Why Consistency and Contract Clarity Still Matter at 65
By now, most employers know that age-based dismissal must be handled carefully. But a recent ruling in Kruger v UNISA adds nuance—and a vital reminder: retirement at 65 is not automatically unfair, provided your policies are consistent and your contracts are clear.
The case offers timely guidance for SMEs navigating retirement age clauses, particularly where some employees have been retained post-65, and others have not. What looks like age discrimination at first glance, may in fact be entirely lawful—if the rules are properly written and fairly applied.
The Case at a Glance
The employee, Mr Kruger, challenged his dismissal upon reaching the age of 65, arguing that it was discriminatory and procedurally unfair—especially since some of his colleagues were allowed to remain in service beyond the retirement age.
UNISA defended its position on the grounds that:
- The employee’s contract clearly stipulated a retirement age of 65.
- The institution’s policy was consistent with this provision.
- Post-retirement contract renewals for other employees were exceptional and subject to separate criteria—not an automatic entitlement.
The Labour Court sided with UNISA.
The Court’s Finding
The court confirmed that dismissal on the grounds of age is not unfair if both the employment contract and the employer’s retirement policy clearly provide for it, and if that policy is applied fairly.
In this case:
✅ The retirement age was contractually agreed upon.
✅ The employer applied the policy uniformly.
✅ The fact that some employees were retained did not amount to automatic unfairness, as those cases involved discretionary renewals based on operational needs and specific approvals.
The court drew a firm line between exceptions and entitlements.
Why This Matters to Employers
Age-related dismissal remains a sensitive and high-risk area—especially in workplaces where:
- Long-serving staff may assume entitlement beyond formal agreements
- Employers have been inconsistent in handling post-retirement extensions
- No retirement policy exists, or the contract is vague
A misstep in these areas could open the door to discrimination claims.
What You Should Do Now
(SA)UEO recommends that all business members—regardless of size—take the following proactive steps:
- Audit Your Contracts
Ensure all employment contracts state a clear and unambiguous retirement age. - Establish a Formal Retirement Policy
Don’t rely on ad hoc practices. Formalise criteria for contract extensions and communicate them. - Apply Policies Consistently
If some employees are extended past retirement age, document the business rationale—preferably using written approval processes. - Avoid Making Exceptions the Rule
Flexibility is not a problem—but inconsistency is. Be deliberate, not casual, when deviating from policy.
Final Word from (SA)UEO
“This case doesn’t just settle a legal technicality—it shows that clarity and consistency are a business owner’s best defence,” says Elise Coetser, General Secretary.
If you’re unsure whether your current employment contracts or retirement policies are fit for purpose, your organiser can assist—or contact info@saueo.co.za for guidance.
Let’s build businesses that are both fair and future-fit.
