According to Section 187 (f) of the Labour Relations Act (LRA), an employer cannot unfairly discriminate against an employee based on their age.
When a retirement age has been agreed upon between the employer and employee in a contract of employment or through a pension/provident fund, it is a condition of employment between the parties. The employer cannot unilaterally change this condition. There has to be a signed written agreement between the parties for a change in employment conditions. The employee has to accept the agreement voluntarily. If an employer unilaterally changes the employee’s retirement age and subsequently terminates the employee, this will constitute an automatic unfair dismissal and unfair discrimination.
In the recent case law of BMW (South Africa) (Pty) Ltd vs NUM, an employee of BMW agreed to retire at 65. A unilateral memorandum was brought out, changing the retirement age to 60. The employee was forced to retire at 60. The Labour Appeal Court supported the Labour Court’s decision and found that the termination constituted an automatic unfair dismissal.
The sum of the case is that an employee’s retirement age cannot be changed unilaterally.
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