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Last updated July 2017

This chapter explains an employee’s rights when they approach retirement age and how you can assist an employee to transition into voluntary retirement.

What is retirement?

Retirement is a form of termination of employment. In the past, it was generally accepted that employees must retire at a particular age, e.g. 65. Today, Australia has no compulsory retirement age.

Important: Generally, retirement is a voluntary kind of resignation. However, in some cases retirement can be forced on the employee by a misguided employer or poor health.

Can you force an employee to retire?

Caution: Retirement is a voluntary resignation. You can never force an employee to retire.

If you force an employee to retire, you will face legal exposure to a discrimination or adverse action complaint under:

  • the general protections provisions of Fair Work Act 2009 (Cth) (FW Act);
  • the Age Discrimination Act 2004 (Cth); and
  • state and territory anti-discrimination legislation.

Case Law: Talbot v Sperling Tourism & Investments (2011)

In Talbot v Sperling Tourism & Investments (2011), an employer wrote to a casual driver/guide to indicate he would not get further employment because while his work had “been highly valued … driving/guiding up to 12-hour shifts to/from the Blue Mtns in all weathers and with a bus full of sometimes difficult people along with city pickups and drop-offs in heavy traffic is not at all easy. Furthermore keeping to scheduled pick-up times and simply physically climbing into/out of our 4WD buses is not easy. In good faith and recognising you are now aged in your early 70s, what I suggest is that it’s time to step back from your driver/guide work.”

The employer claimed the employee was incapable of delivering a tour to the performance standard required, because he had crashed a bus and there had been a number of complaints about his tours.

However, the Tribunal ruled the employee was treated less favourably than other drivers in that he was restricted to driving half-day city tours, when other drivers were allowed to conduct full-day tours. The employer was not seriously dissatisfied with the employee on the basis of his performance. Rather, the dismissal was based on the employer’s perception that the employee was getting older and as a result, losing the capacity to carry out his work. The employer had therefore engaged in age discrimination.