The Equality Tribunal has ruled that an employee whose employment was terminated on the basis of a compulsory retirement age was discriminated against on the ground on his age. The claimant was compulsorily retired at the age of 65. His original contract of employment made no reference to a retirement age and he argued that the forced retirement constituted a discriminatory dismissal on the ground of age. He claimed that the employer introduced compulsory retirement ages in 2008 as a means of letting staff go without having to make redundancy payments after it had run into financial difficulties.
The employer argued that the compulsory retirement was justified on objective grounds including cost-saving and health and safety concerns. It also argued that the claimant had been on notice of the fixed retirement age since its introduction in 2008.
The Equality Tribunal found that the claimant had established a prima facie case of a discriminatory dismissal and considered whether the compulsory retirement age could be objectively justified by a legitimate aim of the employer.
The Tribunal did not accept that there were any health and safety concerns as the employer could not produce any evidence to show why “65” was chosen as the appropriate retirement age, particularly when prior to 2008 employees had been retained in employment beyond 65.
Although it accepted that a compulsory retirement age may be objectively justified on a combination of grounds including “business-centric” factors (such as succession planning and budgetary restrictions) the Tribunal emphasised that cost considerations in themselves cannot constitute a legitimate aim.
The Tribunal decided that the employer had failed to objectively justify the compulsory retirement age. It concluded that the claimant had been discriminatorily dismissed on grounds of age and awarded him six months’ salary (€12,000) in compensation which is the equivalent of the redundancy payment he would have received had he not been forced to retire.
Whilst the setting of a compulsory retirement age in itself is not discriminatory under current Irish legislation, this is yet another decision where the Tribunal has sought to harmonise Irish law with the European Equal Treatment Directive which requires that there be an objective justification for the use of a compulsory retirement age.
This case is a useful reminder to employers that an attempt to use a compulsory retirement age solely as a cost-saving measure will not be accepted by the Tribunal. In addition, employers must be able to provide not only an objective justification for having a compulsory retirement age but also evidence as to why the particular age chosen is the appropriate cut-off point for that particular employment.