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IN THE CONSTITUTIONAL COURT OF SOUTH AFRICA
In the matter between: Case No.: CCT346/2022
SOLIDARITY obo GERHARDUS STRIJDOM & OTHERS APPLICANT
And
STATE INFORMATION TECHNOLOGY AGENCY
SOC LTD RESPONDENT
_____________________________________________________________________
RESPONDENT’S HEADS OF ARGUMENT
_____________________________________________________________________
1 INTRODUCTION
1.1 This is an application for leave to appeal against the whole of the judgment and order granted by Justice Nkutha-Nkontwana sitting as Court of first instance in the Labour Court, Johannesburg.
1.2 The application for leave to appeal is opposed by the respondent on the grounds contained in its answering affidavit in that application.
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2 PROCEEDINGS IN THE LABOUR COURT
The applicants’ case
2.1 The applicants were employed by the respondent until their employment came to an end on various dates when they were retired because they had reached and passed their agreed age of retirement.
2.2 The applicants instituted proceedings in the Labour Court alleging that they were automatically unfairly dismissed due them having reached the agreed retirement age of 60. In this regard, the applicants relied on section 187(1)(f) of the Labour Relations Act 66 of 1995 (“the LRA”).
2.3 The applicants were all employed in terms of written contracts of employment. The conclusion of the applicants’ written contracts of employment and the terms thereof are not in dispute.
2.4 The applicants were all members of the Alexander Forbes Pension Fund (“the Pension Fund”) the rules of which prescribed 60 years as their retirement age. As a result of this, the applicants’ retirement age was governed by their employment contracts read with the respondent’s conditions of employment and the rules of the Pension Fund. All of these instruments were binding upon the applicants and prescribed the age of 60 years as their retirement age.
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2.5 The applicants did not retire when they reached their agreed age of retirement of 60 years. Instead, they continued to work and the respondent continued to pay their salaries. The position of Alwyn Enslin is, however, different because he entered into a fixed short-term contract after reaching his agreed age of retirement.
2.5.1 Enslin reached his retirement age of 60 in November 2016. The respondent informed Enslin of the fact that he had already reached his retirement age on 16 May 2017. In the relevant letter, the respondent gave Enslin until the 31st of August 2017 to retire.
2.5.2 During August 2017, the respondent offered Enslin a fixed term contract of employment “for a few months” until the end of February 2018. Enslin accepted that fixed term contract of employment and worked until the end of February 2018. The relevant approval is contained in a business request approval memorandum which is on page 14061 in which the following is recorded:
“2. BACKGROUND
A business case requesting approval for Alwyn’s employment contract to be extended beyond his retirement age of 60 was previously submitted on 4 July 2017 however the business case wasn’t supported
1 Volume 14 page 1406.
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by the Acting Executive National Consulting Services … hence this resubmission.
…
9. LEGAL COMPLIANCE IMPLICATIONS
This request is in line with the SITA Employment Conditions as specified in clause 9.19.1.b i and ii as well as the SITA Termination of Employment Policy as specified in clause 6.3.1. Alwyn Enslin is aware that contributions to the Alexander Forbes Retirement Fund by and on behalf of the member shall cease after the normal retirement date and that he forfeits the death, disability and funeral benefits should he pass away or become disabled while in the service of SITA after the normal retirement date.”
2.5.3 Despite the fact that Enslin accepted a new short-term contract of employment, he contended that he was somehow entitled to continue to be employed until the age of 67 and that the respondent consented to him remaining in service and retiring at the age of 67 and that the respondent’s actions of allowing him to continue to work beyond the age of 60 “gave rise to a legitimate expectation that Enslin would be entitled to continue work until he reached the age of 67.” There is no merit in this contention because it is inconsistent with the conclusion of the short-term contract referred to above and what is contained in
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the business request approval memorandum in terms of which the respondent agreed to retain Enslin for a period of six months instead of 18 months as requested.
2.5.4 As on the date on which Enslin accepted a short-term contract, he also accepted that his previous contract of employment had come to an end. For this reason, there is no merit in Enslin’s attempt to claim automatic unfair dismissal.
The respondent’s case
2.6 In the Labour Court, the respondent contended, as it does in this Court, that:
2.6.1 The applicants were employed in terms of written contracts of employment.
2.6.2 The applicants were members of the Pension Fund.
2.6.3 The applicants’ agreed retirement age was 60 years.
2.6.4 The applicants could only retire at the age of 67 years if the respondent had given written consent thereto and the respondent did not give such written consent.
