New case deals with whether your employer can change your retirement age

Most South Africans believe that they will retire upon reaching the age of 65, and plan their finances accordingly.

However, a number of occupations and businesses have set their own retirement ages, leading to cases where some employees are ‘retired’ at 60 or even younger.

This led to a Labour Court judgement delivered in June, which dealt with the question of whether an employer can unilaterally change your retirement age.

“In Daniel Cornelis Theunissen v Legal Aid South Africa, Theunissen was employed by Legal Aid South Africa since 1 May 2008,” explained Helena Roodt, an attorney at SchoemanLaw.

“He was given a written agreement wherein the terms and conditions were recorded. This was supplemented by policies and procedures.”

She added that while Theunissen’s agreement did not make provision for a compulsory retirement date, Legal Aid’s human resources manual stipulated that the retirement age for all employees will be 65 years.

Legal Aid then amended the retirement age in 2009 through a new document 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,” she said.

He subsequently took the matter to the Labour Court.

Labour Court

In its finding the court found that the 2009 human resources policy specifically provided for people to retire at 65 in terms of their individual contracts of employment with Legal Aid.

The Court also determined that by unilaterally changing Theunissen’s contractually agreed upon retirement age from 65 to 60 and terminating his employment on 30 June 2017, it constituted breach of contract.

“The Court ordered that Theunissen be retrospectively reinstated from 1 July 2017 on the same terms and conditions that applied on 30 June 2017,” said Roodt.

The finding means that employers should not unilaterally change the terms and conditions of employment of their employees, and that the retirement age should be clearly stated in employment contracts and human resources policies, she said.

“Employers should also consult with their employees and trade unions representing employees in the workplace before changing terms and conditions of employment,” she said.

Read: Here’s what you need to know about your retirement funds when you leave South Africa

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New case deals with whether your employer can change your retirement age