In the recent case of Motor Industries Staff Association and Another v Great South Autobody CC T/A Great South Panel Beaters (JA68/2021), the Labour Appeal Court (“LAC”) considered whether an employer can fairly dismiss an employee based on age, at any time after the employee has reached the agreed upon age of retirement.
The Labour Court
The Labour Court considered section 187(2)(b) and stated that in essence, this section reads that the dismissal of an employee based on age is not automatically unfair in circumstances where the employee has reached the agreed or normal retirement age. The Labour Court found that since the employee had already reached the retirement age of 60 (as per his employment contract) at the time of his dismissal, section 187(2)(b) applied and therefore the employee’s dismissal was fair.
Consequently, the Labour Court dismissed the employee’s claim and further held that the argument that the parties tacitly entered into a new employment contract when the employee continued to render his services beyond the age of retirement would have no traction.
The Labour Appeal Court
Being dissatisfied with the findings of the Labour Court, the employee was successful in his application to apply for leave to the LAC. The employee argued that in terms of section 187(1)(f) his dismissal was automatically unfair because the reason for his dismissal was based on an arbitrary ground, in this case, his age. Secondly, the employee alleged that his dismissal was based purely on age and by dismissing him, the employer had unfairly discriminated against him.
The employee persisted with the argument that the employer had waived his right to rely on the retirement age in the employment contract by allowing him to continue working after the age of 60 and, alternatively, that a new (second) contract of employment had come into existence between the parties.
The employer invoked the defence contained in section 187(2)(b) of the LRA and denied, firstly, that the parties had waived the effect of the retirement provisions in the employment contract and secondly, that the parties had tacitly entered into a second employment contract when the employee continued to render his services beyond the agreed retirement age of 60.
The LAC considered the provisions of section 187(2)(b) of the LRA and found that where regard is given to its ordinary meaning, as the dismissed employee had already reached the agreed or normal retirement age, it follows that the dismissal is deemed to be fair.
More importantly, the LAC found that section 187(2)(b) does not prescribe a timeframe within which the dismissal should take place and therefore, this section affords the right to an employer to dismiss an employee on the basis of age at any time after the employee has reached the retirement age. The LAC accordingly dismissed the employee’s appeal.
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