Retirement age used to feel like a full stop. An employee turned 60 or 65; the pension paperwork was issued, and the employment relationship ended cleanly. In practice, many South African employers let valued staff carry on well past that date — sometimes because the skills are hard to replace, sometimes simply because no one got around to actioning it — and then face an awkward question months or years later: Does the employer forfeit the right to enforce that retirement age simply because they allowed the employee to continue working?

This question is particularly relevant considering Section 187(1)(f) of the Labour Relations Act 66 of 1995 (LRA), which states that a dismissal is automatically considered unfair if it is based on the employee's age.

However, Section 187(2)(b) provides a significant exception: an age-related dismissal is not automatically unfair if the employee has reached the normal or agreed retirement age for their position.  

Continuing to Work Does Not Automatically Change the Retirement Age
It is essential to distinguish between allowing an employee to work beyond the retirement age and officially changing that retirement age. Continued employment does not imply an agreement that the employee may remain on the job indefinitely or until a new retirement age is established.

This distinction is particularly important for employers who retain experienced employees for reasons such as operational needs, succession planning, skills transfer, or temporary staffing requirements. It would be unusual for the decision to retain such employees to result in the permanent elimination of the employer's established retirement policies.

The Constitutional Court Position
In the case of Motor Industry Staff Association and Another v Great South Autobody CC t/a Great South Panel Beaters; Solidarity obo Strydom and Others v State Information Technology Agency SOC Limited [2024] ZACC 29, the Constitutional Court issued three separate judgments and did not reach a consensus on the interpretation of section 187(2)(b).

Four judges took a restrictive view, holding that an age-based dismissal is fair only if the employee is terminated upon reaching the normal or agreed-upon retirement age.

In contrast, another group of four judges, led by Rogers J, favoured a more employer-friendly interpretation. They concluded that once an employee reaches the normal or agreed retirement age, section 187(2)(b) allows the employer to terminate the employment “then or at any time thereafter,” provided reasonable notice is given.

A further judgment proposed an intermediate contractual approach. This view acknowledged the employer's right to choose whether to terminate employment but asserted that this right may be forfeited if not exercised within a reasonable timeframe.

Note that the Constitutional Court did not, by a majority, rule that an employer loses the right to invoke the retirement age at any time, simply because the employee continues to work after reaching that age.

The Employer’s Position
There is a strong legal basis for an employer to terminate an employee at any time after they have reached the agreed or standard retirement age, provided that age remains applicable and has not been changed or waived.

The phrase “has reached” is important. For example, an employee who is 66 or 67 years old has technically already reached age 65. Based on the common interpretation of the language, reaching a certain age is not a status that disappears the next day.

This perspective is also commercially reasonable. An employer may allow an employee to continue working beyond retirement age but later decide, based on factors such as succession planning, restructuring, workforce renewal, or other legitimate business needs, that it is time for the employee to retire. Just because the employer did not terminate the employee on their retirement birthday does not mean that a lawful retirement policy becomes an unlawful dismissal.

Practical Steps for Employers
Employers considering post-retirement termination should take the following precautions:

• Establish the retirement age. Identify the contractual, collective-agreement or established workplace basis for the normal or agreed retirement age.
• Check whether the retirement age was subsequently varied. Determine whether the employee was simply permitted to continue working or whether a new express or tacit agreement was established as a later retirement age.
• Avoid ambiguity. Where an employee works beyond retirement age, record that the original retirement age remains applicable.
• Give appropriate notice and follow a fair process. Even where section 187(2)(b) is relied upon, the employer should communicate the decision properly and give appropriate notice.

The Bottom Line
The Constitutional Court's decision should not be interpreted as meaning that an employee who continues to work beyond retirement age automatically gains the right to remain employed indefinitely. 

When a normal or agreed-upon retirement age is clearly established, and there is no subsequent agreement to change that age or any explicit waiver from the employer, there is a strong legal basis for terminating the employment relationship under section 187(2)(b) once the employee reaches the specified retirement age OR anytime thereafter.

For employers, the key takeaway is clear: retirement may be postponed, but it is not necessarily cancelled. Seek legal advice before proceeding with termination.

While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither the writers of articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes.


SOURCES
• Motor Industry Staff Association and Another v Great South Autobody CC t/a Great South Panelbeaters;
Solidarity obo Strydom and Others v State Information Technology Agency SOC Limited [2024] ZACC 29
(Constitutional Court).
• SchoemanLaw Inc, “Dismissal After Reaching Retirement Age”.
• Cliffe Dekker Hofmeyr, "Employment Law Alert: The Constitutional Court, retirement age and uncertainty —
employers be aware," 27 January 2025.
• Kruger v University of South Africa [2025] ZALCJHB 242 (Labour Court).
• Bowmans, "Working beyond retirement age: implications for employers."Moonstone, "ConCourt divided over
employer's right to dismiss post-retirement employees."
• Labour Relations Act 66 of 1995, ss 187(1)(f) and 187(2)(b)