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[2015] ZALCCT 8
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Truter v Carecross Health (Pty) Ltd (C956/2013) [2015] ZALCCT 8 (23 January 2015)
REPUBLIC
OF SOUTH AFRICA
IN
THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN
JUDGMENT
Not
Reportable
C956/2013
DATE:
23 JANUARY 2015
In
the matter between:
HILARY
TRUTER
...............................................................
Applicant
And
CARECROSS
HEALTH (PTY) LTD
.......................
First
Respondent
Date heard: 4
and 5 September 2014
Delivered: 23
January 2014
JUDGMENT
RABKIN-NAICKER
J
[1] The applicant
has referred a claim to this court in which she seeks to have her
dismissal considered as automatically unfair,
in that it was based on
her age. She was employed by the respondent company up until 31
August 2013 when her services were terminated
on the basis that she
had reached 65 years of age.
[2] The applicant
was employed on 1 October 1998. Her remuneration at the time of her
dismissal was R 34,319.15 a month. Her dismissal
was on the 31 August
2013, while her 65
th
birthday was on the 5 June 2013. The
respondent company relies on a contention that 65 is the company’s
“normal”
retirement age as is contemplated in section 187
(2) (b) of the LRA. The common cause facts of the events leading up
to the dismissal
are contained in the pre-trial minute as follows:
2.1
On 22 May 2013, the applicant was presented with a letter recording
that she would be placed on retirement. It was also recorded
that the
applicant would remain in the employ of the respondent until the end
of December 2013, provided she sign a fixed term
contract terminating
on 31 December 2013. The applicant objected to this and consulted an
attorney.
2.2
Following discussions between the applicant and the HR manager, Rene
Niske (Niske) on 31 May 2013, the applicant submitted a
letter to the
CEO of the company, Dr Nauta (Nauta), setting out her objections and
why she would resist any attempt to place on
her retirement. Pursuant
to these objections, she was not placed on retirement until the
matter could first be consulted on. She
then went on leave from the
3
rd
to 14 June 2013 and was due to return to work on 18
June 2013.
2.3
A meeting was then held between the applicant, Niske and Nauta on the
26 June 2013. Following on this meeting labour consultants
of the
employer, Labour Net, facilitated two meetings with the applicant in
July 2013 to try and convince her to accept the situation
and to
conclude a fixed term contract, which would guarantee her employment
to 31 December 2013. The applicant remained steadfast
in her refusal
to agree to this. She maintained her position that she should be
allowed to work until she was 70 years of age.
2.4
On 30 July 2013 the applicant was given a letter setting out the
preceding events and which recorded that she would be placed
on
compulsory retirement from 31 August 2013.
[3] In her
statement of claim the applicant submits that as far she is aware,
she was the first employee that had been retired by
the company at 65
years of age. She contended further that thus far she was aware only
one other person had been retired by the
respondent, one Ethel
Seidel, (Seidel) whose contract of employment was terminated
unilaterally by the respondent when she was
70 years of age. Further,
she had been advised that the respondent’s policy on
retirement, which was incorporated in recent
contracts of employment
(but not her own) reads that: “once the employee reaches the
age of 65, she may be placed on retirement,
at the discretion of the
employer.”
[4] The company’s
case as set out in the statement of defence is that on 1 March 2006,
the respondent’s board of directors
adopted a resolution with
regard to retirement of employees reading as follows: “the
company shall institute a retirement
policy. The policy will read as
follows: an employee shall retire from the service of the company at
the end of the calendar year
in which the employee reaches the
retirement age of 65 years. Implementation of these conditions of
service will take effect on
1 March 2006.”
[5] The company’s
case is that Seidel was already over 65, but on advice that the
implementation of the policy could not be
unilaterally applied to
her, the company consulted with her individually with regard to
retirement. This led to her concluding
an actual agreement – a
written addendum to her contract of employment on 12 and 18 July
2006. The addendum recorded that
an employee shall retire at the age
of 65, but the respondent could, at its sole discretion allow an
employee to work beyond that
age. Seidel recorded in her own
handwritten manuscript the following on this addendum: “I’m
signing this on condition
that this will be applied to all the
employees, otherwise I consider this as discriminatory.”
[6] This matter
stands to be decided with regard to section 187 of the Labour
Relations Act, which
inter alia
provides as follows:
“
(1)
A dismissal is automatically unfair if the employer, in dismissing
the employee, acts contrary to section 5 or, if the reason
for the
dismissal is-
…………………………………………………………
..
