December 17, 2020
“An inability on the part of the parents to maintain a child must be established before a grandparent will be legally liable to do so” (extract from judgment below)
One wonders how many grandparents are aware of (let alone plan for) the possibility that they may have a legal duty to support their grandchildren in certain circumstances.
It could be a heavy blow – trying to navigate one’s retirement financially can be hard enough without suddenly having to maintain not only yourself and your spouse but also a grandchild, possibly for decades. And what about the risk that when you die your deceased estate might remain liable – a drain, possibly a critical one, on your estate’s sufficiency to support your surviving spouse?
A recent Supreme Court of Appeal (SCA) decision confirms that –
- As a grandparent you are potentially liable for maintenance during your lifetime but
- When you die, your deceased estate will (as the law currently stands) not be liable.
The adult granddaughter’s claim and the law
This was a damages claim against the executors of a grandfather’s deceased estate based on the proposition that the estate was liable to pay maintenance for a 30-year-old granddaughter unable to support herself because of psychiatric issues, mild intellectual disability and an autism spectrum disorder. The father had emigrated, had paid no maintenance, and was allegedly untraceable, whilst the mother’s ability or inability to fully support her child had not been established.
The SCA was asked to break new legal ground by extending a grandparent’s liability to his or her deceased estate, but on the evidence before it in this case (i.e. our courts may revisit this issue in the future) the Court declined to extend the law in this way, and set out our current law as follows –
- Liability for maintenance generally depends on three factors –
- The claimant’s inability to support him or herself.
- His or her relationship with the person from whom support is claimed.
- That person’s ability to provide support.
- The primary caregivers are the parents who have a duty of support as far as they are able to do so (this applies also to the parents’ deceased estates when they die).
- Parents and children have a reciprocal duty of support.
- “If parents are unable to support their children who are in need of support, other relatives including grandparents, may be obliged to support them … But that duty is imposed first upon a nearer relative before it moves to remoter ones.” (Emphasis supplied).
- However, as our law stands, a grandparent’s deceased estate is not liable.
In summary – 3 factors for liability
In other words, you (but currently not your deceased estate) could be liable to pay maintenance if –
- Your grandchild is not self-supporting,
- Neither parent (nor their deceased estates) is financially able to provide the necessary support, and
- You are financially able to do so.
May 21, 2020
The National Lockdown has thrown together many couples not used to spending “24/7” time in each other’s company. Relationships will have strengthened for many couples, but others will be struggling. The fears, anxieties and money worries now looming over us all certainly won’t haven’t helped.
If your marriage is one of those unfortunate ones that is foundering, counselling hasn’t helped or won’t help, and you have come to the decision that divorce is your only option, be aware that you need a formal court order before your divorce will be legally recognised.
Moreover our law does not recognise the concept of “legal/judicial separation” so if you decide to just physically separate without divorcing, you should take professional advice on drawing up a contract in the form of a “separation agreement”. Normally this would be for a trial period but you could also agree to a longer-term separation.
The 3 grounds for divorce
In most cases couples opt for formal divorce rather than long-term separation, and it is important to appreciate that a court will only grant a divorce order if it is satisfied that at least one of the three recognised grounds for divorce exists.
In practice most couples will fall under the first ground i.e. “irretrievable breakdown of marriage” but to give you the full picture, the grounds for divorce in full are (all quotes are straight from the Divorce Act) –
- Irretrievable breakdown of marriage
This is by far the most commonly relied on ground for divorce: “A court may grant a decree of divorce on the ground of the irretrievable breakdown of a marriage if it is satisfied that the marriage relationship between the parties to the marriage has reached such a state of disintegration that there is no reasonable prospect of the restoration of a normal marriage relationship between them.”The court may take into account “any facts or circumstances which may be indicative of the irretrievable breakdown of a marriage” and may also accept evidence that –
- The spouses have not lived together for “a continuous period of at least one year immediately prior to the date of the institution of the divorce action”;
- The spouse being sued for divorce has committed adultery and the other spouse “finds it irreconcilable with a continued marriage relationship”; or
- The spouse being sued for divorce “has in terms of a sentence of a court been declared an habitual criminal and is undergoing imprisonment as a result of such sentence”.
