The Employment Equality (Abolition of Mandatory Retirement Age) Bill 2016 was recently before the Oireachtas Justice Committee. The bill proposes to abolish mandatory retirement ages in Ireland.
In the private sector, there is no general statutory retirement age. Retirement ages are dependent on contractual agreements, with a lot of policies referencing 65 as the age of retirement. Since the Department of Social Protection increased the state pension age from 65 to 66 in January 2014, we have seen an increase in employees requesting to work beyond 65. The public sector, on the other hand, is quite different. Retirement ages are dependent on when the person became a public servant.
The Employment Equality Act prohibits discrimination on the grounds of age. However, section 34(4) states “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”. The number of discrimination claims on the grounds of age, due to enforced retirement, brought forward to Tribunal have risen over the last couple of years. Employers have not been able to safely rely on section 34(4) of the Employment Equality Act as a defence as they must now have an objective justification for the retirement policy.
Since the enactment of the Equality (Miscellaneous Provisions) Act 2015, it is not sufficient for an employer to simply show that they have a retirement policy in place, they must also be able to objectively justify the need for the policy by a legitimate aim. The test for Objective Justification requires that:
- The retirement policy is in pursuit of a legitimate objective;
- The means used to achieve the objective are appropriate; and
- The means used to achieve the objective are necessary and proportionate.
Whether or not an employer can objectively justify a retirement age policy is very much on a case-by-case basis that is dependent on the type of role that the employee is employed to carry out.
Examples of Justifications
Following a review of recent case law, the following have been proven to be objectively justified reasons for a company to have a retirement policy in place;
- Health & Safety and Creating Promotional Opportunities – In Paul Doyle v ESB International Limited, the Equality Tribunal accepted that the mandatory retirement age of 65 across all ESB employees to ensure the health and safety of those working with electricity, and to ensure cohesion amongst all employees, regardless of whether they worked with electricity or not, was a legitimate objective that was reasonable and proportionate. The Equality Tribunal accepted the company’s argument that compulsory retirement was necessary to offer career paths to employees, ensuring “retention, motivation and dynamism” amongst the employees.
- Creating Promotional Opportunities – In the European case of Felix Palacios de la Villa v Cortefiel Servicios SA [Case C-411/05], the Court of Justice of the European Union stated that the Spanish national retirement age of 65 was justified in that its aim was to create opportunities in the Spanish labour market for those looking for work and to encourage the recruitment and promotion of young people.
- Balanced Age Structure and Desire to Avoid Competency Processes and Ensure Quality of Services have also proven to be objectively justified.
Future of Retirement Ages?
The future of retirement ages is unknown, the abolition of retirement ages is a possibility based on the bill that is before Committee. However, at present, employers must ensure that they have a clear retirement policy in place that can be objectively justified by legitimate business aims.
If you have any questions in relation to retirement please contact our advice line on 01 886 0350.