Retirement- Can your Employer unilaterally change your retirement age?

“When they finally let me retire I want to be a full-time artist”. Nelson Mandela said after agreeing to paint for charity in 2001. Most South Africans believe that they will retire upon reaching the age of 65. They plan and structure their estates according to that.

What does the law in South Africa determine? Can your Employer unilaterally change your retirement age without consulting you? The Labour Court, sitting in Cape Town, gave judgment on retirement age in Daniel Cornelis Theunissen v Legal Aid South Africa on 20 June 2018. The case will be discussed below.

Theunissen has been employed by Legal Aid South Africa (hereafter referred to as ‘Legal Aid’) since 1 May 2008. He was given a Written Agreement wherein the terms and conditions were recorded. This was supplemented by Policies and Procedures. Theunissen’s Written Agreement did not make provision for a compulsory retirement date. Clause 3.7.1 of Legal Aid’s Human Resources Manual of 2007 stipulated that the retirement age for all Employees will be 65 years.

Legal Aid amended the retirement age by way of the ‘Legal Aid South Africa Terms and Conditions of Employment’ in 2009 which replaced the 2007 Manual.

Theunissen received a letter from the Human Resources Manager on 29 August 2016 informing him that he must retire on 30 June 2017 when he turned 60 and that his employment would thus be terminated on the latter date. Theunissen responded to the letter by indicating that his retirement age is 65 and that Legal Aid is breaching the contract by unilaterally changing the retirement age to 60.

Theunissen approached the Labour Court for an order declaring that his retirement age be 65 and that his Employer committed breach of contract when they terminated his contract when he turned 60 in June 2017. He sought to be retrospectively reinstated.

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