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The Labour Court recently had to determine whether the termination of an employee on retirement amounted to a so-called automatically unfair dismissal (age discrimination), and if so, whether the ex-employee should be awarded financial compensation.
The case in question was that of Wanless v Fidelity (Pty) Ltd (D119/06).
The applicant had been employed by a cleaning company since 1978. The company was acquired by another cleaning company in 2001.
During 2000, before the acquisition by the new company, however, the applicant had her employment contract with the original employer updated.
The new contract included a clause which was to be of particular importance in the Labour Court case.
The new clause stated that “your employment shall terminate automatically without notice on you reaching the company’s compulsory retirement age of 60 years”.
This retirement clause was therefore part of the applicant’s contract of employment with her new employer from 2001 as the new employer, in terms of section 197 of the Labour Relations Act, assumes all of the employment obligations of the old employer.
The applicant did not wish to retire at the age of 60, however, and testified that she approached her new employers several times, including the managing director directly on three occasions. She said the MD had reassured her that she had nothing to worry about as she was a key employee.
This comforted the applicant, who inferred from her discussions with management that her employment beyond age 60 was assured.
The new employer then advised the applicant that she would be retiring at the age of 60. The applicant testified that she was “shocked and upset”.
The applicant argued that the new employer had agreed to extend her retirement age to 65, or alternatively had given her a choice to retire after the age of 60 but not later than the age of 65. She also contended that the new employer had in fact created a reasonable expectation that her employment would be renewed to the age of 65.
The respondent submitted that the updated 2000 employment contract clearly stated that the applicant would retire at the age of 60 and this contract had not been amended to state that a later retirement age would apply.
Furthermore, the pension fund to which the applicant belonged provided for retirement at the age of 60.
Finally, various witnesses testified that the applicant had at no time been advised that her retirement age would be anything other than 60.
The court took a dim view of the applicant’s case.
No discrimination had been proved, and it was held that the applicant was not dismissed but had merely reached her normal retirement age.
The applicant’s claim was dismissed with costs, with the court emphasising that “the court must discourage ill-conceived discrimination litigation”.
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