The issue of retirement ages and age discrimination remains ever topical with an increasing number of cases coming before the Equality Tribunal. With the state pension age increasing in 2014 to 66 it is likely that this topic will remain firmly in the spotlight. The impending change means there is the increased possibility that people may find themselves in a situation of being obliged to retire and not being entitled to any state pension for a further twelve months. Coupled with the fact that people are generally living longer, this is likely to result in an increasing number of people wanting to work beyond their in retirement age. This will undoubtedly pose problems for employers in the future as they grapple with requests from employees to extend their date of retirement.
There is no fixed compulsory retirement age in Ireland. Certain public sectors may have a statutory retirement age but otherwise there is no overriding legislative provision setting a particular age.
Up until recently the position was that employers were able to fix a retirement age without it constituting age discrimination. The Equality Tribunal has however, in the last number of age discrimination cases before it, interpreted the Irish legislative provision allowing compulsory retirement in light of the grounding European Directive on the matter. This requires employers to objectively justify any compulsory retirement age and any such justification must be proportionate and appropriate.
The case law however is far from definitive as to what will satisfy the requirement of objective justification in each and every case. However what is clear is that justifying it from the individual needs of the business will not be accepted. Indeed the most recent case from the Tribunal (Dunican and Spain v Offaly Civil Defence Dec E2013 - 027) further reiterated this point when the Tribunal endorsed the reasoning in a prior Court of Justice of the European Union decision that a justification test cannot be directed at the circumstances only of an individual complainant but rather must be based on clear policy grounds which relate to the needs and objectives of a particular organisation, including the specific mental and physical requirements of different roles, within the organisation. An organisation must have a well thought out considered reasoning for the particular retirement age which is applicable to their business. Other accepted reasons have been succession planning i.e. the promotion of younger personnel through the business.
Tips for employers: So what can employers do to protect themselves from challenges to their retirement age clauses?
Ensure that all contracts of employment specify a retirement age;
Have an "objective justification" for this specific retirement age. The objective justification must be one which pursues a legitimate objective, such as vocational training or labour market objectives, and the means of achieving that aim must be proportionate and reasonable;
Reserve the right to vary and review the retirement age as the needs of the business evolve and develop;
Where employers receive a request from an employee to work beyond their retirement date they need to carefully consider how they respond to this. The Employment Equality Acts do not prevent offering a worker past retirement age a fixed term contract. However the difficulty with granting such requests is that it creates precedent for other employees who may request such extensions and makes it more difficult for employers to endorse their normal retirement age. Any such extension would also have to be considered from a pension's perspective and the likely increased cost of allowing this.