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Thread: Retiring staff - options?

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    Retiring staff - options?

    Good day all.

    Our bookkeeper has been employed with our company since it's inception 27 years ago.

    Her employment contract at the time was obviously something copied from a handbook, a very generic template that was meant only as a base guide, but as our beginnings were very informal, it was never tweeked to suit the company specifically.
    Under the subheading "Retirement" there were 3 options, 55, 60, 65 being the ages stipulated that the employee would retire.
    One of these options should have been ticked, but never was.
    To be honest I doubt that anyone ever envisaged the company surviving long enough that retirement would become a reality.

    The situation is quite delicate as she sees herself as a "family friend", I see her as obsolete and overpaid. She turned 60 earlier this year and I believe it is time for some younger more tech savvy blood.

    If a retirement age is not specified in the contract, can I ask or if need be, insist that she retire?

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    Silver Member Greig Whitton's Avatar
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    In the absence of an employment contract (or similar agreement) clearly specifying a retirement age, you can rely on your company's "normal retirement age". This could be validated by relevant workplace policies or even any pension or provident fund rules applicable to your workforce.

    If you don't have an employment contract specifying a retirement age, and you can't validate a "normal retirement age" for your business, then you're out of options since dismissing an employee on the basis of their age would amount to an automatic unfair dismissal.

    There was a Labour Court case two years ago which centered around a retirement age dispute: the employee claimed unfair dismissal because his employer insisted that he retire when he turned 63 per the company's workplace policy. However, the Labour Court ruled in the employee's favour because he was able to substantiate his claim that the founder of the company agreed that he could retire at 65 when he first took up employment.

    Founder of Evergrow - Helping South African business owners grow their business without the growing pains

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    AndyD (16-Aug-17), SCW (17-Aug-17)

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    Thanks Greig, That is what I feared.
    I was hoping that as there is no precedent, contract or verbal agreement that stipulates an age for retirement in our company, that I might be able to fall back on the government norm (60 I heard for women)?

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    Silver Member Greig Whitton's Avatar
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    Some government departments had (and may still have) policies specifying retirement ages, but there has never been a national retirement age for the private sector.

    Two options that come to mind for your situation:

    1. If you haven't done so already, discuss the situation with your employee and try to reach an amiable compromise (you never know - maybe she wants to retire but doesn't want to let you down!)

    2. Introduce a policy specifying retirement (in consultation with your employees) and negotiate a transitional plan for any employees already affected by it (e.g. any employees already over your company's retirement age may remain employed for 2 years to prepare for their mandatory retirement).

    Technically, you could also make this a performance or operational issue rather than a retirement issue. You mentioned that you want someone more "tech savvy" (implying that your current employee lacks valuable skills) and that you consider her overpaid (implying that her salary is detrimental to your company's interests). So there are possible grounds for dismissal, but that could get ugly and you mentioned that this is already a delicate situation.

    Founder of Evergrow - Helping South African business owners grow their business without the growing pains

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    There are a few other ways out of the situation as you say, I was just looking for the easiest one. I hate conflict.
    This problem has definitely highlighted the fact that the original work contracts (drawn up by the very lady I wish would retire ) are no longer sufficient and I will now set about amending and upgrading them.
    Thanks

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