What is the Law on the Age of Retirement?
A lot of times in life, people tend to be in a state of general agreement over a specific subject or issue, but when you ask them about the specifics, they struggle to give you a straight answer. This phenomenon can be clearly seen when discussing the age of retirement and the rules that surround it. Almost anyone you ask will tell you that a person can (or must) retire at around 60-65, but nobody seems to know a specific age of retirement or a law that stipulates it. This gap in knowledge can result in some pretty unique problems. Maybe you’ve already passed the retirement age but you’re still working. Maybe the retirement age is a lot further off than you originally thought. Regardless of the situation, we would do well to ask ourselves some simple questions and elucidate this topic. For example – What is the retirement age in South Africa? Can it be extended? And can you be forced to retire? What is the Law on the Age of Retirement?
Believe it or not, there’s actually no law in South Africa that specifies when a person must retire. In other words, you could potentially work until the day you die, if that’s what you wanted to do.
|Interestingly, the Labour Relations Act notes that, when an employer unfairly discriminates against an employee and fires them based on their age, such an action may be considered an ‘automatically unfair dismissal’, and could result in legal action ranging from a trip to the CCMA to a referral to the Labour Court. |
That said, Section 187 (2)(b) of the Labour Relations Act does point out that an age-based dismissal may be considered fair if the employee has ‘reached the normal or agreed retirement age for persons employed in that capacity’.
But hold on a second, what does all of this really mean? We’ve all heard of people being ‘forced’ to retire. And nobody gets to just keep on working until they’re 90. So what’s the deal?
Well, as always, you have to read the fine print in your contract.
Are you Forced to Retire at a Certain Age?
Although there’s no law which specifies a retirement age, and although nobody can discriminate against you based on your age, you may be compelled to retire at a certain age if it is stipulated in your contract or by a company norm.
Some contracts contain a retirement clause which can require an employee to retire at a certain age. If you signed one of these contracts, you may be forced to retire when you reach the predetermined date, and you may not have any valid legal recourse.
In some instances, a contract may not give an exact age of retirement but may instead refer to a ‘normal retirement age’ or there may be a ‘company norm’ in place. In most cases, these norms are considered to be at around 60-65 years of age.
At What Age Must You Stop Working in South Africa?
As noted, you can only be forced to retire if you have accepted some sort of agreement or contract with your employer regarding a specific retirement date, or if there is some sort of established norm throughout the company.
You may challenge a retirement request if you have not yet reached the established age or if it runs contrary to the company norm.
Can you be Forced to Retire at 65 in South Africa?
As long as you don’t fall into one of the categories mentioned above, you cannot be forced to retire until you become unable to do your job properly. If you reach the point at which you are unable to carry out your tasks and duties due to general incapacity, your employer may have the grounds to dismiss you fairly.
Of course, even in these scenarios, you can still be dismissed for things like misconduct, regardless of your age.
What is the New Retirement Age in South Africa?
A lot of the time, pension fund regulations may be used to identify the ‘company norm’ when retirement is requested. Recent legislative proposals seek to reduce the definition of ‘older persons’ from 65 (for men) and 60 (for women) to 60 (across the board), which could influence these ‘company norms’ in the future.
For now, however, the average retirement age is still somewhere between 60-65, but these numbers may change depending on the company in question.
Can the Retirement Age be Extended?
In many cases, individuals reach their retirement age but still feel as though they’re able to continue on with their work. In such scenarios, workers should approach their employers and discuss the possibility of staying on past their initial retirement date.
It is in the best interests of all parties involved if the specifics of this new work arrangement are well-defined and agreed upon in writing.
Although, in some cases, they may be implied rather than explicitly stated, it is normally better if both parties are made aware of the new age of retirement, the notice required before employment termination, etc.
Additionally, workers who pass their initial retirement date may ask that they receive a fixed-term contract to continue their work.
What is a Fixed-Term Contract?
As the name would suggest, a fixed-term contract is used to employ somebody for a specific period of time or until a specific event takes place, and operates in contrast to the contract of a permanent employee.
While a fixed-term contract may not provide all of the same benefits as a permanent position would, it can be a useful tool for retirees looking to do a little bit of extra work.
Once again, people who wish to continue working past their retirement date may approach their employers and enquire as to the possibility of a fixed-term contract.
Do you Get Pension Benefits if You Continue Working?
Maybe. It depends on the specific rules of your pension fund. Some funds allow individuals to continue working after receiving their benefits, while others do not. If your fund does not allow for this eventuality, you will receive your payout, and then you will need to make an inquiry regarding temporary employment instead.
In Conclusion – What is the Law on the Age of Retirement and Can You Keep On Working?
Although the common age of retirement in South Africa is between 60-65, there is no law which gives a specific date or age by which individuals are required to retire.
Additionally, the Labour Relations Act identifies age-based discrimination and firings as “automatically unfair dismissals”, which could result in legal action against the offending employer.
However, the Act also notes that such dismissals could be interpreted as fair if the employee had reached the normal or agreed retirement age for that capacity.
What this all means is that you may be compelled to retire at a certain age if your employment contract includes such stipulations in its retirement clause or if a company norm exists in that business. These company norms are usually decided by considering pension fund regulations and are normally around the age of 60-65. Dismissals that run contrary to these norms may be challenged.
If none of these restrictions exists, you may continue to work at your place of employment until you are unable to properly fulfil your duties due to general incapacity. That said, you may still be fired during this time for other fair and legal reasons such as misconduct.
Individuals who reach their original retirement age but wish to continue working may approach their employers and request that a new retirement age be established. Alternatively, they may ask that they be kept on as a temporary employee on a fixed-term contract. In either case, both parties should ensure that the specifics of this new arrangement are clearly identified to prevent any confusion or disagreements down the road.
Disclaimer LAW101: All of our posts are for research purposes only. Law 101 aims to assist its readers with useful information on the laws of our country that can guide you to make decisions in line with the South African Governmental Laws currently in place. Although our posts cite the constitution in many instances, they are intended to assist readers who are looking to expand their knowledge of the law. Should you require specific legal advice we advise you to get in touch with a qualified legal expert.
Found this article interesting? Leave us your thoughts below.