Retirement Age

I have been asked the following question this morning:

"Can I be assisted on this matter, company policy states that the retirement age is 60 years with no extensions. Some years back employees were transferred to us (section 197 LRA) of which they still use their own pension fund which 65 years is the retirement age. The majority of employees are over 60 years of age and no longer productive. Any suggestions on how to retire them?"

Section 197(2)(a) of the LRA reads as follows: "If a business, trade or undertaking is transferred in the circumstances referred to in subsection (1)(a), unless otherwise agreed, all the rights and obligations between the old employer and each employee at the time of the transfer continue in force as if they were rights and obligations between the new employer and each employee and, anything done before the transfer by or in relation to the old employer will be considered to have been done by or in relation to the new employer."

The employer in question is facing the following problem.

Under the old regime (employer) the employees were used to the retirement age being 65. Should the new employer now decide to reduce the retirement age to 60 years of age, such variation of the employment contract will be regarded as a unilateral amendment of the employment contract.

The LRA allows employers to forcibly retire employees who have reached the "normal" retirement age, but fails to explain what constitutes normal retirement age.

Therefore, employers and employees need to look to case law for more detailed guidance and what would be fair in specific circumstances.

The employer's own rules and terms and conditions of employment can, within limits, play a significant role.

For example, in Rubin Sportswear v Sactwu and others, the employer took over a business and then introduced a rule changing the age at which employees were to take retirement.

The Labour Appeal Court found that the word "normal" means "the way things are normally done" and that the employer could not unilaterally change what was normal.

It is therefore imperative that employers have their rules reviewed in line with the latest interpretations of the courts.

In most circumstances, should any of these employees (60 years or older) then resign because they are not satisfied with such an amendment, the CCMA may find that the particular employees have been dismissed in terms of the provisions of Section 186. It will necessarily follow that such dismissal will be regarded as unfair, and the employer will end up re-instating these employees.

However, it is very difficult to say whether the new employer may find itself in the same detrimental position as described above. Firstly, it will depend on the terms and conditions of the existing employment contract. Then it will depend on the terms and conditions of the employment contract between the old employer and the relevant employees. An lastly, consideration will have to be given to the terms and conditions of the sales agreement between the old employer and the new employer.

Legal advice and assistance should be obtained to answer on the merits of each individual case..

It is advisable that the new employer commences a consultation process regarding early retirement and the official change of the retirement age. It allows the employer and the relevant employees to engage in a consultation process, which should in the end, be to the advantage of the employer. And yes, allow representatives of the relevant pension funds to address the relevant employees on the benefits of early retirement, if any. I will not even venture an opinion on this particular aspect, as I am not qualified and do not have the necessary knowledge on this topic.

Once the employees have accepted that they will benefit from early retirement, and they agree to accept early retirement, then the new employer may proceed to retire them.

Internet usage by employees!

In the present day, nearly all businesses have access to the internet. Employees are employed in certain positions to perform certain tasks. Generally, most employees have access to the internet, albeit to send and to receive e-mails on behalf of the employer.

During the past few months, our office have receive numerous enquiries from employers who seem to be experiencing difficulty with employees surfing the internet and making use of the employer’s e-mail facility for correspondence with family and friends. On the odd occasion we have also received enquiries from employees, demanding to know what action they can take against an employer who has read their private e-mails and has thus "violated my right to privacy."

So what then is the position with regard to employees making use of the internet facilities of the employer?

Before we can actually answer this question, we have to consider the possible negatives consequences of employees making use of the internet facilities of the employer.

Firstly, have a look at what employees can do, and probably are doing, with company time for which they are being paid, and also what are they doing with the employers e-mail facilities which are provided to them for business purposes?

Employees can be wasting the employers' time simply "surfing the Net", playing games on the internet, either with themselves or with other employees, they could be wasting company time by going into chat rooms, they might also be running their own little sideline business by using the employers' facilities.

Then there is the other more serious side, such as downloading or distribution of pornographic material, other undesirable material which may be political or racist in content , distributing dirty jokes, or even giving away trade secrets to a competitor for personal gain. They might even be very quietly e-mailing the employers' customer data base, pricing structures and so on to their own private e-mail addresses, having the intention of later resigning and starting a business in opposition to the employer.

These are only some of the reasons why the employer should have full and total control over his electronic communications equipment, which includes telephone and fax facilities.

Unfortunately, there is still not a large amount of case law existing on employees misuse of the employer's facilities in this respect.

Probably the most well-known case is a that of Jacqueline Bamford and four others who were employed by Energizer (SA) Ltd, and who were dismissed in October 2000 on grounds of having repeatedly violated company policy and procedure regarding the use of the employer's electronic mail system, using in the employer's facilities for receiving and for distributing pornographic material and jokes, and for violating company procedures.

