IMATU victorious in Labour Court: Compulsory Retirement Age

The KwaZulu Natal Region of IMATU was recently successful in the Labour Court in a matter relating to compulsory retirement age.

In IMATU obo Hlabisa & Others v Umkhanyakude District Municipality (Case No: D908/17) IMATU referred an Automatically Unfair Dismissal dispute to the Labour Court on the basis that the compulsory retirement age of its member employees was unilaterally reduced from 65 to 60 years old.

The Municipality claimed that the employees’ employment contracts were terminated in terms of a practice or policy which set the compulsory retirement age at 60 years. However, no evidence of such a policy was produced. The Municipality further contended that the employees had reached the “normal retirement age”, as contemplated by section 187 2(b) of the LRA, when they turned 60 years old as this is the age at which an employee may retire if he/she wishes to do so. The Court however held a “normal retirement age” is the compulsory retirement age and not the age at which an employee may retire if he/she so wishes. The court ultimately ruled that an employer cannot unilaterally impose a new compulsory retirement age and held that the employees’ dismissals were automatically unfair.

As to relief, the primary remedy sought was retrospective reinstatement with no loss of benefits, alternatively 24 months compensation.

However, reinstatement was no longer possible as the employees had all reached the age of 65 by the time the matter came to Court. It was therefore argued that the employees should be entitled to back-pay until the date upon which they turned 65 years (instead of retrospective reinstatement). The Court however held that an order for back pay can only be made if reinstatement is possible, and since reinstatement was no longer possible, compensation is the only appropriate remedy. Accordingly, the employees were awarded maximum compensation of 24 months.