When employers inappropriately impose the normal retirement age of 65. Slabbert v Muji Motor Group (Pty) Ltd (2024) 45 ILJ 2817 (LC)The above matter came before the Labour Court as an automatically unfair dismissal relating to an allegation that the employer had circumvented a transfer of Mr Slabbert's employment to the purchaser of the business in terms of Section 187 (1) (g) of the LRA alternatively had committed an automatically unfair dismissal based on age as contemplated in Section 187 (1) (f) of the LRA.
The Facts
- Mr Slabbert was employed by the motor dealership Autohaus as a sales consultant.
- Some time after Mr Slabbert turned 65, he was promoted to the position of Used and New Car Sales Manager at Autohaus.
- During 2020 the Muji Motor Group (Pty) Ltd (Muji) purchased Autohaus as a going concern and the contracts of all the employees of Autohaus including Mr Slabbert's contract of employment were transferred to Muji in terms of Section 197 of the LRA.
- Mr Slabbert, who had just turned 70 at the time of the transfer of the business of Autohaus, was advised by the Director of Muji that as he had reached the normal retirement age of 65 for the motor industry, and as he had rejected Muji's offer of a freelance position, he was being retired.
- Mr Slabbert approached the Labour Court claiming an automatically unfair dismissal as contemplated in terms of Section 187 (1) (g) alternatively 187 (1) (f) of the LRA.
- The Labour Court then considered the facts of the matter in order to determine the proximate cause of Mr Slabbert's dismissal, i.e. whether he was dismissed as part of a stratagem to circumvent the Provisions of Section 197 of the LRA or whether he was dismissed based on age.
- The Court concluded that the proximate cause of Mr Slabberts' dismissal was not the transfer of Autohaus to Muji as a going concern but was rather his age.
- The Court then considered Muji's contention that the normal retirement age in the motor industry was 65 years and that this had become a term and condition of his employment with Autohaus and subsequently Muji.
The Court's Findings
The court went directly to the Main Collective Agreement for the Motor Industry (MIBCO). The Court, however, found that the retirement age of 65 as contemplated in the MIBCO Main Agreement only applied to certain categories of employees falling under such Main Agreement, and that Mr Slabbert did not fall within the categories of employees as included in the Main Agreement. The retirement age of 65 contemplated in the Main Collective Agreement therefore did not apply to him.
The Court failed to accept that the age of 65 could broadly be considered the normal retirement age in the motor industry without proof for this allegation being furnished by Muji.
More particularly, the Court found that Muji had failed to show that the retirement age of 65 was normal for employees employed in the capacity of Sales Managers, such as Mr Slabbert.
The Court then found that Mr Slabbert had been automatically unfairly dismissed as contemplated in Section 187 (1) (f) and awarded him compensation equivalent to 12 months' remuneration.
In Conclusion
- Muji was fortunate that the Court only awarded Mr Slabbert compensation equivalent to 12 months' remuneration as the maximum compensation which the Court can award in the case of an automatically unfair dismissal, is 24 months.
- The Court has effectively dispelled the broad sweeping assumption that the age of 65 years is the normal retirement age across industries and occupations in South Africa and has held that the normal retirement age must be determined with reference to the particular job and sector/industry in which the employee is employed.
- The Judgment highlights the importance of specifying a retirement age in contracts of employment and not simply relying on a general opinion that the age of 65 is a universally accepted normal retirement age.
- To the extent that employers find themselves in situations where they have to rely on a normal retirement age, they must allege and prove the normal retirement for the particular occupation within a particular industry. It is therefore no longer sufficient for employers to prove the normal retirement age within an industry but need to go further and prove that such normal retirement age is applicable to the occupation the employee is employed in. This is not a straightforward exercise, and employers should think twice before simply relying on a normal retirement age to retire employees.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