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2.6.5 The respondent did not give written consent for any of the applicants to retire beyond the age of 60 years, let alone the age of 67.
2.6.6 The applicants were not automatically unfairly dismissed as alleged by them.
The judgment of the Labour Court
2.7 The Labour Court correctly dismissed the applicants’ claims and said:
2.7.1 To the extent that the applicants’ retirement age is regulated by the respondent’s conditions of employment and the rules of the Pension Fund, the question to be determined turns on the interpretation thereof2.
2.7.2 The normal retirement age is common cause and that the applicants’
submission that there was no agreed retirement age was flawed.
2.7.3 There was no merit in the applicants’ contention that the respondent’s failure to engage the applicants with a view to reach an agreement on a new retirement age post the age of 60 years amounted to a unilateral determination of a new retirement date in breach of the rules of the Pension Fund, alternatively, that the respondent “tacitly agreed to
2 Paragraph 14.
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allow the applicant employees to remain in employment until the age of 67 years3.”
2.7.4 The normal retirement age of 60 years remained uninterrupted and binding and that nothing much turned on the fact that the applicants continued to work after they had reached the normal retirement age. It being common cause that the applicants had reached the normal retirement age and that their dismissal was based on age, “as stated in Waco, it is section 187(2)(b) that pronounced their dismissal fair” and that the respondent “could accordingly avail itself to the protection prescribed in section 187(2)(b) from the date the applicant employees reached the normal retirement age and at any time thereafter4.”
2.8 The conclusion reached by the Labour Court is consistent with the facts and the documentary evidence placed before it which also forms part of the record in this Court. For this reason, the Labour Court’s order is also correct and there is no factual and legal basis to interfere with it.
3 Paragraph 37.
4 Paragraph 40.
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3 PROCEEDINGS IN THIS COURT
Leave to appeal
3.1 The applicants have not made out a case to be granted leave to appeal and the application ought to be dismissed with costs.
3.2 In Paragraph 37 of their heads of argument, the applicants say that the
“following constitutional issues arise in this case: [i] whether the unilateral imposition of a retirement age has significant constitutional implications for employment related matters; and [ii] every South African enjoys the right to work without fear of being subjected to unfair discrimination.”
3.3 The question formulated by the applicants in paragraph 37 of their heads of argument does not arise in this case. On the applicants’ version, their retirement age was regulated by their contracts of employment read with the conditions of employment and the rules of the Pension Fund. There was therefore, no “imposition of a retirement age” upon the applicants. They agreed to it.
3.4 There is no dispute that every person “enjoys the right to work without fear of being subjected to unfair discrimination.” This Court need not grant leave to appeal in order to deal with an issue which is not in dispute.
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3.5 Considering what the applicants say in paragraph 37 of their heads of argument and the undisputed facts, there is no constitutional issue which requires the attention of this Court and there is no arguable point of law to be resolved by this Court.
3.6 In the premises, it is not in the interests of justice to grant leave to appeal and the application ought to be dismissed with costs.
The Labour Court judgment is correct
3.7 In paragraph 2 of their heads of argument, the applicants say that at the
“heart of this matter lies sections 187(1)(f) and 187(2)(b) of the LRA and the protection it affords against age-related discrimination.”
3.8 The applicants further say that:
3.8.1 The applicants and the respondent “were bound by the Rules of an established Pension Fund, the Rules of which were integrated into their employment contracts5.”
3.8.2 The rules of the Pension Fund “mandated something further”, a
“formula, in essence, culminating in an agreement, to ultimately arrive at a new retirement age (capped at 67), in the event employees were allowed, with SITA’s consent (which was granted, as argued by
5 Paragraph 6 of the applicants’ heads of argument.
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Solidarity), to continue to work past the age of 606.” But there was no consent granted for the applicants to remain employed until the age of 65 or 67.
3.8.3 The respondent “was contractually obligated to engage in a process, resulting in an agreement regarding a new retirement age, once employees had surmounted the predetermined retirement age as articulated in the terms of the conditions of service (the “normal retirement age”, as defined in the said pension fund rules)7.”
3.9 It appears from the contents of the applicants’ heads of argument that the applicants’ case is that they “were bound” by the rules of the Pension Fund
“which were integrated into their employment contracts.” These rules, read together with the applicants’ contracts of employment and the respondent’s conditions of employment prescribed that the applicants’ age of retirement was 60 years. This being the case, the applicants do not have reasonable prospects of success in challenging the judgment of the Labour Court because the application for leave to appeal or the appeal will necessarily have to fail once it is found that the applicants agreed to retire at the age of 60 years and that they had reached that age when they were retired.
