Executive Case Summary
When an employee continues working past their agreed retirement date without a new fixed-term contract, can the employer later invoke Section 187(2)(b) of the LRA to terminate employment solely on the basis of age?
The Constitutional Question Under Section 187(2)(b) of the LRA
In Motor Industry Staff Association & Another v Great South Autobody CC t/a Great South Panelbeaters (consolidated with Solidarity obo Strydom & Others v SITA SOC Ltd), reported at 2025 ILJ 481 (CC), Dr. Gerrie Ebersöhn represented the appellants before the Constitutional Court of South Africa in one of the most consequential employment law matters of the decade.
Under section 187(1)(f) of the Labour Relations Act 66 of 1995 (LRA), a dismissal is automatically unfair if the reason for the dismissal is unfair discrimination on grounds including age. However, section 187(2)(b) provides a statutory defence: a dismissal based on age is fair if the employee “has reached the normal or agreed retirement age for persons employed in that capacity.”
What Happens When an Employee Works Past Retirement Age?
In practice, many South African employers allow valued senior employees to continue working months or years beyond their 60th or 65th birthday without executing a new post-retirement fixed-term contract. The legal dispute arises when the employer subsequently gives notice to retire the employee strictly by relying on section 187(2)(b).
The evenly divided judgments in the Constitutional Court highlight the acute legal risk for both employers and employees:
Strict Contractual & Statutory Timing: Employers who permit employees to work past their agreed retirement date without formalizing a new post-retirement agreement face substantial litigation exposure if they later attempt an abrupt age-based termination.
Protection of Older Employees: Employees who continue rendering services beyond retirement age retain vital constitutional and statutory protections against arbitrary termination.
Practical Takeaway for Employers & Employees: Before an employee reaches the agreed retirement milestone, parties must obtain specialist legal advice to structure a compliant post-retirement fixed-term contract or retirement transition protocol.
Specialist Labour Litigation Counsel
Need advice on a retirement-age dismissal or LRA dispute?
Speak directly with Dr. Gerrie Ebersöhn’s litigation team in Randpark Ridge, Randburg.