Navigating the retirement age maze

IN the dynamic landscape of workforce management, the concept of retirement age holds both rational and practical importance. For employers, understanding the legal framework is crucial for ensuring compliance and adapting to evolving standards.

- NICOLETTE VAN VUUREN, CAITLIN LEAHY

Age enforcement

The enforcement of a retirement age should not only serve as an organisational requirement, but also as a strategic tool to ensure long-term workforce health and productivity. Implementing a retirement age facilitates the transition of older employees out of roles where physical or cognitive demands may increase, promotes the transfer of institutional knowledge and creates space for younger talent. As such, it is integral to economic dynamism and innovation.

Section 187(1)(f) of the Labour Relations Act 66 of 1995 (LRA) states that a dismissal is automatically unfair if it is directly or indirectly based on unfair discrimination on any arbitrary ground, including age. However, section 187(2)(b) provides that a dismissal based on age may be fair if the employee has reached the normal or agreed retirement age.

Implementation

South African labour legislation does not prescribe a universally applicable retirement age.

There are generally two primary mechanisms for implementing a retirement age in South Africa. The first is through an employment contract or company policy that explicitly stipulates a retirement age agreed to by the employee (agreed retirement age).