The Workplace Relations Commission has awarded a legal secretary with 40 years’ service €24,000 following a finding that the decision to retire the employee at 67 was discriminatory.
The Complainant worked in a local solicitor’s firm for 40 years before the practice was taken over by the Respondent solicitor. The Complainant’s employment transferred to the Respondent solicitor by operation of the Transfer of Undertakings legislation.
Shortly after her 67th birthday, the Complainant received a letter from the Respondent solicitor informing her that she had been dismissed. The letter stated, amongst other things, that “We all have to retire at some stage” and made no mention of the reason for her dismissal other than her age.
The Complainant challenged her dismissal on the grounds that there was no contractual retirement age in place and therefore the employer did not have the right to terminate her employment.
The Respondent argued that they had presumed that the Complainant would retire at the age of 65 as this was the normal retirement age for many industries but that they allowed her to continue working until she was entitled to her state pension and subsequent to that, compulsorily retired her.
The Respondent also argued that the Complainant’s work was sub-standard and had a detrimental effect on the business. They argued that, due to the Complainant’s age, she was unable to upskill sufficiently in order to effectively and efficiently utilise the IT package which the Respondent had invested in. However there was no reference to performance in the dismissal letter.
The AO held that the Complainant was dismissed, not as a result of poor performance, but rather by virtue of her age. She went on to say that:
“There are 70 and 80-year olds within the labour force, who are more productive, able and capable of change than some 20-year olds. Terminating someone’s employment, on the basis of age, is discriminatory which, unless it is objectively justified, is unlawful”.
The AO awarded the Complainant €24,000 for the discriminatory dismissal, €840 for not having being provided with written terms and conditions of employment and €840 for accrued but unpaid holiday pay.
In order to retire an employee, an employer must be in a position to meet a two part test. Firstly, a contractual retirement age must exist. Ideally, this should be included in a contract of employment or a staff handbook. Secondly, the contractual retirement age must be justified by reference to an objective aim such as succession planning.
This case was particularly clear as the employer was not in a position to get over the first hurdle. The Complainant did not have a contract of employment. Furthermore, the Respondent was unable to prove that the Complainant had been provided with the staff handbook which did refer to a retirement age of 65.
In the circumstances, the second test of “objective justification” was not relevant. Nonetheless, the AO did consider the point. Whilst the AO pointed out that there were a number of issues which could have been put forward as objective justification the Respondent was unable to rely on objective justification at the hearing as no objective justification was provided at the time of the dismissal. The Respondent could not argue that that the employee was dismissed for performance when they expressly said the reason for dismissal was her age. The AO noted that while the Respondent did make some inference to succession planning in an email to the Complainant which could have constituted as objective justification, the Respondent failed to give any evidence on this point at hearing.
Claims of age discrimination following forced retirement are becoming increasingly common and can be costly to an employer. This case highlights the need for employers to have a retirement age in place which is fixed and which employees are aware of. Further, employers should seriously consider their objective justification and be able to provide evidence that objective justification was considered and formulated when setting the retirement age rather than being devised at the hearing of the claim. One way of doing this is to introduce a retirement policy setting out the objective justification for the retirement age which can later be relied upon in the event of a claim.