However: “If it appears to the court that there is a reasonable possibility that the parties may become reconciled through marriage counsel, treatment or reflection, the court may postpone the proceedings in order that the parties may attempt a reconciliation.”
- Mental illness
The court must be satisfied of two things here –
- The spouse must have been admitted to or detained in an institution under our mental health legislation as a patient, State patient or mentally ill convicted prisoner, and “has, for a continuous period of at least two years immediately prior to the institution of the divorce action, not been discharged unconditionally”, and
- After having heard the evidence of at least two psychiatrists, of whom one shall have been appointed by the court, that the defendant is mentally ill and that there is no reasonable prospect that he will be cured of his mental illness.”
- A state of continuous unconsciousness “by reason of a physical disorder”
Again the court must be satisfied of two things here –
- The unconsciousness must have lasted “for a continuous period of at least six months immediately prior to the institution of the divorce action”, and
- After having heard the evidence of at least two medical practitioners, of whom one shall be a neurologist or a neurosurgeon appointed by the court, that there is no reasonable prospect that the defendant will regain consciousness.
Having grounds for divorce is not the end of the story
You will need also to satisfy the court that “the provisions made or contemplated with regard to the welfare of any minor or dependent child of the marriage are satisfactory or are the best that can be effected in the circumstances”.
Consider also, and prepare for, questions around division of assets and maintenance.
April 17, 2020
If you live as a couple, avoid the trap of believing the myth of the “common law marriage”. It’s a very persistent myth, possibly because some other countries do indeed give formal recognition to certain forms of life partnership.
But not in South Africa – there is no such thing in our law as a “common law marriage”. No matter how long you have lived together, if you break up or when one of you dies, neither of you automatically has any of the rights and protections afforded to a couple in a marriage or civil union.
Apart from the personal consequences the financial downsides can be huge, and our courts are all too often faced with sad and bitter disputes which end with one of the partners destitute and homeless after decades of cohabitation.
A recent High Court case highlights the financial dangers…
22 years on, a couple splits
- For most of 22 years, with only a short early separation, a man and woman “in a romantic relationship” lived as a couple, in a household complete with the woman’s daughter from a previous relationship.
- They had been jointly involved to one degree or another in a series of business ventures including vegetable farming (on a farm purchased in the man’s name), commercial blasting, a bakery and a packaging business, and what was at stake in the High Court was whether the woman could prove her claim to a 50% share of the resultant assets.
- The facts were bitterly disputed, with the man adamant that the relationship had been nothing more than co-habitation as lovers. But eventually the Court concluded, on the basis of the facts that it found proved, that “the parties intended to pool their resources for the benefit of a joint estate” and that the woman had accordingly proved the existence of a “universal partnership”.
- Not however to the 50/50 extent she claimed, and the end result is that at age of 47 and after 22 years she leaves the relationship with only 30% of the net assets. Hard though that may seem, she could easily have been left with nothing, as we shall see below when we look at what our law says about such relationships.
The difficulty of proving a “universal partnership”
The problem in such a case is that you have to prove a lot more than just cohabitation.
You also need to prove the existence of a “universal partnership” and that, as many cases in the past have illustrated, is not easily achieved, not least because the onus is on you to prove your case. You will need to prove all of the following –
- Each of the parties brought something into the partnership, or bound themselves to bring something into it, whether it be money or labour skills;
- The business had been carried on for the joint benefit of both parties;
- The object was to make a profit; and
- The partnership contract was legitimate.
If, as is common in this sort of situation, you rely on a “tacit” agreement (an unexpressed agreement inferred from your actions as a couple), you have to go further and prove that –
- The other person was fully aware of the circumstances connected to the transaction;
- The act relied upon was unequivocal; and
- The tacit contract does not extend beyond what the parties contemplated.
