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Retirement Age: What are your rights?

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Retirement Age: What are your rights?

by Cape Gateway
29 Mar 2007
Cape Gateway
Cape Gateway

Eventually, everyone needs to stop working. Some people prefer to retire at an early age while others choose to work for as long as possible. Whatever your preference, you need to know what your rights and options are.



Retirement Age

The labour legislation does not deal directly with the issue of retirement age. However, it does say that no one may be unfairly discriminated against because of their age. This means that the employer and employee must agree on a retirement age.

There are three possible situations that you could find yourself in:
  • Your employment contract requires you to retire at a certain age.
  • You have agreed with you employer on a retirement age or there is a company norm.
  • There is no mention of retirement in your contract and there is no agreement.
If you sign an employment contract that stipulates a retirement age, then you can legally be required to retire at that age. The organisation won't be required to give you notice.

If the retirement age is not in the contract but is agreed or if there is an organisational norm, then the employer can give you notice requiring you to retire at that age. The notice period will be the same as the notice period for termination of employment set out in your contract of employment.

When would there be deemed to be an organisational norm? There is a general understanding that the "normal" retirement age is 55, 60 or 65 but this understanding is too vague to be useful in specific instances. Indications of the organisation's norm can be found in:
  • the rules of a company's provident or pension fund (but this is not definitive)
  • company policy.
If there is no mention of a retirement age in your contract and there is no organisational norm, then you can continue to work until you are unable to do your job properly. Your employer can only terminate your contract in accordance with the labour legislation (that is for misconduct, operational requirements or incompetence) and will have to follow the procedures set out in your contract and labour law. The courts have found that it is unfair discrimination for your employer to terminate your employment services just because of your age.

For more information on the law around dismissals, see the Department of Labour's guide to the Labour Relations Act called "Know Your LRA".

What if you continue to work after the retirement age?

There is no legal certainty regarding the rights of an employee who works beyond retirement age. It is thus advisable for the employer and employee to clearly define the terms of employment after the retirement age, for example how long the employee will continue to work for and what notice is required to terminate the employment.

Where can you get an income after retirement?

After you retire you will usually rely on a pension or provident fund for your income.

You can either draw a state pension or you can contribute to a private pension fund or provident fund. For detailed information on how private provident funds and pension funds work visit the Black Sash and ETU paralegal advice website.


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