3.10 Once it is found that the applicants agreed to retire at the 60 years, the respondent is protected by section 187(2)(b) of the LRA which rendered
6 Paragraph 7 of the applicants’ heads of argument.
7 Paragraph 8 of the applicants’ heads of argument.
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the dismissal fair and no purpose would be served by entertaining an appeal on the matter.
3.11 The suggestion that the respondent “was contractually obligated to engage in a process, resulting in an agreement regarding a new retirement age, once employees had surmounted the predetermined retirement age as articulated in the terms of the conditions of service (the “normal retirement age”, as defined in the said pension fund rules)8” is not supported by any evidence. The applicants’ written contracts of employment do not impose such an obligation upon the respondent. The rules of the Pension Fund also do not impose such an obligation upon the respondent. It is indeed so that the applicants say the following in paragraph 68 of their heads of argument which proves that the alleged duty is not founded in their written contracts of employment:
“68. The subsequent pages shall be dedicated to a more comprehensive explication of the argument, which centres on the assertion that upon granting the members permission to persist in their services beyond the normal retirement age, SITA incurred an inherent obligation, in accordance with the Rules stipulated within the Alexander Forbes Pension Fund … to engage in consultation and reach accord concerning a retirement age that transcends the threshold of 60 years. This particular consensus, according to the tenets of the argument,
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ought to have been established within the span ranging from 60 to 67 years.”
3.12 If it is found that there was such a duty, its breach is not actionable in terms of section 187(1)(f) of the LRA, the section in terms of which the applicants came to Court.
3.13 The applicants’ contracts of employment contain the following provisions9:
3.13.1 Clause 2.1.18 which defines the termination date of the contract of employment as follows:
“2.1.18 “Termination Date” means the retirement age specifications set according to the rules of the relevant pension or retirement funds or any other earlier date as envisaged in terms of this Agreement.”
3.13.2 Clause 4 which reads as follows:
“4.1 This Agreement shall commence on the Commencement Date
… and shall be valid and operational until the Employee reaches retirement age set according to the rules of the relevant pension or retirement funds or until termination by
8 Paragraph 8 of the applicants’ heads of argument.
9 One of such contracts is on page 625 of Volume 7.
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either party as provided for in clause 17 or for any reason recognized by law.” (Own emphasis).
3.13.3 Clause 4.1 also makes it clear that the retirement age is that “set according to the rules of the relevant pension or retirement funds.”
The effect of this is that the applicants agreed to a retirement age prescribed in the rules of the pension funds to which they belonged. In this case, they all belonged to the Pension Fund which prescribed 60 years as their retirement age.
3.13.4 Clause 24 which provides that the agreement constitutes the whole agreement between the parties and that amendments to it must be in writing and signed by both parties.
3.13.5 The applicants’ contracts of employment were not amended. The effect of clause 24 of the applicants’ contracts of employment is that:
3.13.5.1 the applicants are in law precluded from relying on conduct or consent which is not recorded in a written document signed by their duly authorized representatives as a basis to suggest that they continued to be employed beyond their retirement age of 60 or that the respondent attracted some other obligation not written in the written agreement;
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3.13.5.2 the mere fact that the respondent did not tell the applicants to retire when they reached the age of 60 does not on its own give rise to a new retirement age or an obligation to engage and reach agreement on a new retirement age;
3.13.5.3 the applicants could only have lawfully had their retirement age changed from 60 to 67 years if there was a written amendment to their contracts of employment and indeed the rules of the Pension Fund.
3.14 The fact that the respondent’s employees were required to have an approved business case in order to remain employed beyond their retirement age, just like it was done in respect of Enslin, is also apparent from Van den Berg’s grievance response in which the following is stated:
“3. Resolution
(a). You have reached your retirement age 2 years ago. As per SITA Condition of Employment, you were supposed to be on pension then. There is also no approved business case for the extension of your service. SITA EXCO has made a decision that all employees that have reached their retirement age should be terminated by 31 December 2017.” (Own emphasis).
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3.15 Olivier’s grievance response also confirms that there was no automatic right to continue to be employed beyond one’s agreed retirement age. The following is stated therein:
“I further confirm that in general during the hearing, there was agreement on the following points, both in reference to the grievance policy and the applicable policies in relation to your employment conditions and in particular, your rights and the SITA’s obligations to stay in the employment of SITA beyond your retirement age:
• In terms of the applicable policies, no employee has any automatic right to stay in the employment of the SITA beyond their retirement age;
• The SITA retains the sole right to determine whether an employee may be invited to stay in its employment beyond the employee’s retirement age;
…
I find no compelling reasons to accept your request and I believe that it is in the best interest of the SITA that it enforces retirement across the board in a transparent and equitable manner and in particular, that it continues to focus on effective and proactive development and management.”
