In terms of s187(1)(f) of the LRA, a dismissal is automatically unfair if the reason for the dismissal is that the employer unfairly discriminated against the employee, directly or indirectly, on any arbitrary ground, including, but not limited to, age.
In terms of s186(2)(b) of the LRA, a dismissal based on age is fair if the employee has reached the normal or agreed-upon retirement age for persons in that capacity.
What are the principles regulating the scenario where an employer permits an employee to continue working after reaching the agreed or normal retirement age but subsequently terminates his/her services on the basis that the retirement age has been reached?
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The labour appeal court, in Motor Industry Staff Association and Another v Great South Autobody CC (2022) 33 SALLR 268(LAC); (2022) 43 ILJ 2736 (LAC), adopted the following approach to this scenario:
- s187(2)(b) of the LRA is clear and unambiguous: for a dismissal to be fair, the employee must have progressed past his/her normal retirement age (or agreed-upon retirement age)
- there is no timeframe prescribed within which the dismissal must take place, provided it takes place after the employee had reached the normal retirement age – such fair dismissal can take place at any time after having reached the normal or agreed-upon retirement age
- the aforesaid right accrues to both the employer and employee
- the defence of s187(2)(b) of the LRA is only applicable if the true reason or proximate cause of the dismissal is that the employee has reached such retirement age – the defence is impermissible if the real or proximate reason is something else, e g operational requirements/misconduct/ incapacity
- where an employee continues to work for the employer uninterrupted after reaching the normal or agreed-upon retirement age, the original employment contract is deemed to continue – effectively meaning that the agreed or normal retirement age remains intact (s187(2)(b) does not contemplate a new tacit contract coming into existence between the employer and employee by virtue of their conduct (nor does it envisage a tacit amendment of such contract))
- the right that accrues to an employer in terms of s187(2)(b) of the LRA to dismissal an employee, who continues to work after reaching the normal or agreed-upon retirement age, is sui generis
