Retirement Ages and Discrimination

Retirement ages in the private sector can be set out by a specific term of the employment contract, an implied term of the contract, be specified in the company policies/handbook etc. or by a custom and practice of a workplace.  

What happens though when a person’s contract states the retirement age is 65, for example, but they do not wish to retire ?.

The issue of workplace retirement in Ireland and other countries is going to grow and grow in the future in terms of legal cases. This is for many well-known reasons, but in this scenario what happens when a person doesn’t want to retire, but the employer wants them moved on ?.  

A code of practice for industrial relations for employers and employees came into being in 2017 and can help guide both employers and employees alike regarding this topic.  

This is S.I. No. 600/2017 – Industrial Relations Act 1990 (Code of Practice on Longer Working) (Declaration) Order 2017. 

The Employment Equality Acts 1998 to 2015 prohibit discrimination on nine grounds which includes age.  

So, the termination of an employee’s employment status by reason of age could expose an employer to a discrimination legal action.  

Discrimination under the Equality Act 1998 is defined as: 

‘’Discrimination shall be taken to occur where  a person is treated less favourably than another person is, has been or would be treated in a comparable situation on any of the grounds specified in subsection (2) (in this Act referred to as the ‘ discriminatory grounds ’ ).

Regarding age, this ground is specified as:

( f) that they are of different ages, but subject to subsection (3) (in this Act referred to as “ the age ground”).  

Equality (Miscellaneous Provisions) Act 2015 

This act made a number of amendments to the Equality Act 1998.  

Section 34 (4) of the 2015 Act now states as follows: 

It shall not constitute discrimination on the age ground to fix different ages for the retirement (whether voluntarily or compulsorily) of employees or any class or description of employees if—

(a) it is objectively and reasonably justified by a legitimate aim,

and

(b) the means of achieving that aim are appropriate and necessary.”.

Therefore, it is clear that compulsory retirement ages can be set by employers, however, these must be capable of objective justification both by the existence of a legitimate aim and evidence that the means of achieving that aim is appropriate and necessary. 

Examples of what constitutes a legitimate aim by an employer may include: 

  • Health and Safety (generally in more safety critical occupations); 
  • Creation of a balanced age structure in the workforce;
  • Personal and professional dignity (avoiding capability issues with older employees); or   
  • Succession planning; Motivation and dynamism through the increased prospect of promotion.

If there is no legitimate aim and it cannot be reasonably justified, an employer is open to a charge of workplace discrimination from an employee. 

Guidance for Employees who want to apply to Work Longer than the Retirement Date: 

The Industrial Relations Code of Practice on Longer Worker Order 2017 gives guidance on how to proceed in this scenario.  

An employer should notify an employee of their intention to retire him/her on the contractual retirement date within 6 – 12 months of that date. This gives the parties time to consider both of their needs. This should be in writing and the employer should follow this up with a face-to-face meeting.  

The employee then has a right to consider what they wish to do.  

If the employee wishes to apply to work longer, see the following guidance points:

  1. The employee should make such a request in writing no less than three months from the intended retirement date to be followed up with a meeting between the employer and employee. This meeting gives both the employee an opportunity to advance the case and allowing the employer to consider it. It is important that the employee is listened to and that any decision made is on fair and objective grounds.
  2. The employer’s decision should be communicated to the employee as early as practical following the meeting.
  3. Should the decision be to offer a fixed-term contract post-retirement age, the period should be specified, setting out the timeframe, and the legal grounds underpinning the new contract should be made clear (i.e. fixed-term contract). It is good practice to include a reference that the decision is made solely having regard to the case being made by the employee and does not apply universally.
  4. Where the decision is to refuse the request, the grounds for the decision should be set out and communicated in a meeting with the employee. This will help the employee to understand why the request has not been granted, and give the employee confidence that his/her case has been given serious consideration and that there are good grounds for refusing the request. The applicant should have recourse to an appeals mechanism, for example through the normal established grievance procedures in the organisation.
  5. An employee may be accompanied to a meeting by a work colleague or union representative to discuss a request to the employer to facilitate working longer and in any appeals process around same.

Disclaimer

Please be advised that the above-mentioned material is intended as an overview and as a broad out-line of the topic discussed. It should not be considered as complete and comprehensive legal advice, nor act as an appropriate substitute.

Legal advice should be sought from a solicitor prior to relying on anything in this article.  

Due care has been taken in the publication of this article and we do not accept legal liability as a result of reliance on any material covered in the above article.