Can Our Organization Set a Retirement Age of 50, or Are We Legally Bound to 58?

Dear Colleagues, We wanted to know if any organization can have its own retirement policy. Can we establish a policy in our organization to retire a person at the age of 50, or are we legally bound to observe 58 as the retirement age? Please help us explore this matter.

Thanks in advance.

Regards, Santosh Sankhe

Without knowing the full facts, such as whether you are referring to workmen covered under the ID Act, whether you are covered under a specific State Shops and Establishment Act, and which category of persons the policy will relate to, it is difficult to provide an answer.

Further, please clarify whether your organization is covered by the Industrial Employment Standing Orders Act.

It completely depends upon the condition of retirement, whether it is:

1. Voluntary retirement.
2. Retirement due to any disability.

Post-Retirement Benefits in the Private Sector

For the private sector, there are two main Acts which guide and provide post-retirement benefits:

A) Employee Pension Scheme under the EPF Act.
B) ESIC for any disablement.

For voluntary retirement, you can seek guidance from the Industrial Dispute Act. Shushil is right. If you can clarify and expand your post on the subject matter.

Regards

Our company is a pharma public limited company with plants in Maharashtra and Gujarat. We are seeking information on the policies concerning workmen, staff, managers, and employees in higher categories. Is it possible for us to set the retirement age at 50 for our group companies, or are we required to adhere to the standard retirement age of 58? We hope this clarifies our inquiry.

Since your organization's offices and factories seem to be located in Mumbai and Gujarat, and these are covered under the ID Act, 1947, by virtue of Section 38-B of the Bombay Shops and Establishment Act, the provisions of the Industrial Employment Standing Orders Act and rules framed thereunder are applicable to your offices in Bombay and, as applicable, to Gujarat if it has more than 50 employees. Under Para 23 of the Schedule of Model Standing Order Rules, the retirement age shall be 58 years unless there is a settlement or award. Thus, if your organization enters into a settlement under the ID Act, then the retirement age can be 50 years.

As far as factories are concerned, the Bombay Industrial Relations Act, 1946, is applicable to certain categories of employees. Under Chapter VII, it deals with model standing orders. Para 8 of Schedule I deals with the retirement age. Thus, the settlement arrived at as per the Act, even regarding retirement age, will be applicable. As far as non-workmen or employees under the Bombay Industrial Relations Act category are concerned, the management can frame a company policy of retirement at age 50.

Regards,