreed retirement age and the employee has reached that age, the employer enjoys protection from that date and is entitled to terminate the employee’s contract on the grounds of age at any time thereafter.
INGRID LEWIN
Yes the CCMA was correct on the facts of the case. The Labour Court and LAC cases show that a distinction must be made between 3 possible factual scenarios in a case where the employee continues working after the normal retirement age.
Scenarios
1. The employer and the employee agree to a later retirement date.
2. They agree that the employer can decide when the later retirement date will be.
3. They do not agree on a later retirement date or how it will be decided.The employer would be protected by Section 187(2)(b) in scenarios 1 and 2 but not in scenario 3.
In scenario 3, the termination of employment would qualify as a “dismissal” if the employer simply gave notice of termination for having past the normal retirement age. The employee would be entitled to the same rights of procedural and substantive fairness as any other permanent employees. The termination without following the requirements for a fair dismissal could potentially constitute an automatically unfair dismissal based on age.
I note Ingrid Lewin’s opinion that the CCMA was right in this case based on her reference to the LAC’s decision in the Karan case. There is a compelling argument that the employer who allows an employee to continue working past retirement age should not be stuck with staff members who have endless employment merely because they were allowed to work past retirement age. So Ingrid may well be correct that the employer should be able to make the retirement call at any time after the retirement age has been reached to avoid ‘infinite’ employment.
But I’m still not 100% convinced of this. In Karan, even though there was no agreement on the retirement age – there was an agreement that the employer could give notice of termination at any time at its discretion. In effect this became the agreed condition for continued employment after the retirement age – Scenario 2.
But what if there is no agreement or condition as in Frey du Toit – Scenario 3? The possibility still exists in my opinion that the employee may be entitled to due process before dismissal. But the employer may equally be able to dismiss based on age after retirement age without incurring liability for an automatically unfair dismissal. The rationale for this would be equivalent to “fair discrimination” as found in the EEA. This in turn is on the assumption that “normal retirement age” in 187 (2) (b) is the equivalent of a statutory version of an expiry date in a fixed term contract. And like continued employment after the expiry of an FTC – an employee would be entitled to the rights to fair dismissal.
PATRICK DEALE
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