Retirement Rehire: Can Management Legally Extend a Retired Employee's Job Permanently?

Dear all,

Can anyone clarify whether, after the retirement of an employee, the management can extend their job as a permanent employee and what is the legal procedure and entitlement to benefits? If not, what is the punishable offense for the Principal Employer?

Hi, if management declares a retirement age in the employee's appointment letter, the employee should not continue as an on-roll employee after reaching the specified age. The declared age may need to be submitted to the gratuity trust, EPF, or labor department.

In the event of any accidents while working, it will impact statutory benefits. It may be preferable to proceed as a Fixed Term Contract (FTC) employee.

Management's Discretion on Employee Extensions

Management, at its discretion, can grant an extension to a permanent employee. This practice is common in both government and private companies, with each following its own set of norms. Extensions are typically granted to employees in very senior positions. The general considerations include the non-availability of an immediate replacement or successor, the retiring incumbent delivering high performance crucial for the organization, and the incumbent being in good health.

Appointment letters typically specify a retiring age, after which the employee is considered retired unless granted an extension through due process. It is important to note that an extension is not a right of the employee but rather the prerogative of the employer. However, an employee does have the option to decline the offer of an extension.

The query does not provide clarity on what specific legal action is being referred to.