Again, not easily proved, as “A tacit contract will be interpreted strictly and not extensively, since a contract must be interpreted in favour of the person on whom it is sought to place an obligation.”
The good news – there’s a simple solution…
We have talked above only about the financial consequences of life partnerships which are unregulated by agreement. But formal marriage also provides a range of other legal benefits and protections (such as rights of inheritance and support and other personal aspects of your relationship) which are not automatically available to you.
Fortunately you can avoid all the risk and uncertainty of an unregulated relationship with a quick and simple solution – a formal cohabitation/life partnership agreement.
Just be sure to get it in place early on. Take professional advice (jointly – this is to protect you both!) as soon as you commit to a long-term relationship.
January 15, 2020
“What’s the only thing divorce proves? Whose mother was right in the first place” (Anon)
The festivities are over, the bills are coming in and everyone is returning to reality. Couples who for most of the year only have to live with each other after work hours, have suddenly spent a whole lot more 24/7 time in each other’s close company. Little irritations have magnified, habits have got on each other’s nerves, in-laws visiting for the annual family bun fight have heightened tensions…
Whatever the reasons, and whether only one party was at fault or both, January’s worldwide reputation as “divorce month” applies equally here in South Africa. Which means that the legal and personal risks associated with divorce are peaking now, in January.
On the legal side of things a particular risk to be aware of is the temptation for couples splitting on an “uncontested” (i.e. by mutual agreement) basis to opt for a “DIY” divorce.
Beware, that’s a siren’s call…
The dangers of a DIY divorce
Divorce is full of both legal and practical pitfalls, and any mistakes a divorcing couple makes now could well live with them, their children, and their extended families for life.
The hard fact is that whilst DIY divorce may seem affordable and workable, specific legal assistance and guidance is worth every cent it costs – and particularly in uncontested matters the cost of proper legal help certainly won’t break the bank. Without such advice, the average couple risks the exact opposite of “affordable” in the form of a great deal more expense (not to mention stress and heartache) than had they consulted an attorney upfront.
To illustrate some of the many relevant issues the couple must take into account –
- Formalities: Getting divorced means complying with a list of formalities and requirements, and appearance in either the High Court or the Divorce Court. Getting anything wrong here is a recipe for disaster.
- Consent paper: A settlement agreement (often called a “deed of settlement” or “consent paper”), setting out what the couple has agreed to regarding children, maintenance, division of assets etc, should be made an order of court to give it the status of an enforceable judgment. The agreement should cover everything important, clearly and unambiguously – overlooking something vital (easy for the layperson to do) will come back to haunt everyone.
- Children: The most vulnerable parties in any familial breakup, children enjoy special protections in our law, and parents need to take into account questions of parental responsibilities and rights including “care and contact” (the new terms for “custody and access”), guardianship, maintenance, formal “parenting plans”, health care and the like.
- Maintenance: In addition to child maintenance, one spouse may have a claim on the other for spousal maintenance, either on an interim basis or longer-term.
- Financial implications and division of assets: Particularly where valuable assets are involved (a house or other property perhaps, or rights to a pension fund) the divorcing couple should agree on a split, on how property transfers will work, who will pay for what, who will assume financial obligations like home bonds etc. Which “marital regime” the couple was married under becomes important here, as does the question of whether or not there is an ANC (ante-nuptial contract) in place. A whole host of other legal and practical issues are also at stake.
A final thought on controlling costs…
If you have a particular need to control costs, be open with your attorney and ask for advice on whether you can minimise them in any way.
December 19, 2019
“We’re all going on a summer holiday…” (Cliff Richard)
With the Festive Season (and our Summer Holidays!) well and truly upon us, you may be inviting family or friends to visit you from overseas with their children, or perhaps you are a foreigner planning a family trip to South Africa. Either way here’s some good news in the form of a welcome concession from government in regard to the documentation you will need to produce on entry.