The employees involved in this case maintain that the employer did not have any rules in place in respect of the alleged e-mail abuse, they maintained that they did not send chain letters over the system, and they maintained further that there was inconsistency on the part of the employer in the application of discipline, and of course they maintained that the employer had violated their right to privacy in intercepting their private e-mails.

This case was reported on by Tony Healy in the Star Newspaper workplace supplement on October 10th, 2001.

It should be noted that the arbitrator concluded that individuals do not have an automatic right to utilise the employer's facilities for the purpose of personal and private communications, and then not expect to their employer to read these communications during the course of his monitoring the use of his equipment.

Employees should be made to understand, if they do not already understand, that the internet is public domain, and no employee is entitled to utilise his employer's business equipment, which is provided to the employee for business purposes, to further his own personal and private interests.

Every employer has the right to insist that are the resources with which he provides his employees are to be used strictly and solely for business purposes, and that the personal or private use thereof is strictly forbidden.

Employees must also understand that they should never use the internet for the transmission of personal and private communications if they do not want outside parties to be privy to those communications, and perhaps even more importantly, employees must be made to understand that upon entering the employer's premises, a large part of their "right to privacy" is forfeited whilst they are under the direction and control of the employer.

The first understanding that employees must have is that upon entering the employer’s premises, the employee immediately comes under the control and direction of the employer.

The employee is no longer in a position to do as he/she pleases, and one consequence of this is that the employee does not have an exclusive “right to privacy”, and especially in terms of using the employer’s resources and equipment.

The employee enters the premises in terms of a contractual arrangement, and then only with the permission of the employer.The employee is then expected to embark on executing his agreed duties in terms of any contractual arrangement and applicable job description, whether written or verbal.

It is advisable that the employer make it a condition of employment, contained in the employment contract (as opposed to just a normal company rule or regulation in the employee handbook) that private use of the company electronic communications facilities, including the internet, e-mail, fax and telephone, is prohibited. It should be further stated in the employment contract that should the employee breach this clause, disciplinary action will follow which may lead to dismissal.

The moral of the story is - Private use is prohibited.

Some may argue that this is harsh. Others may argue that such a rule is impossible to implement, and that employees will use the facilities – and particularly the e-mail, for private use.

But if the employer wishes to ensure that his employees are being productive, are not wasting time valuable company time that the employee is being paid for, that employees are complying with terms and conditions of employment, then the employer must have rules and regulations in place, and he must embody prohibitive clauses in the employment contact, and above all, he must monitor the staff usage of the equipment and resources that are provided for business purposes.

The Regulation of Interception of Communications and Provision of Communication-related Information Act, 2002, does in fact grant permission to certain persons to intercept indirect communications under certain circumstances.

The main issues around whether or not the employer can intercept (read, download, etc ) employees e-mails are clarified in the Regulation of Interception of Communications and provision of Communication-related information Act, 2002, (the Act).

If an employer provides resources for business purposes, then he is entitled to prohibit private use of those resources.

An employer is entitled to expect his employees to come to work to carry out their contractual duties – not to attend to private affairs.

The Act states, in Chapter 2, Part1 section 5 , that any person other than a law enforcement officer, may intercept any communication if one of the parties to the communication has given prior consent in writing to such interception.

The first thing then that the employer needs to do is to include a clause in the employment contract to the effect all electronic communications equipment is provided by the employer for business purposes, and that private use thereof is prohibited.

The second thing is that the employer must include a clause in the employment contract, stating that , in accepting employment with (name of Company), the employee agrees that the employer will from time to time intercept all e-mails communications, that are sent or received by the employee.

The Act also makes the following provision : (Chapter 2 , Part1 section 6 sub-paragraph 1)

“Any person may, in the course of carrying on any business, intercept any indirect communication (e-mail) :

a) by means of which a transaction is entered into in the course of that business.

b) Which otherwise relates to that business

c) Which otherwise take place in the course of the carrying on of that business in the course of its transmission over a telecommunications system.

The Act states further (sub-paragraph 2) that a person may intercept an indirect communication (e-mail)

d) in order to establish the existence of facts

e) for purposes of investigating or detecting the unauthorized use of that telecommunications system

The above provisions – from a) to e) are the reason why the employer stipulates that all electronic communications equipment is provided for business purposes only, and that private use is prohibited.

and includes further

a) if the telecommunications system concerned is provided for use wholly or partly in connection with that business

b) if the system controller has made all reasonable efforts to inform in advance a person who intends to use the telecommunications system concerned, that indirect communications transmitted by means thereof may be intercepted or if such indirect communication is intercepted with the express or implied consent of the person who uses that telecommunications system.

The above provisions cover the employer in that the employee has been informed in the employment contract.

To summarize, the employer is entitled to stipulate (and indeed should stipulate) in the employment contract that all electronic communications equipment is provided for business use only and that private use is prohibited, further that interception of communications shall take place from time to time , and that any breach of these requirements shall result in disciplinary action which may lead to dismissal.