The recent case of A Bookkeeper v A Retail Business 1 addressed the issue of retirement and age discrimination under the Employment Equality Acts 1998 – 2015 (the “Acts”).

Background

The claimant’s employment was terminated on her 66th birthday. The claimant had not been provided with a written contract of employment and so there was no contractual provision requiring retirement at any particular age. There was also no custom and practice in place in relation to retirement at age 66.

There had been a number of discussions between the claimant and her employer dating back to August 2015 during which the employer had expressed the view that she would retire at age 66. The claimant made it clear that there was no contractual provision requiring her to retire at age 66 and that she wished to continue working.

The claimant relied on Donnellan v the Minister for Justice, Equality and Law Reform 2 in which it was held that termination of an employee’s employment solely on the basis of reaching a particular age constituted discrimination contrary to the Acts and that it was necessary to objectively justify the requirement that an employee retire.

The employer relied on the fact that the claimant’s pension provided that a benefit was payable at 65 and submitted that it was traditional for an employee to retire at 65 or 66.

Decision

The Adjudication Officer found the employer’s attitude to retirement to be “vague, anachronistic and unlawful” and stated that the employer had essentially pleaded ignorance of the law. The Adjudication Officer found in favour of the claimant and awarded €12,000 under the Acts which equated to approximately nine months’ of the claimant’s salary.

There is no general compulsory retirement age in Ireland. An employer can provide for a contractual retirement age, subject to the requirement of objective justification (see below).

Where the retirement age is not provided for under the contract of employment, employees are generally 3 free to work beyond the age of 65. The fact that a pension benefit might be payable on the attainment of a particular age does not mean that the employee is required to retire at that age.

Even where a retirement age is provided for in the contract of employment, the Acts now 4 require that employers must objectively justify mandatory retirement ages. The Acts provide that:

  • The retirement age must be objectively and reasonably justified by a legitimate aim; and
  • The means of achieving that aim must be appropriate and necessary.

Some of the reasons which have been accepted as objective justifications include succession planning, intergenerational fairness (giving younger staff the opportunity to move through the ranks) and health and safety.

This is one of many such successful cases of age discrimination in recent years. We anticipate that it will continue to be a highly litigated area for the foreseeable future, as many employers are still relying on a historic retirement age provided for in employment contracts, or in custom and practice, without there being any legitimate objective basis to justify a particular age as a retirement age.