Irish employers looking to enforce a mandatory retirement age cannot rely solely on an employee’s contract of employment even if it does stipulate a mandatory retirement age (traditionally 65). That was the consensus at a breakfast briefing for 100+ clients on the topic ‘Mandatory Retirement - A thing of the past?' in our Grand Canal office on Wednesday 19 November.
Mandatory retirement ages are still permitted in Irish law. However, Irish legislation, as well as European case law and subsequent rulings by the Workplace Relations Commission (WRC), provides that it is discriminatory to compel an employee to retire at a certain age unless there is an “objective justification” for requiring them to do so. Delegates heard that in order for a particular retirement age to be objectively justifiable it must: (i) correspond to a legitimate aim of the employer; and (ii) be appropriate and necessary.
Jeff Greene, Employment & Benefits Partner at William Fry, noted: “According to the 2018 WRC Annual Report, there were 1,449 employment equality complaints made to the WRC in 2018. 49%, so nearly one out of every two complaints, alleged age discrimination, which is a huge increase (+343%) from 2017. Age is now by far the most-claimed discriminatory ground in claims at the WRC, so Irish employers need to carefully consider on an ongoing basis what the objective justification is for any compulsory retirement age. Doing so will minimise their risk of age discrimination claims.”
Delegates also heard from Ian Devlin, Head of Pensions at William Fry, who provided an overview of pension issues that need to be considered in this context. He discussed some of the growing pressures confronting employers when it comes to helping employees prepare for the financial decisions they face regarding retirement benefits. He also provided an overview of the emerging trends and market developments in this area and how the changing pensions landscape may help create new options for employees when it comes to accessing retirement savings.
Derek Bell, Chief Operations Officer of the not-for-profit Retirement Planning Council (RPC) recommended measures that employers should consider implementing to prepare employees for retirement. Some employers have introduced ‘soft landing’ programmes that allow workers to reduce hours gradually up to retirement, while others offer flexible working options, including remote-working, part-time and flexitime roles. According to Bell, the key is to make employees comfortable about retirement as it approaches.
Jeff Greene concluded the Briefing by noting: “According to research published in the William Fry Employment Report 2019: Age in the Workplace in July 2019, 61% of those surveyed believed that they will have to work beyond the age of 66, while only 32% said they wanted to work beyond that age. With the majority of employees believing that they will have to work longer than ever before, Irish employers must therefore ensure they have the processes in place to manage and reduce the risks associated with operating a contractual retirement age”.