(f)
that the employer unfairly discriminated against an employee,
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;
………………………………………………………………………………
(2)
Despite subsection (1) (f)-
(a)
a dismissal may be fair if the reason for dismissal is based on an
inherent requirement of the particular job;
(b)
a dismissal based on age is fair if the employee has reached the
normal or agreed retirement age for persons employed in that
capacity.”
[7] It is evident
on the respondents own pleadings that there was no agreement between
the applicant and the company as to her retirement
date. The
witnesses for the company, as well as in submissions filed on behalf
of the company, made statements that 65 is the normal
retirement age
in the ‘industry’ in which the applicant worked as a
nursing manager. However I note that this was not
pleaded by the
company.
[8] The evidence
of the applicant was that her contract which was signed on 26
November 1998 did not contain a reference to a retirement
age. The
employment contract contained a non-variation clause. As for the
resolution passed by the board on 1 March 2006, she had
never had
sight of it until 28 August 2014, although she was aware that a
resolution existed in 2006 when Ethel Seidel was 70 and
was retired.
She testified that in December 2012, her direct supervisor, Miss
Palmer (Palmer) asked her to stay for another five
years and after
that she had moved to Cape Town from Gordons Bay to be nearer work in
March 2013. She was totally shocked to receive
notification that she
had to retire. She had never seen a company policy regarding
retirement and was not aware of one in any event.
She was not a
member of the employer’s Provident fund in which a normal
retirement’ date might have been referred to.
[9] The applicant
stated that there was not a normal retirement age in her view, and
that the only person she knew who had retired
in the company, had
done so at 70 years of age. She testified that she was told not to
work her notice period and to pack up and
leave within two hours. She
had worked 15 years with the company and felt terrible to be told to
pack up in this way Since her
dismissal, she had been working at a
frail care centre doing 12 hour shifts, 15 days a month and getting a
third of what she earned
with the respondent. She wanted to be
reinstated in the employment of the respondent company.
[10] Under cross
examination, the applicant stated that if she had been prepared and
had the knowledge of the fact that she would
be retired at 65 she
would have made different decisions and at least understood that she
was going to have to retire and prepared
herself for it.
[11] The HR
manager Niska testified that when she was looking at other
administrative records, it ‘dawned’ on her that
the
applicant was turning 65 and she had then written the letter
informing her that she would be retiring. She did recall having
had
discussions about the cost of the applicant traveling in from
Gordon’s Bay with her, but not with her retirement in mind.
It
wasn’t in the forefront of her mind as to how old the applicant
was. She stated that the move to Cape Town was a personal
decision
made by the applicant after her divorce, based on financial
considerations. She testified that she had joined the company
six
years ago and that it was common knowledge that the retirement age is
65. When new employment contracts were drafted that was
incorporated
into them. She stated that she was aware 65 is the normal retirement
date in the nursing industry.
[12] Under cross
examination Niske was not sure whether her contract of employment
contained the retirement age of 65. She conceded
that she knew the
applicant very well since she had been young, but did not have a
specific idea of her age, but she knew she was
over 60. She had never
revisited the company’s policy document implemented in 2009 to
see whether the resolution regarding
the 65 age retirement was
contained in it. She confirmed that the knowledge of the fact that
the applicant was reaching 65 dawned
on her out of the blue, as a
result of discussions a senior manager and herself were having about
the staff complement. This was
a month or two before the letter she
drafted in May.
[13] She
confirmed that she was not able to give an example of a person who
had retired at 65 because there was nobody of that age
before the
applicant. She conceded that it would appear that had been no normal
retirement age before the board of directors’
decision. It was
put to her that the decision of the board was never formally
discussed with the applicant. She replied that employment
contracts
had been amended after 2006. She stated that it was common knowledge
that 65 was the retirement age. She had enquired
about this and was
told it was had been a board resolution, which unfortunately was not
in the policy manual. She agreed that the
clauses dealing with the
retirement age in employment contracts subsequent to the board
resolution, was not in applicant’s
contract. She had only seen
the resolution dealing with retirement and that it referred to
retirement at the “end of the
calendar year”, after the
applicant had left the employ of the respondent because the financial
director had been unable
to locate a copy of the resolution.
[14] Niske
conceded that the knowledge she had about the retirement policy was
from the board resolution and the clause in the new
employment
contracts. It was put to her that as HR manager, she was grossly
negligent in not having known of the resolution or
having had sight
of it. She denied this and insisted that the company does have a
normal retirement age. She stated that the board
resolution was the
policy on this and she knew about the resolution and acted on it,
although she couldn’t find the resolution
at the time. It was
put to her that by applying the board resolution to the applicant
amounted to a change to her terms and conditions
of her employment.
