I work for an organization which comes under factory act.
The age of retirement for people upto certain executive grade is 55. Where as staff belonging to senior level is 58 Yrs. Interestingly for other units across India the age of retirement is 58 Yrs for all category of staff.
Interestingly the company retires employees at 55, where as the pension starts after the employee reaches 58 years of age. More over they make you accept that it is not retirement but 'superanuation'- Which literally means 'incapable of working due to old age.
Please advise whether it is legal to retire at the age of 55.
The staff welfare committe has already challanged the decision in the court of law. The matter is subjudice.
I'll appreciate if some input on the subject is given.
HR & Labour law Advisor
As rightly mentioned above, there is no age limit of retirement mentioned in the Factories Act. It is mentioned in the Certified Standing Orders of the Organization or in the terms of appointment or Social Security policy of the Organization. Commonly, the age of superannuation is 60 years for both - Executives and Non-executives, if not mentioned otherwise.
In every company employees have to follow the terms and conditions as prescribed under the standing orders act which may be certified or if not certified then the provisions of the Model Standing Order Act, however, one has also to follow the terms and conditions of the appointment letter and while deciding the actual age of Retirement provision of Standing Order as well as terms and condition of appointment both should be considered. It cant be compared from industry to industry in private sector industries.
The only thing I find really out of line is that retirement age is 55 and pension starts at 58. Pension should start immediately in retirement. I do not think there is any difference in law between retirement and superannuation. They both mean the same thing.
Actually, Factories Act is not stating that, an employee should be retarded after completion 55 years.
It is compleetly depend on the Terms and Condition of Service Agreement according to the nature of work.
In some kind of work Employees are advised to work up to the age of 58 years but in some kind of work Employees should not continue after completion of 55 years.
This has been following by many Organisation to get proper out put and reduce the risk.
I agree with the views expressed by Sh Raaj Gupta that the age of retirement varies from industry to industry in private sector industries, hence it can not be compared.Normally there are following three methods to fix the age of retirement:-
(i) As per the company's Policy (ii) As per terms & conditions of the Appointment/contract agreed between the parties (ii) The age as mentioned in the certified standing orders of the establishment.
Section 12-A of Industrial Employment (Standing Orders) Act, 1946 provides that if the Act is applicable to the establishment and till the time the standing orders are not certified, the Model Standing Orders shall be made applicable.The Schedule I -B has prescribed the Model standing orders on additional items applicable to all Industries,which reads as under:-
"The age of retirement or superannuation of a workman shall be as may be agreed upon between the employer and the workman under an agreement or as specified in a settlement or award which is binding on both the workman and the employer. Where there is no such agreed age, retirement or superannuation shall be on completion of  years of age by the workman".
Thus I find that the action of your company is irrational in retiring the employees at 55 years of age.The age of retirement has to be in consonance with the provisions prescribed under the Industrial Employment (Standing Orders) Act, 1946.The company is at liberty to frame different rules for senior level officers, who are not covered under the IE(SO) Act.
I think you have some misconception about "Superannuation'- which according to you means 'incapable of working due to old age.On the other hand, the superannuation is retirement on attaining the age of retirement in normal course (i.e. while being in good health).The term "Retirement " covers all cases which includes retirement prematurely due to injury and ill health.The Compulsorily retirement is made applicable to the persons because of their misconduct/ill health etc and Voluntary retirement is for reasons other than ill health etc.
Since you have mentioned that the matter is sub judice and the staff welfare committee has already challenged the decision in the court of law, they can certainly take a plea that the age of retirement can not be below what has been mentioned in the standing orders whether certified or not.
Member since Aug 2011
Whereas retirement means ceasing to be in servcie at any point of time or at any age., though such age of retirement too can be fixed under contarct or agreement. It has no relationship with any criterion of debility to be supposedly caused by a particular stage in life. . Thus an employee can be retired on grounds of incompetence in terms of company's policy even well before he reaches the age of superannuation in which case, it is called compulsory retirement. Similarly an employee can be offered an option to retire earlier than the age of superannutaion in which case it is called voluntary retirement. However you cannot compusorily superannuate him or ask him to voluntarily superannuate.Thus superannuation is an event and retirement is the consequence of happening of that event.Therefore we often hear that Suresh retired from servcie on reaching the age of superannuation.
This only a humble attempt to distinguish between retirement and sueprannuation as I understood and is only for acdemic interest.
HR & Labour law Advisor
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