In a nutshell foreign children until now have only been able to enter the country with unabridged birth certificates and consent letters. That requirement was waived – for accompanied children only (check the full details in the table below) – from 8 November 2019.
The Department of Home Affairs (DHA) says it has communicated this very welcome new development to all role players, most importantly to the immigration officials at ports of entry who are tasked with enforcing the rules, but if you do happen to have documentation handy it can’t hurt to bring it along in case of any queries. If you need visas to visit you will anyway have to produce the documents when applying.
South African children (and unaccompanied foreign children) must still provide a list of required supporting documents – see below.
Note that the above is just a summary – it is extremely important that you check the DHA table below for full details, and that you ask your lawyer for help if you think any exemptions may apply, if you have any difficulty in understanding what is required, or if you cannot get the necessary documentation together.
DOCUMENTS REQUIRED FOR CHILDREN TRAVELLING THROUGH A PORT OF ENTRY OF THE REPUBLIC
November 11, 2019
“And she’s got brains enough for two, which is the exact quantity the girl who marries you will need” (P.G. Wodehouse)
Wedding Season being once again well and truly upon us, the chances are high that even if you yourself aren’t contemplating marriage you know of someone who is. If so, please think of forwarding this article to them.
Planning and preparing for your wedding is an exciting and busy time, and your ‘To Do’ list will be a long one. Plus you will be stressed for time, and distracted, and it will be tempting to put the “boring” legal bits and pieces low down on your list.
Don’t do that! A visit to your lawyer is an essential, not a “nice to have” to be squashed in between “Book Airbnb for Auntie Jo” and “Bath dog”. First on the agenda for your legal consultation will be an ANC…
Your ANC – what it is and why it is vital
Your ANC or “antenuptial contract” is an agreement you enter into with your future spouse, before you get married, which regulates your financial (and to some extent your personal) affairs.
Do not be put off the idea of an ANC because you think it might be an admission that your marriage may fail. For two very good reasons it is nothing more nor less than a vitally important part of your future planning –
- Firstly, no matter how strong your marriage may be, our divorce statistics make it very unwise to discount the possibility – however remote – that for some unforeseeable reason and at some unforeseeable time in the future, one or both of you will be visiting a divorce lawyer. Whose first question will be “Let me see your ANC”.
- Secondly, an uninformed choice now will have serious consequences for you, for your spouse and in due course for your children both throughout your marriage and when (not if) one of you dies.
Choosing the marital regime that is right for you
Our law allows you three options, which we discuss below.
Bear in mind that this is a summary only and that no article can do full justice to the many individual factors you should take into account. That’s why a visit to your attorney – well before you actually tie the knot – is vital. Ask what the right option is for your particular needs and circumstances, and have your ANC tailored accordingly.
Your 3 choices, and a trap for the unwary
- Marry in community of property: All of your assets and liabilities are merged into one “joint estate”, in which each of you has an undivided half share. Everything (with only a few specific exceptions) that you bring into or acquire during your marriage falls into this joint estate. You will need your spouse’s written consent for some important transactions. On divorce or death the joint estate (including any profit or loss) is split equally between you, regardless of what each of you brought into the marriage, or contributed to it thereafter. If one of you runs up debts or gets into financial difficulties, it is the joint estate that must pay – you could lose everything if your joint estate is sequestrated. That all makes this option unsuitable for many couples. The big danger for the unwary is that it is the default regime – so you will automatically be married in community of property if you don’t specify otherwise in an ANC executed before you marry.
