Employment law update – Retirement age

June 1st, 2023

In Bester v SITA (SOC) Ltd [2023] 4 BLLR 303 (LC) an employee alleged that he was forced to retire and, therefore, that the termination of his employment was automatically unfair. The employer, the State Information Technology Agency (SITA), alleged that he had reached the normal retirement age and, therefore, the termination was fair.

The employee had previously worked for SITA as an independent contractor and, therefore, did not belong to any retirement fund. He was also not part of a retirement fund when he became permanently employed in 1999 and took out an annuity with a separate insurer. Thus, he was never a member of a retirement fund. His letter of appointment provided that his appointment was subject to the conditions of service applicable to SITA and that such conditions may be amended from time to time after consultation. It was not clear whether such terms referred to a retirement age in 1999 but in 2011 SITA adopted employment conditions stating that the retirement age would be as per the rules of the relevant pension or retirement funds. It went further to state that those not on an approved pension fund would be treated as members of one of the existing funds, which provided a retirement age of 60. In 2012, the employee signed an updated contract, which provided that the contract would be in force until the employee reached the retirement age as prescribed by the rules of the relevant pension or retirement fund. The employee had deleted this wording and replaced it with ‘the age of 65 years’. However, not all the amendments were counter-signed and the employee who signed on behalf of SITA was not available to give evidence. The employee’s version was that with effect from his amendments to the employment contract in 2012 his retirement age became 65.

A few years later in 2018, the SITA board passed a resolution that all employees would be subject to a retirement age of 60 if they joined the employer after 1999. In February 2019, the employee became aware that he would be asked to retire at age 60 and he raised a grievance, which was not resolved to his satisfaction. SITA then gave him notice that his services would terminate on 31 January 2020. The employee then referred a dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA). This was withdrawn and he then referred a matter to the Labour Court (LC) claiming that he had been dismissed and that this was automatically unfair.

The LC considered s 187(1)(f) of the Labour Relations Act 66 of 1995 (LRA) and found that if that is read in isolation it would mean that all an employee would need to prove to show that the dismissal was automatically unfair is that they had reached the retirement age and that that was the reason for the dismissal. Therefore, s 187(2)(b) of the LRA also has to be considered, which states that ‘a dismissal based on age is fair if the employee has reached the normal or agreed retirement age.’

The LC held that an agreed retirement age means one that has been discussed or negotiated, and is binding, regardless of what that agreed age is. SITA argued that the employee had reached the retirement age of 60, which is applicable for all employees and, therefore, the dismissal was fair. The LC remarked that a retirement age becomes normal when employees have habitually retired at that age for many years or even for a shorter period in the case of a newly formed employer, which may adopt the norm used in the industry generally. There was evidence led that since 2018 all employees of SITA retired at age 60 and there would need to be a motivation for an employee to work beyond the age of 60. The LC held that SITA had successfully raised the defence in s 187(2)(b) of the LRA and, therefore, the dismissal was not automatically unfair. The LC also considered whether there was any ground for the employee to allege that the dismissal was substantively or procedurally unfair and found that there was no such ground given the fact that SITA raised the defence in s 187(2)(b) of the LRA.

The employee’s case was premised on the fact that there had been a breach of his employment contract. The LC, however, found that it did not have jurisdiction to determine this as the employee should have filed a claim under s 77(3) of the Basic Conditions of Employment Act 75 of 1997 if he wanted to allege a breach of contract.

Dismissal for bullying

In Makuleni v Standard Bank of South Africa Ltd and Others [2023] 4 BLLR 283 (LAC) an employee was found guilty of creating a hostile work environment by using vulgar language and mistreating staff. She was consequently dismissed. The Commission for Conciliation, Mediation and Arbitration (CCMA) found that the dismissal was substantively unfair and ordered reinstatement. The arbitration award was, however, set aside by the Labour Court (LC). The matter was then taken on appeal to the Labour Appeal Court (LAC). The LAC found that the LC had erroneously treated the review as an appeal. It remarked that the LC was required to assess whether the outcome was reasonable but had instead taken a different approach and had committed five misdirections. In this regard, the LC accepted that the employer’s witnesses who were the employee’s subordinates, had no motive to lie whereas the employees who had been corrected and criticised by her would have obviously wanted to see the employee leave as on her own admission she was a demanding and authoritarian manager who tended to micro-manage people. She had needed to adopt a strict authoritarian approach because she had been employed to drive performance of that particular branch, which she had done. Another misdirection was finding that the correspondence of the witnesses was a self-supporting corroboration because there was no proof of conspiracy among them. The commissioner was of the view that the corroboration could have been explained by a common dislike of the manager and it was found by the LAC that this was not an unreasonable finding by the commissioner. The LC also found that the commissioner considered the evidence in a piecemeal fashion and did not consider it holistically whereas the LAC did not agree. The LAC also remarked on how the commissioner and LC handled the fact that the witnesses had not complained at the time that the incidents took place. The witnesses argued that they were too scared to come forward and the commissioner was not convinced by this, as there were instances where employees had raised complaints but had decided at the time not to take the issue further as it had been resolved. This was particularly unconvincing because there was a grievance process that employees could have used. It was found that this finding by the commissioner was accordingly not unreasonable. It was further argued in the appeal that the commissioner exhibited a bias by interfering in the presentation of the case. The LAC did not agree and remarked that commissioners are expected to assist an unrepresented litigant and the commissioner did no more than that.

As regards the substantive fairness of the dismissal, the LAC found that there was insufficient concrete evidence to support the charges against the employee, particularly the charges about her not motivating the staff. It was found that there was no evidence about the employee’s managerial ethos and what was expected of her and where she was falling short of the required standards. The employee had also called two senior managers who were not aware of the employee’s alleged bad behaviour and, therefore, the LAC was of the view that the bad behaviour could not have been overtly obvious. Most of the evidence lead was about the how the employee managed her subordinates’ performance. In this regard, employees were upset because she was allegedly rude and shouted at them and feedback was sometimes given in the presence of others. It was stated that the charges were vague with very few details as to the time and context of the incidents. It was remarked that this lack of detail does not mean that nothing has happened, but it does make it more difficult to overcome the denial of an accused. Furthermore, the offensive behaviour in the presence of customers was not corroborated by any complaints in a complaints book and it was found that it was not unreasonable for the commissioner to draw an adverse inference from this.

The LAC also remarked obiter that even if the employer had proved that the employee had behaved inappropriately summary dismissal would not have been an appropriate sanction given the employee’s long service and the fact that she had been appointed to turn around the branch, which she did. If there was a problem with her management style, she should have been sent for advance management training. The employer could have also explored transferring her to another position, which did not involve managing staff.

The appeal was accordingly upheld.

Monique Jefferson BA (Wits) LLB (Rhodes) is a legal practitioner at DLA Piper in Johannesburg.

This article was first published in De Rebus in 2023 (June) DR 28.