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3.16 In respect of Olivier, there is also a draft memorandum for business approval request which was not approved. A copy of this document is on page 53910. The intended purpose of this draft was to “seek approval for the retention of Andreas Olivier … until 30 September 2018” because he had “reached the Alexander Forbes pension fund retirement age of 60 …”
This request was not approved.
3.17 In relevant parts, the respondent’s conditions of employment which also governed the applicants’ employment provide that:
3.17.1 The employment conditions determine the working conditions within which employees will perform their functions11.
3.17.2 The employment conditions are deemed to have been accepted by the respondent’s employees, including the applicants and they form an integral part of the applicants’ contracts of employment12.
3.17.3 Any specific additional or amended terms and conditions applicable to an employee “shall be confirmed in writing13.”
3.17.4 The employment conditions “may only be amended in writing14.”
10 Volume 6 page 539. See also e-mails from page 543 to 546.
11 Clause 1.
12 Clause 1.
13 Clause 2.
14 Clause 6.
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3.18 The retirement of the respondent’s employees is dealt with in clauses 9.18 and 9.19 of the employment conditions.
3.19 Clauses 9.18 and 9.19 of the employment conditions provide as follows:
“9.18 Retirement age
Retirement age specifications shall be set according to the rules of the relevant pension or retirement funds.
9.19 Retirement funds
The SITA is a participating employer in the following funds.
9.19.1 Defined contribution funds
….
b) Alexander Forbes Retirement Fund
i) The normal retirement age of the fund is the last day of the month in which a member reaches the age of 60. A member who transfers from another company-approved pension fund or approved provident fund shall retain his previous retirement age of 65 in terms of the rules of such
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approved pension fund or approved provident fund.
ii) Subject to the consent of the SITA, a member who has reached his normal retirement date and normal retirement age of 60 or 65, whichever is applicable, may remain in service and retire at a date not later than the last day of the month in which the member attains the age of 67.
Contributions by and on behalf of the member shall cease after the normal retirement date and the employee forfeits the death, disability and funeral benefits should the employee pass away or become disabled while in the service of SITA
…”
3.20 Since the applicants were members of the Pension Fund15, their normal and agreed retirement age was “the last day of the month in which a member reaches the age of 60.”
3.21 In the Labour Court, the applicants relied on the fact that the respondent allowed them to continue to work beyond their retirement age of 60 as a basis to contend that the respondent consented to them working until the age of 65 or 67. In this Court, however, the applicants contend that the
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respondent attracted a duty to engage with them to reach an agreement on a new retirement age. The respondent did not attract such a duty.
3.22 The conduct of the applicants and the respondent is inconsistent with there being some other agreement than the written instruments which governed their employment relationship. There is also no agreement in terms of which the respondent consented to the applicants working until the age of 65 or 67. This is for the following reasons:
3.22.1 The respondent entered into negotiations with the PSA, one of the trade unions which represented some of the applicants at the relevant time, to find ways of addressing the inconsistencies arising from different retirement age within the respondent’s workplace during the very same time that the applicants claim to have had their retirement age changed from 60 years to 67 years.
3.22.2 The respondent gave the applicants notice to retire long before they reached the age of 67 which it would not have done if it had indeed agreed or consented to the applicants working until the age of 67 or if it had a duty to reach an agreement on a new retirement age.
3.22.3 The conclusion of a short-term contract with Enslin and the contents of the business case memorandum to motivate for the conclusion of such contract. The business case motivating for the continued
15 Alexander Forbes Pension Fund.
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employment of Enslin was not approved by the respondent in its entirety, which clearly indicates that there was no consent by it or agreement between the respondent and Enslin (and indeed the other applicants) that they would continue to work until the age of 65 or 67 as contended for by them.
3.22.4 The PSA’s newsletter dated 30 June 2017 which is on page 72616 makes it clear that the issue of the respondent’s employees retirement age had been the subject of discussions between the respondent and the union. In this regard, the following is recorded in the newsletter:
“Compulsory retirement age
The employer again explained the reason for the discrepancy that exists, resulting in some employees having to retire at 60 years of age and others at 65, and acknowledged that a uniform retirement age is supported by the organization. However, the matter requires further consideration due to certain challenges and for the moment the status quo remains.” (Own emphasis).