- Marry out of community of property without the accrual system: Your own assets and liabilities, both what you bring in and what you acquire during the marriage, remain exclusively yours to do with as you wish – so you don’t need your spouse’s consent for any of your own transactions. You are not liable for your spouse’s separate debts and if your spouse’s estate is sequestrated you can claim your separate assets back (you will need to prove that they are indeed yours). Note that the “accrual system” (see option 3 below) will apply to you unless your ANC specifically excludes it. Excluding accrual will be the right choice for some, but be aware that without accrual the poorer spouse (usually a spouse whose contribution to the marriage was more on the home-making side rather than financial) risks being left destitute after many years of marriage.
- Marry out of community of property with the accrual system: Firstly, although this is often seen as being the fairest and most popular option for modern marriages, it is not necessarily the best choice for everyone. As with the previous option, your own assets and liabilities remain solely yours, you don’t need your spouse’s consent for any transactions relating to them, and you can protect your own assets from your spouse’s creditors. On divorce or death you share equally in the “accrual” (growth) of your assets (with a few exceptions) during the marriage, as the example below illustrates –
Different principles apply to your marriage if you were married before 1 November 1984 – ask your attorney for details.
If you for any reason want to change from one marital regime to another, or if you want to enter into a “postnuptial contract”, that may be an option for you – ask your attorney.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
November 11, 2019
“The number of cases of dementia is estimated to almost triple by 2050” (World Health Organisation)Although the actual prevalence per capita of dementia is reportedly on the decline, aging populations ensure that it is becoming more and more of a problem in society – for older people, their families and caregivers. If someone close to you (normally an aging parent or relative) needs – or may in the future need – assistance with their financial affairs, your first thought will probably be a power of attorney by which the “principal” appoints an “agent” to act for him/her, either for a particular purpose (a ‘special power of attorney’) or generally (a ‘general power of attorney’). You may well have the same thought if you yourself are approaching old age and starting to plan for your future needs. A power of attorney is certainly a quick, cheap and easy solution but be careful – it’s only a temporary one. It is not “forever”!
The downside – automatic termination (just when help is most needed)Of course a principal can cancel his/her own power of attorney at any time, but what is not so well known is that it terminates automatically if and when the principal –
- Dies (an executor is then appointed); or
- Becomes insolvent and his/her estate is sequestrated (a trustee is then appointed); or
- Becomes mentally incapacitated in the sense of being no longer able to make his/her own decisions for whatever reason – perhaps a stroke, coma following an accident, mental illness, dementia, Alzheimer’s, general age-related diminishing capacity etc.
So what are the alternatives?
- The High Court can appoint a “curator” when a person becomes unable to manage his/her own affairs. A curator bonis handles all the person’s financial affairs, a curator ad personam his/her personal affairs (such as giving consent for medical treatment, where to live etc). Unfortunately curatorships are costly, prone to bureaucratic red tape and delay, paternalistic and, being public, demeaning to the principal.
- A simpler and cheaper alternative is the appointment by a Master of the High Court of an “administrator” in terms of the Mental Health Care Act. An administrator only has power to deal with the person’s property (not personal affairs), and this alternative is only available in cases of actual “mental illness” or severe/profound intellectual disability, and only for smaller estates (assets up to R 200,000 and annual income up to R 24,000).
- A trust to address the purely financial aspects might also be worth considering whilst the person in question still has legal capacity. Take advice however on the costs, tax and other implications.
What about an “enduring” or “conditional” power of attorney?In 2004 the South African Law Reform Commission recommended changes to our law to allow for alternatives like –
- An “enduring power of attorney” (or “EPA”) which would remain valid despite the subsequent incapacity of the principal; and
- A “conditional power of attorney” which would come into operation only on the incapacity of the principal.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
February 20, 2019
“…it can hardly be in the best interests of all concerned for this family to remain at the School” (Extract from judgment below)
With the new School Year now well under way, let’s have a look at a recent court decision of interest to all schools, parents and learners.
Importantly, this case involves not a state-controlled public school but a private school (private schools being recognised in our national schooling system as “independent schools”).