Niske stated she had no comment.
[15] The CEO,
Nauta, testified
inter alia
that the company had eventually
taken a resolution on retirement and that 65 was accepted as the
normal retirement date. As for
the employee that had retired 70, he
did not really know on which principles this was based and couldn’t
remember. He didn’t
know which document was used to base her
retirement on as he was not involved. He was asked why the applicant
was retired at 65
and stated that he wasn’t directly involved,
but believed that his executive did it in the right way for the right
reasons.
[16] He testified
that he agreed there was no retirement age up until March 2006 and he
didn’t know why Ethel was allowed
to work until she was 70. He
did not know why the resolution of the board did not find its way
into the policy manual and stated
that: “my style is very
laissez-faire.” He didn’t know whether anyone had tried
to negotiate a change to applicants
contract but it was common
knowledge in the building that 65 was the retirement age. He didn’t
know whether all new contracts
contain this clause. He conceded that
the company should have communicated better when the board resolution
was passed. He had
no idea that the applicant had moved from Gordons
Bay in March 2013 to be close to work. He did not know why his HR
manager had
never seen the resolution at the time of the retirement
of the applicant. He did not know whether the resolution of the board
was
still applicable but assumed that it still stands. He agreed that
it was incorrect that Applicant was not given to the end of the
calendar year to retire in terms of the resolution. He knew of no
issues about her work militating her leaving the company and
stated
that the applicant did not report to him.
[17] Nauta
conceded that as far as retirement age is concerned, he had a
discretion in terms of clause 20 of the policy addendum
to new
contracts, which reads “once the employee reaches the age of
65, she may be placed on retirement, at the discretion
of the
employer.” He stated he would be hard pressed to override his
senior people. He stated that he couldn’t, for
nice and
sentimental reasons, do something not in the interests of the
company. When it was put to him that the retirement was
sprung on the
applicant two weeks before she had to leave, he stated that he
believed the company had stuck as close as possible
to doing the
right thing.
[18] When asked
whether there was any reason whatsoever that the applicant couldn’t
come back to work for the company, if
the court should find this is a
suitable remedy, he stated that “when you are 65 you get slower
and their capacity to be
optimal goes down”. He disagreed that
the retirement of the applicant constituted an automatically unfair
dismissal, although
he agreed that there was a discrepancy regarding
the end of the calendar year.
[19] The final
witness for the company was applicant’s supervisor Palma who
testified that she manages the disease management
section and was a
trained nurse. She confirmed the retirement age is 65 and said she
did not remember, as had been stated by the
applicant in one of the
meetings held with the company, that she had asked her to stay
another five years. In any event, she said
she did not have the
authority to do so. On the day that the applicant left the company,
she was there and a meeting was held with
the HR Department. She
stated that she went down to help the applicant to pack up her
belongings so that she could leave the company
that day. She was
aware that she had relocated in March 2013 and it was put to
her that she would never have moved to Cape
Town had she been aware
that she was going to retire. Palmer said that she had no comment on
this.
Evaluation
[20] In
Rubin
Sportswear v SA Clothing & Textile Workers Union & others
[1]
the Labour Appeal Court considered the meaning to be attributed to
“normal retirement age’ in terms of section 187
of the
LRA. The court per Zondo JP held as follows:
“
[22]
In my view a certain age cannot suddenly become a normal retirement
age for employees or for a certain category of employees
simply
because the employer wakes up one morning and decides that he wants a
certain age as the normal retirement age for his employees
or for a
certain category of his employees. He can put a proposal to his
employees on what should be the retirement age and, if
they agree,
then there will be an agreed retirement age in that workplace
applicable to all those who have agreed to the proposal.
A
retirement age that is not an agreed retirement age becomes a normal
retirement age when employees have been retiring at that
age over a
certain long period - so long that it can be said that the norm for
employees in that workplace or for employees in
a particular category
is to retire at a particular age.
An example would be where,
without any formal agreement, employees in a particular category have
over 20 years been retiring at
a particular age without fail. The
period must be sufficiently long and the number of employees in the
particular category who
have retired at that age must be sufficiently
large to justify saying that it is a norm for employees in that
category to retire
at that age. If the period is not sufficiently
long but the number is large, it might still be that a norm has not
been established.