3.22.5 The PSA’s newsletter does not state that the respondent has by its conduct consented to certain employees continuing to be employed beyond the retirement age of 60 or that it has attracted a duty to
16 Volume 8 page 726 at 727.
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engage with the applicants in order to agree on a new retirement age of 65 or 67 years.
3.23 The respondent’s termination of employment policy also regulated the relationship between the applicants and the respondent. In relevant parts, it provides that:
“6.3 Termination of services
6.3.1 Termination on reaching retirement age
The retirement fund provides retirement benefits for employees who complete their careers in SITA’s service. The retirement age for employees is as defined in the SITA conditions of employment and/or the respective Pension or Retirement Fund rules.
An employee may apply to continue working beyond normal retirement age. Any decision to allow an employee to continue working beyond normal retirement age shall be taken by the head of department in consultation with the Human Resource department. Any decision in this regard should be based on operational requirements, fitness of the employee, should be confirmed in writing) and applicable fund rules.” (Own emphasis).
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3.24 None of the applicants demonstrated that their relevant head of department,
“in consultation with the Human Resource department” took a decision to allow them “to continue working beyond normal retirement age.” In addition, none of the applicants demonstrated that such a decision, if it was ever taken was “confirmed in writing” as contemplated in clause 6.3 of the termination of employment policy and none of them applied “to continue working beyond normal retirement age” before they reached the age of 60.
3.25 Clause 6.7 of the termination policy provides that no “deviations shall be allowed.” Accordingly, the applicants cannot be heard to seek to contend that the termination of their employment was regulated differently since deviation from the respondent’s termination of employment policy was not allowed.
3.26 In relevant parts, rules of the Pension Fund provide that:
3.26.1 Normal retirement date is defined to mean the date specified in the special rules.
3.26.2 The special rules define the normal retirement date as the last day of the month in which a member reaches the age of 60 provided that a member who transfers from another approved pension fund or
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approved provident fund shall retain his previous retirement age of 6517.
3.26.3 Rule 5 of the rules of the Pension Fund deals with retirement18.
3.26.3.1 Rule 5.2 provides as follows:
“5.2 Retirement from service
5.2.1 A member who has reached age 55 years may retire from Service on the last day of any month occurring before he reaches his Normal Retirement Date …
5.2.2 A member who has not retired in terms of Rule 5.2.1 must retire from Service on reaching his Normal Retirement Date unless his Employer agrees in writing to his remaining in Service after that date.
…
5.2.4 A member who is allowed to remain in Service after his Normal Retirement Date shall retire
17 Supplementary Volume 1 on page 1413.
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from Service on such later date as he agrees with his Employer.” (Own emphasis).
3.27 Rule 5.2.2 of the rules of the Pension Fund expressly states that the employer’s agreement for an employee not to retire on the normal retirement date must be in writing and that a member who has not retired in terms of Rule 5.2.1, which makes provision for a member to retire from the age of 55, “must retire” on reaching his normal retirement date “unless his Employer agrees in writing to his remaining in Service after that date.” It is clear from rule 5.2.2 that a written agreement is required for an employee to remain in service after the normal retirement date which date is the date on which an employee reaches the age of 60 years.
3.28 The applicants have not produced a written agreement in terms of which
“his Employer agrees in writing to his remaining in Service after” the normal retirement date. In the premises, without there being a written agreement for any of the applicants to remain “in Service” after the normal retirement age of 60, then in that event, there is no basis to suggest, let alone to contend, that the respondent consented to the applicants remaining employed and retiring at the age of 67.
3.29 Rule 5.2.4 further makes it clear that a member who is allowed to remain in service after reaching the age of 60 years “shall retire from Service on such later date as he agrees with his Employer.” There is no agreement which
18 Supplementary Volume 1 on page 1455 to 1456.
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has been proved by the applicants that the respondent has agreed that they would retire at the age of 65 or 67. Such an agreement would in any event have had to be in writing and the applicants have not produced any written agreement signed by both parties in terms of which they were allowed to continue to work until the age of 65 or 67 as contended for by them.
3.30 The respondent did not consent to any of the applicants’ remaining employed until the age of 65 or 67 as contended for by them. The respondent also did not create any legitimate expectation that the applicants would continue to work until the age of 67. Even if it may be found that the respondent consented to the applicants remaining employed beyond the age of 60, such consent would be in conflict with the written instruments regulating the applicants’ retirement age, to which they agreed.