Sins of the Father – bad behaviour, death threats, expletives and expulsion
- The parent contract between a private school and the parents of two learners (aged 9 and 11) included a termination clause, invoked by the school against the parents following “… a sorry tale of misconduct on their part spanning eight months….” which “… created a toxic and intolerable atmosphere.” The clause gave the school “the right to cancel this Contract at any time, for any reason…” on one term’s notice.
- Effectively, the learners were expelled from the school because of a series of (alleged) incidents, mostly involving the father at school sporting matches. He was, for example, alleged to have shouted abuse at the umpire in an Under-9 cricket match after disagreeing with an LBW decision against his son, and then to have approached the umpire with a cricket-bat in his hand, saying: ‘you fat . . . (expletive omitted), you don’t respect parents’, and threatened to wait for him after the match and kill him.
- The parents failed in their bid to have the High Court set aside the contract’s cancellation. They lost again on appeal to the Supreme Court of Appeal (SCA), which rejected their attempts to have the termination clause declared unconstitutional and contrary to public policy.
- The school, held the Court, “was acutely aware of its constitutional duties not only to the appellants’ children but to all the affected parties in cancelling the contracts. Its reason for doing so, though not relevant, was unimpeachable, given the extraordinary behaviour of the appellants… it can hardly be in the best interests of all concerned for this family to remain at the School.”
- Critically, the Court accepted that the school in terminating the contract had applied the principle “that the best interests of the children is paramount in whatever it does”. Our courts always prioritise a child’s best interests in any matter before them, and schools should ensure that their parent contracts, policies and actions are all fully compliant with that principle.
November 21, 2018
“To my mind the best proof of solvency is that a man should pay his debts” (quoted in the judgment below)
If you are owed maintenance you have a variety of enforcement options open to you and should ask your lawyer for advice on which is the best for your particular claim and circumstances.
A recent High Court judgment confirms that one of the weapons in your legal armoury is the sequestration application. And as the defaulter’s desperate attempt to avoid sequestration in this particular case illustrates, even just the threat of sequestration can be a powerful motivator to settle up, regardless of whether your claim is based on maintenance arrears or on any other form of debt.
The reason is that an insolvent has to surrender control of his/her estate to a Trustee, who collects and sells all the insolvent’s assets and divides the proceeds between the creditors. The insolvent can also be ordered to pay over any excess earnings – such as for example monthly salary less reasonable expenses – to the Insolvent Estate. That’s a lot of control to lose over one’s own affairs.
Maintenance arrears and a “no goods” return
In this particular case –
- As part of a divorce settlement, a father was ordered to pay child maintenance, but fell behind and ran up substantial arrears.
- His ex-wife obtained judgment against him in the maintenance court for R45k and the sheriff, with a warrant of execution against property in hand, attached a motor vehicle belonging to the father.
- Unfortunately the sheriff did not actually remove and sell the vehicle at the time and three months later it was gone. The sheriff then rendered a nulla bona (“no goods”) return when the husband claimed to have no money or attachable assets.
- The mother then applied for the sequestration of the father’s estate, and the father raised two main defences –
“I’m not actually insolvent”
To sequestrate someone’s estate you have to prove either actual insolvency (not always easy to do) or an “act of insolvency”. And although the sheriff’s nulla bona return in this matter qualified as an act of insolvency, the husband still insisted that he was actually solvent. He didn’t deny owing the R45k (plus by that stage another R183k) but said that he would make payment once he received tax refunds from SARS in the future.
The Court dismissed this argument, quoting from a 1907 judgment: “Speaking for myself, I always look with great suspicion upon, and examine very narrowly, the position of a debtor who says, ‘I am sorry that I cannot pay my creditor, but my assets far exceed my liabilities’. To my mind the best proof of solvency is that a man should pay his debts; and therefore I always examine in a critical spirit the case of a man who does not pay what he owes” (our emphasis).
It was just not good enough, said the Court, for the father to say that he would eventually pay.
“Sequestration won’t be to the advantage of my creditors”
To get a sequestration order you must also prove that “there is reason to believe that it will be to the advantage of creditors of the debtor if his estate is sequestrated”.
