This can present a pitfall unless employers formalise a specific retirement age for their employees or different categories of employees.
This is important as SA Labour legislation does not make any provision for a retirement age. This is an area which is often neglected by employers. Unless a specific retirement age is reflected in an employment contract or in an employee benefits scheme, where the retirement age might differ for various categories of employees, letting an employee go on the grounds of age only will automatically be considered as unfair dismissal.
As mentioned, a properly worded employment contract which specifically states a retirement age is the best way to ensure that there are no difficulties when an employee reaches the specified age.
Allied to this is the fact that employers should feel some financial obligation towards providing benefits for their employees at retirement or on prior death or disablement. We therefore recommend that a properly structured and affordable retirement fund, with associated risk benefits, should be a must for all employers.
If you would like to know more about how Maximus can assist you and your business in this regard, then please contact your Maximus Adviser or Susan at 011 656 -2910 (susan@maximuswm.co.za).