3.31 In the premises, the applicants were not automatically or unfairly dismissed as contended for by them.
3.31.1 Section 187 of the LRA provides that a dismissal is automatically unfair if the reason for the dismissal is, amongst others, that the employer unfairly discriminated against an employee, directly or indirectly on any arbitrary ground such as age.
3.31.2 In Kroukam it was held that section 187 of the LRA requires an employee to produce evidence which is sufficient to raise a credible possibility that an automatically unfair dismissal has taken place. If an
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employee passes this hurdle, the employer must then prove the contrary by producing evidence to show that the reason for the dismissal did not fall within the circumstances prescribed in section 187 for constituting an automatically unfair dismissal, in this case, age19.
3.31.3 The applicants have failed to establish that they were in fact and in law automatically unfairly dismissed, let alone produce sufficient evidence “to raise a credible possibility that an automatically unfair dismissal has taken place” as contemplated in Kroukam.
3.31.4 The objective facts are the following:
3.31.4.1 the applicants were members of the Pension Fund;
3.31.4.2 the age of retirement prescribed by the rules of the Pension Fund has always been 60;
3.31.4.3 the applicants had already reached the age of 60 on the dates on which the respondent told them to retire;
3.31.4.4 the applicants’ own contracts of employment expressly provide that their employment contracts would automatically terminate
19 Kroukam v SA Airlink (Pty) Ltd [2005] 12 BLLR 1172 (LAC).
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when they reach the retirement age prescribed in the rules of their relevant pension funds, in this case, the Pension Fund;
3.31.4.5 there are instances where the respondent has expressly agreed with some of its employees to continue to work beyond their prescribed retirement age but this was not the case with the applicants.
3.32 Whilst section 187(1)(f) of the LRA says that a dismissal is automatically unfair if the reason for it is based on age, section 187(2) provides that:
“(b) A dismissal based on age is fair if the employee has reached the normal or agreed retirement age for persons employed in that capacity.”
3.33 No discussions took place between the applicants and the respondent and no agreement was concluded between the applicants and the respondent either before they reached their age of retirement or thereafter. The evidence shows that the applicants simply continued to render the services for which they were employed. As a result of this, it cannot be said that a new retirement age was agreed upon between the applicants and the respondent.
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3.34 In Schweitzer the Labour Court said that where a termination of employment is based on age, it is necessary to have regard to the following three questions to determine whether section 187(2) of the LRA applies20:
3.34.1 Whether the dismissal was based on age?
3.34.2 Whether there was an agreed or normal retirement age in place?
3.34.3 Whether the employee had reached the agreed or normal retirement age?
3.35 In Schweitzer the Court further said that section 187(2) of the LRA applies when the answer to all the above three questions is in the affirmative and in that event the termination does not amount to unfair age discrimination. In that event, an employee may be retired at any stage after reaching the established retirement age without the employer being obliged to follow any pre-retirement procedures. This is what happened in this case.
3.36 In this case:
3.36.1 The agreed retirement age was 60 years in terms of the applicants’
contracts of employment ready with the respondent’s conditions of employment and the rules of the Pension Fund.
20 Schweitzer v Waco Distributors [1999] 2 BLLR 188 (LC).
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3.36.2 The applicants had already passed the agreed retirement age of 60 when they claimed automatically unfair dismissal.
3.37 In Rubenstein, the Labour Court correctly held that an employer’s permission for an employee to work beyond the normal or agreed retirement age did not constitute a waiver of the right to compel an employee to retire at a later date21. It also certainly does not create a duty to negotiate a new retirement age, failing which there is an automatically unfair dismissal on the ground of age.
3.38 In Karan Beef the Court was dealing with a slightly different situation and does not assist the applicants22.
3.38.1 There the employer had sent the employee a letter confirming that he would soon reach the agreed retirement age of 60 and that the employer wanted him to continue working and that his contractual notice period would then apply in the event that the employer wanted him to retire.
3.38.2 The employee did not respond to that letter. Two years later, the employer informed the employee that he would be retired and terminated his services on one month’s notice. Aggrieved by this, the
21 Rubenstein v Price’s Daelite (Pty) Ltd [2002] 5 BLLR (LC).
22 Karan Beef Feedlot & Another v Randall [2012] 11 BLLR 1093 (LAC).
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employee contended that this amounted to automatically unfair dismissal.