The husband’s contention here was that he was under debt review in terms of the National Credit Act, and was making payments to his creditors. The flaw in this argument, said the Court, was that only listed creditors were being paid under the debt review arrangement. Nothing at all had been paid towards maintenance for almost four years, and the arrears were increasing at a rate of some R7k every month.
In those circumstances the Court was satisfied that sequestration would indeed be to the advantage of the husband’s creditors.
The Court’s discretion
Even after you have proved that you have a “liquidated” (agreed or easily-established amount) claim of at least R100, plus insolvency and advantage to creditors as above, the court can still refuse to order sequestration. In this regard it has a wide discretion “to be exercised judicially taking into account all the facts as well as the general history and circumstances of the case”.
Finding there to be “no reasons or circumstances to disentitle her of this order”, the Court held for the mother and sequestrated the defaulting husband’s estate.
October 24, 2018
“Retirement at sixty-five is ridiculous. When I was sixty-five I still had pimples” (Comedian George Burns)
Record numbers of Baby Boomers are now reaching their 60s, and if you are an employer in any size of business (from the smallest family-owned enterprise to the largest corporate), make sure now that you have a policy in place to handle the thorny question of compulsory retirement.
This is vital – sooner or later you are going to have an employee turning 55 or 60 or 65, and if you think you can just say “Happy Birthday Kim, time for you to retire, see you around” you are in for big trouble.
So what’s the legally required retirement age?
The problem is that nothing in our law imposes a standard retirement age on employees. So trying to force someone to retire at an age that you unilaterally choose (no matter how much you may think that 65 is the universally-accepted gold standard for being put out to pasture) opens you up to a claim for ‘age discrimination’. And that would amount to an automatically unfair dismissal, for which our courts will make you pay dearly.
What our law does say is that “a dismissal based on age is fair if the employee has reached the normal or agreed retirement age for persons employed in that capacity” (our emphasis).
Let’s look at each of those options –
- “Agreed”: Clearly your best course of action is to have a written agreement with every employee specifying a compulsory retirement date. Ideally have such a clause in every new employment contract, and if any existing contracts have no such clause, negotiate one now (it’s essential to do this bilaterally not unilaterally – see case below).
- “Normal”: You can always try to convince a court that you have, through past practice in your business, established a “normal” retirement age. You will have to prove that you have consistently applied this age in previous retirement situations and that the employee in question was aware of it. Far safer of course is to have in place a formal “retirement policy”.
Whatever you do, don’t act unilaterally
A recent Labour Court case shows how dangerous it can be to try to alter any term of employment without negotiating and agreeing it with your employees –
- An employee’s employment contract made no direct mention of a compulsory or automatic retirement age, but his employer’s ‘Human Resources Policy and Procedure Manual’, which was incorporated into and formed part of his contract, stipulated a retirement age of 65.
- This was reduced to 60 when the Manual was replaced by a “Terms and Conditions of Employment” policy. The new policy excluded employees “expressly entitled to retire at 65 in terms of their individual contracts of employment”.
- The employee’s services were terminated when he turned 60 and he approached the Labour Court for assistance.
- The Court held that the employer is “not permitted to unilaterally amend terms and conditions contractually agreed to” and was therefore in breach of contract. The employer must now reinstate the employee retrospectively to the date of termination, his compulsory retirement age being confirmed at 65.
What to do when retirement age is reached
Preferably your employment contracts should specify an agreed procedure to be followed on retirement date, but in any event don’t let the date just float past. Rather, if you agree on an extension period, have your lawyer draw up an amended employment contract to avoid any uncertainty or dispute.
Employees – know your rights
Age discrimination is just one form of automatically unfair discrimination prohibited by law. Stand up for your rights if you think you are being discriminated against, directly or indirectly, “on any arbitrary ground, including, but not limited to race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status or family responsibility.”