Solidarity obo Strydom and Others v State Information Technology Agency SOC Ltd (LC) (unreported case no C 148/18; JS 49/18; JS 67/18 JS 68/18; JS 338/18; JS 195/18, 9-5-2022) (Nkutha-Nkontwana J).

The employees in this matter were members of a pension fund, which determined that the normal age of retirement was at 60 years old. Three of the employees turned 60 in 2016 while one employee turned 60 in 2015 and the other in 2014.

It was common cause that all the employees continued to tender their services after they turned 60 years old.

In 2017, the employer handed a notice of termination to each employee on grounds that they had already reached their retirement age.

Subsequent to conciliation and by way of a statement of claim, the applicant union referred an automatically unfair dismissal dispute to the Labour Court alleging that its members had been dismissed based on their age.

Section 187(1)(f) of the Labour Relations Act 66 of 1995 states:

‘A dismissal is automatically unfair if the employer, in dismissing the employee, acts contrary to section 5 or, if the reason for the dismissal is –

(f) that the employer unfairly discriminated against an employee, directly or indirectly, on any arbitrary ground, including, but not limited to race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status or family responsibility’.

As a defence, the employer invoked the provisions of s 187(2)(b) which reads:

‘A dismissal based on age is fair if the employee has reached the normal or agreed retirement age for persons employed in that capacity.’

Relying on the employer’s conditions of service – the relevant clause stating that with written consent of the employer, an employee can continue to work after reaching the normal age of retirement up until they reach the age of 67 – the employees firstly argued that the employer consented to them working beyond the age of 60 years old and that the agreed date of retirement was when they turned 67.

Alternatively, once the employer allowed them to continue working post the normal age of retirement and absent an agreement to a new retirement date, the employer could not rely on s 187(2)(b) as a defence, which in turn, strengthened their claim for automatically unfair dismissals.

In support of its first argument, the employees tendered a letter from the employer signed in 2016 and addressed to them individually, wherein the employer confirmed that they would all receive a salary increase effective in April 2016. At the time each employee received this letter they had already turned 60 and continued to tender services. According to the union, this letter served as a written agreement confirming that the employer extended the employees age of retirement to 67 years old.

Having had sight of other relevant clauses in the employment contracts, read together with the letter referred to, the court rejected this argument and held that the letters were nothing more than amending the employees’ salary scales. Prior to addressing the employees’ alternate argument, the court examined the jurisprudence around s 187(2)(b) and reaffirmed the following principles.

Firstly, the conditions which must be met for the section to find application is that the dismissal must be based on age, the employer must have a normal or agreed on age in which the employee will retire, and the employee had reached the normal or agreed on retirement age. Once these conditions had been satisfied, then the law dictates that the dismissals are fair. Put differently, the courts can go no further than to accept that the dismissals are fair, as per a reading of the section.

Secondly, the two instances in which a defence can be raised, that being either when the employee reaches the normal age of retirement or the agreed on age of retirement, are mutually exclusive. Simply put, absent any agreement, an employee’s normal age of retirement is relevant.

Thirdly and quoting from a past judgment the court held:

‘The consequence of allowing the employee to work beyond an agreed or normal retirement age was well articulated by Snyman AJ in Bank v Finkelstein t/a Finkelstein and Associates [(LC) (unreported case no JS219/15, 26-10-2016) (Snyman AJ)]:

“… where an employee works beyond an agreed or normal retirement age. The harsh reality is that such an employee is in effect working on “borrowed time”. The employer, unless it can be proven that the employer specifically waived its rights to apply the retirement age, would remain entitled to at any point after the employee had attained the normal or agreed retirement age place the employee on retirement. In Rubenstein v Price’s Daelite (Pty) Ltd [(2002) 23 ILJ 528 (LC)] the court held, with specific reference to section 187(2)(b), that: “It says a dismissal is fair if the employee has reached retirement age, not when he reaches it.” In Rockliffe v Mincom (Pty) Ltd [(2008) 29 ILJ 399 (LC)], the court approved of the above ratio in Rubenstein and further said:

“Accordingly in an automatically unfair dismissal claim the enquiry ends at the point where, if a defence of having reached an agreed age is raised, such age has been reached. What happened afterwards is immaterial unless a defence of waiver is successfully raised.”’

Applying the above to the merits at hand, the court found that the employees conceded that 60 was the normal age of retirement. They further argued, in the alternative, that there was no agreed on age of retirement. The conclusion thus being that the normal age of retirement was, therefore, applicable. The fact that the employees tendered their services beyond the normal age of retirement did not preclude the employer from placing the employees on retirement in 2017 and on the strength of the fact that they had at the time reached the normal age of retirement.

The action was dismissed with no order as to costs.

Moksha Naidoo BA (Wits) LLB (UKZN) is a legal practitioner holding chambers at the Johannesburg Bar (Sandton), as well as the KwaZulu-Natal Bar (Durban).

This article was first published in De Rebus in 2022 (July) DR 36.