Tourism Sector Client

Our client is a schedule 3A entity in terms of the Public Finance Management Act.

Our Client’s Challenge

Our client terminated a contract of employment due to an employee reaching his retirement age, being 60. Our client was taken to the CCMA on an unfair dismissal dispute as the employee did not agree with his retirement age and argued that he should retire at 65.

Our Process

At the CCMA arbitration, the merits dealt with the interpretation of 2 retirement age policies in the workplace, which one was applicable and the legal effect at the time of the employee’s retirement. The employee demanded medical aid contributions from the employer between the age of 60 until 65. The CCMA found that the termination was fair and confirmed the dismissal due to the employee reaching his retirement age of 60.

The employee then filed a S145 review in the Labour Court challenging the award by the CCMA, which we opposed.

The Outcome

The Labour Court confirmed the CCMA award and that there were no grounds for review. The Labour Court found that the employee did not prove why he was entitled to claim benefits between the age of 60 and 65 and the review was dismissed.

Employers must ensure to discuss retirement age and termination with senior employees

Conclusion

Employers must inform employees of their retirement age as aligned with the Rules of the applicable pension/provident fund and the workplace policy. When an employee is nearing retirement age, an employer must notify the employee in writing of such date. The employer must make it clear that the employment contract is coming to an end due to retirement age, after which all benefits will also come to an end.