If the period is very long but the number of
employees in the particular category who have retired at that age is
not large enough,
it might be difficult to prove that a norm has
been established……..(my emphasis)
[24]
Section 187(1)(b) creates two bases upon which an employer can
justify the dismissal of an employee on grounds of retirement
age.
The one is an agreed retirement age, the other is normal retirement
age. Those are the only two bases. In this case 60 was
neither the
normal nor the agreed retirement age for the second and further
respondents.”
[21] It was
common cause in this matter that the resolution of the board was
never formally discussed with the applicant, and there
was no attempt
by the company to seek the applicant’s agreement to amend the
terms and conditions of employment. Furthermore,
nobody else in the
company had ever retired at the age of 65. Taking into account the
law as set out in
Rubin Sportswear
quoted above, there was no
established practice or norm of the company staff retiring at age 65.
Moreover, Seidel had worked for
the company until she was 70 years of
age.
[22] As submitted
on behalf of the applicant, the company put forward two positions
applicable to its retirement policy. The first
was a resolution in
2006, which read: “an employee shall retire from the service of
the company at the end of the calendar
year in which the employee
reaches the retirement age of 65 years.” On the evidence before
the court, this policy was not
applied in the ‘retirement’
of the applicant. Furthermore, the resolution was not publicized to
the extent that even
the HR manager of the applicant had never laid
eyes on the resolution until after the applicant left the company’s
employ.
[23] A second
position appears to be contained in clause 20 of the company’s
policy, an addendum to recent contracts of employment,
which reads
“once the employee reaches the age of 65, she may be placed on
retirement, at the discretion of the employer.”
It was
submitted on behalf of the applicant that this latter position would
not have the effect of establishing a firm or definitive
normal
retirement date. Mr De Kock submitted further that as there is no
practice of retiring employees at the age of 65, the document
containing clause 20 does not serve to establish a normal retirement
date. In addition I note that this policy was not incorporated
into
applicant’s contract of employment and she was never asked to
sign a new contract when contracts for staff were re-drafted.
[24] The disarray
in which the company’s HR policies evidently were at the time
that they decided to retire the applicant,
do not assist the
company’s case that retirement at the age of 65 was the “norm”.
My view is strengthened by
the fact that the head of HR on her own
version was only struck by the fact that the applicant was in her
65
th
year in the course of a discussion she was having
about staffing issues. Niske had never seen the policy reflected in
the resolution
taken by the board in 2006. Nor had she considered the
discrepancy between the wording of that policy and the clause
contained
in the addendum to employment contracts entered into in
more recent years. I must agree with Mr De Kock that although the
company
witnesses dealt with the question of what was in their
opinion the normal retirement age in the industry as a whole, this
was not
pleaded by the company and in any event, the question the
court has to consider is whether retirement at the age of 65 was the
“norm” at the respondent or for the category of nursing
managers into which applicant fell. General statements elicited
from
company witnesses about the industry did not suffice.
[25] The
witnesses for the company did not impress the court. In particular,
the CEO, Dr Nauta , who portrayed himself as a laissez-faire
entrepreneur who did not involve himself in the nitty-gritty of his
executives work, and was unable to give convincing evidence
in
relation to the development of policy in his company. Furthermore,
when directly asked why the applicant should not be reinstated,
his
views about what happens to persons over the age of 65 i.e. that they
‘get slower and below optimum’, stated in
generalised
terms, did not assist the company’s case or his image.
[26] Given all of
the above, I find that there was no normal date of retirement at the
company in the sense set in the
Rubin Footware
judgment.
Therefore on the evidence before me I find that, that the
termination of the applicant’s employment amounted
to unfair
discrimination based on age. The effective date of the dismissal of
the applicant was 31 August 2013. She has sought
reinstatement
effective to the date of her dismissal.
[27] Given the
attitude reflected by the CEO in respect of persons of 65 and over, I
trust that the Applicant’s reinstatement
will not be
accompanied by further infringement of her dignity. In all the
circumstances I make the following order:
Order
1.
The termination of applicant’s employment constituted an
automatically unfair dismissal in terms of section 187(1)(f) of
the
LRA;
2.
The applicant is to be reinstated into her position with full
retrospective effect to August 31 2013, within 30 days of this
order;
3.
The respondent is to pay the costs of this application.
H.
Rabkin-Naicker
Judge
of the Labour Court
Applicant:
Adv. C de Kock instructed by Baigraims Attorneys
Third
Respondent: Snyman Attorneys
[1]
(2004)
25 ILJ 1671 (LAC)