HR 101 - What to do when . . . You want to retire staff

ARTICLE 11

WHAT TO DO WHEN . . . . You Want To Retire Staff?

By Nikki Viljoen – N Viljoen Consulting CC.

The Basic Conditions of Employment Act (BCEA) stipulates that each employment contract should stipulate the age of retirement.

The problem of course arises when employers have not given employees Letters of Employment, or worse – they have issued Letters of Employment, but the letter does not stipulate the retirement age.

This of course is where things usually go pear shaped! You see the generally accepted age is 60 or 65 years and if nothing is stipulated in the Letter of Appointment you cannot suddenly retire someone at, say aged 55.

Once your Letters of Appointment have gone out to staff (with or without the relevant retirement age), you now cannot all of a sudden decide that you want to make the retirement age 57.

This now has to become a negotiation or at the very least, a consultation with your staff in order to reach a consensus .

Should you decide on your own, what age you wish for them to retire, this will be considered a ‘unilateral amendment of employment conditions’ and your employees then would have the right to either refuse the age or comply with forced retirement at the age that you have decided upon.

That said, as an employer you do have the right to enforce a formal retirement age, at a certain stage, even if this has not been done consistently in the past, as long as you go the necessary consultation or negotiation course with your staff.

If, for example the employer has not indicated the retirement age at say 60, then after a negotiation process the retirement age is fixed at 60, the employer now cannot go and ‘retire’ all of those employees who are already 60 and over.  This would be seen as ‘unfair’ dismissal.  What would need to occur is that the retirement age of 60 would need to be phased in over a period of say two years.  This would give the affected employees time to sort their lives out and plan for their retirement.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za