A recently published Private Member's Bill (The Employment Equality (Abolition of Mandatory Retirement Age) Bill 2016) aims to abolish compulsory retirement. Private Member Bills do not usually progress to enactment, however last week the Government indicated that it would not oppose this Bill stating that it wished to support measures aimed at facilitating fuller working lives. The Bill, if passed, will have significant implications for employers and how they manage their older employees.
Age discrimination and compulsory retirement are pressing issues for employers. Earlier this year we reported on two compulsory retirement challenges, both of which were decided in favour of the employer (click here and here to recap). The law was amended early in 2016 requiring employers to objectively justify a compulsory retirement age by a legitimate aim. The new Bill, if enacted, will abolish the setting of a retirement age.
The rationale behind the Bill is that forced retirement is age discrimination. Central to the Bill is choice and that workers should have a choice about their retirement and when that date comes. Workers will be able to decide if they want to retire immediately at 65/66 or continue working. The Bill contains exemptions for those who work in security-related employment, such as the Defence Forces, fire services and An Garda Siochana.
The socio-economic backdrop is the main driver for the Bill as there is clear evidence that people are living longer and want to remain at work. The economic driver will be addressed by making amendments to pension issues. It proposes to end the current practice of those who have to obtain jobseekers payments at 65 for one year until they are eligible for state pension at 66.
The Government has indicated that there are significant technical drafting issues with the Bill in its current format so it is likely that there will be a number of amendments. There are also serious policy and expenditure issues which will require careful consideration. We will provide further updates in relation to the progress of the Bill.