3.38.3 The Labour Appeal Court concluded that the employee had tacitly agreed to work beyond the agreed retirement age and left it to the employer to determine his retirement age on notice and that there was nothing unlawful or unfair about this agreement. In addition, and insofar as it is relevant to this case, the Labour Appeal Court further said that:
“[19] There are two plausible arguments concerning the application of section 187(1)(f) and 187(2)(b) in this matter. The first is that where there is a normal or agreed retirement age and the employee has reached that age, the employer shall enjoy protection prescribed in section 187(2)(b) from that date and at any time thereafter. He or she would be entitled to terminate the employment of the employee on the grounds of age.
[20] The second scenario is that, when there is an agreement reached between the employer and employee before the latter has reached the normal or agreed retirement age, to determine a new retirement age, the employer would enjoy the protection of section 187(2)(b), should he/she
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terminate the employment of the employee, once the new agreed employment date is reached.” (Own emphasis).
3.39 The respondent and the applicants did not, “before the latter has reached the normal or agreed retirement age” enter into an agreement “to determine a new retirement age.” Consequently, the respondent enjoys the protection prescribed in section 187(2)(b) of the LRA “from that date and at any time thereafter” and it was accordingly “entitled to terminate” the applicants’ employment on the ground that they had reached their agreed or normal retirement age.
3.40 In Kutuma23, the respondent’s employer had terminated the applicants’
services due to the fact that they had reached the normal retirement age according to a Policy Document on Conditions of Service which made provision for normal retirement at the age of 60 and compulsory retirement at the age of 65. The applicants were between the ages of 61 and 63 years when they claimed automatically unfair dismissal. The applicants claimed that they were unfairly dismissed on account of their age in contravention of section 187(1)(f) of the LRA. After considering various submissions made by the parties, the Labour Court concluded as follows:
“[37] I appreciate that the applicants might have hoped they would continue to work until the compulsory retirement age, but
23 Kutuma & Others v Limpopo Legislature Case No.: JS886/09.
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under their conditions of service they were always vulnerable to being retired after reaching the age of 60 …
[38] Consequently, I am satisfied that in this instance the respondent can rely on the defence provided by s 187(2)(b) of the LRA and that the applicants’ dismissal was fair because they had reached the normal age for retirement after which the employer was entitled to dismiss them for that reason under clause 4.8.1 of the policy.” (Own emphasis).
3.41 In Marais24 the Labour Court was again dealing with an applicant who claimed automatically unfair dismissal. Relying on Karan Beef, the Court said:
“[15] Clearly, once the day of reckoning arrives – reaching the normal or agreed retirement age – the clock cannot be reversed. The only way to reverse it is to novate. In the nature of novation, the obligation must still be extant at the time of replacement. In my view, once the horse bolts – the retirement age is reached – the retirement age is not capable of being novated. I understand this to be the point made by the LAC in Karan Beef’s supra.
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Was there novation in this matter?
[16] An argument was presented before me that the fact that the applicant worked beyond the normal retirement age, suggests that the applicant cannot be dismissed on the ground of age. In support of the argument, reliance was placed on Datt supra. I must state upfront that Datt is distinguishable. In casu, there were no discussions before or even after the passing of the retirement date. In Datt, two months after the retirement age, a letter was sent to Datt asking him to stay on until a date to be mutually agreed upon.
[17] Novation is a matter of intention and consensus. When the parties novate, they intend to replace a valid contract by another valid contract. Therefore, once an employee reaches a normal or agreed retirement age, there is no longer a valid and enforceable employment agreement. Perhaps what may come into being is another employment contract, where an employee continues after an employment agreed becomes invalid.
However, like any other agreement all the formalities must be present in order to be a valid one. One of the formalities is that there must be a meeting of minds. There must be an offer followed by acceptance. Assuming that when the applicant continued after 2011, he offered his services again. Fact is the
24 Marais v Aveng Grinaker LTA Case No.: JS602/14.
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respondent did not accept that offer. Silence cannot be acceptance. Quiescence is not necessarily acquiescence and one party cannot, without the assent of the other, impose upon such other a condition to that effect. Clearly, in this matter after 2011, there was no meeting of minds – having slipped through the cracks, as testified, it cannot be said that the respondent was consciously aware that the applicant continued and/or made an offer of his services again. Negligence does not equate intention or consensus. Accordingly, there can never be an agreement to be re-employed in this matter.
[18] On another level, I part ways with Datt, to the extent that it suggests that the employment agreement was novated by the letter of June 2014. At that time, there was no longer a valid employment agreement, it having lapsed in April 2014 when Datt reached the agreed retirement age of 65 years. I take the view that once the age is reached, the contractual obligation is discharged. However, that does not, to my mind, suggest that an employer may not re-hire, as it were, an employee who had reached a normal or agreed retirement age. Therefore, for me what happened in Datt is more a re-hire than novation. In such a situation, which situation does not obtain in the matter before me, when an employer terminates the employment of a re-hired employee on the basis of age and it is established that the age at which he or she is terminated is not a normal retirement one
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or an agreed one, the dismissal that ensues would be automatically unfair. On the evidence before me, the applicant, without any other agreement continued to work. The respondent refers to that as a slip through the cracks.
