Post-Retirement Fixed Term Contracts

    

This decision reinforces the legal principle that employees lose their right to permanent employment upon reaching retirement age, as stipulated in the Minimum Retirement Age Act 2012.

    

The plaintiff, a plant manager, retired upon reaching the statutory retirement age of 60 but was rehired on a fixed-term contract to train his successor. This contract was extended four times and expired on 30 September 2022. The company then decided not to extend the contract further as it had found a replacement. The plaintiff argued that the successive extensions implied permanent employment, but the court rejected this, citing precedents according to which successive extensions do not convert fixed-term contracts into permanent contracts.

      

The court found the fixed-term contract after retirement to be genuine based on several factors:

    

Employers must clearly state the temporary nature of fixed-term contracts to avoid disputes. Continuous extensions should not be misunderstood as permanent employment. Employees should understand that post-retirement contracts are discretionary and do not offer tenure security, even if they are extended multiple times. Employers retain the right to terminate fixed-term contracts once their purpose has been fulfilled.

    

The labour court's decision underscores the importance of clear contractual terms and transparent communication in post-retirement employment arrangements. Both employers and employees must navigate these contracts with an understanding of their limitations and the applicable legal framework.​