[19] I therefore conclude that I am respectfully unable to follow Datt for reasons set out above. A comment in passing is that, in my view, Mr. Datt had reached the agreed retirement age and as such, the defence should have been available to Gunnebi Industries. Therefore, even if the facts were not distinguishable, I would not have, respectfully, followed Datt. The defence becomes available once the age reached is a normal retirement one or an agreed one. In Datt there was no agreed age as it was still to be mutually agreed upon. However, that does not detract from the fact that age 65 was a normal retirement age for persons in the capacity of Mr. Datt. It does appear that my late brother was more concerned with the existence of an agreement as opposed to what was normal.
[20] Besides, the LAC in Karan Beef, rejected a conclusion that an employer is not entitled to unilaterally determine a retirement date. The Court remarked that there was nothing unlawful or unfair in leaving it to an employer to determine the retirement age or date.
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Conclusions and remarks
[21] For reasons that are clearly apparent in this judgment, I must conclude that the dismissal of the applicant is fair. In other words, the respondent successfully raised the defence set out in section 187(2)(b) of the LRA. I further conclude that there was no novation when the applicant continued to work silently beyond the normal retirement age. On the assumption, which assumption I am not making in this matter, that the employment agreement continued beyond the normal retirement age of 60 the applicant may have successfully alleged and proved that the true reason for his dismissal was operational requirements disguised as age. However, such a case is not before me.”
(Own emphasis).
3.42 In Motor Industry Staff Association25, the Labour Appeal Court put the matter to bed.
3.42.1 The second appellant agreed to retire at the age of 60 but “the respondent did not retire him when he turned 60” on 15 March 2018 and he continued to render his services and was paid his usual salary.
25 Motor Industry Staff Association And Another v Great South Autobody CC (2022) 43 ILJ 2326 (LAC); [2022] ZALAC 103 (22 September 2022).
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3.42.2 On 14 January 2019, the respondent informed the second appellant that “his services would terminate with effect from 12 February 2019 as he had reached the agreed retirement age of 60.”
3.42.3 The appellant contended that “when an employee reaches the agreed retirement age and he continues to work for the employer, the employer cannot thereafter rely on the (previous) agreed retirement age, as the employment contract terminates by agreement” and that any dismissal based on age will constitute automatically unfair dismissal. The respondent contended differently.
3.42.4 The Labour Appeal Court correctly held that:
3.42.4.1 In terms of section 187(2)(b) of the LRA, “once the employer proves that the dismissed employee has reached the agreed or normal retirement age, the dismissal is deemed fair26.”
3.42.4.2 Section 187(2)(b) does not prescribe a time frame within which the dismissal should take place, provided that it is after the employee has reached his or her agreed or normal retirement date27. The section “affords an employer the right to fairly dismiss an employee based on age, at any time after the employee has reached his or her agreed or normal retirement
26 Paragraph 14.
27 Paragraph 15.
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age” and that the “focus is not so much on when the employee reached his or her retirement age, but rather that the employee has already reached or passed the normal or agreed retirement age28.”
3.42.4.3 Section 187(2)(b) is to the effect that if an employee continues to work for the employer uninterrupted after reaching the agreed or normal retirement age, “the employment relationship and employment contract continue” and that this “effectively means that the agreed or normal retirement age of the employee remains unchanged29.”
3.43 In this case, the applicants continued to work for the respondent without interruption after they had reached the agreed age of retirement of 60 years.
This did not take away the respondent’s entitlement to retire them at any time thereafter.
3.44 It is not the applicants’ case that Motor Industry Staff Association was wrongly decided or that it must be overruled. The Labour Appeal Court’s interpretation of section 187 of the LRA is correct and must be endorsed by this Court.
28 Paragraph 15.
29 Paragraph 17.
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3.45 On the facts, the applicants had long passed the agreed retirement age of 60 when the respondent retired them. Consequently, the respondent is protected by section 187(2)(b) of the LRA and there is no automatic unfair dismissal.
3.46 If leave to appeal is granted, the appeal ought to be dismissed with costs of two counsel.
Dated at Sandton on this 7th day of September 2023.
Kennedy Tsatsawane SC Nandi Makhaye
