Compulsory Retirement-Are You Being Forced to Call It a Day?

compulsory-retirement-ireland

Are you being pressurised to retire from your job?

Do you want to continue?

Do you feel as fresh as a spring lamb? (Don’t worry about this one if you don’t).

The good news is that there is no general compulsory retirement age in Ireland, apart from in some fairly limited industries/professions. Therefore, unless it is set out in your contract of employment, or well accepted in your workplace by custom and practice, you cannot be forced to retire, or a claim for a discriminatory dismissal-on the grounds of age-may be open to you.

Employers often confuse the retirement age set down in the company pension as being ‘the retirement age’. But the retirement age for a company pension is a completely separate matter from being forced to retire from employment.

The Employment Equality Acts

The Employment Equality Acts set down 9 grounds on which you cannot be discriminated against, and one of those grounds is age. However, the Acts also provided for certain exceptions and one of these exceptions is that it is not held to be discriminatory per se to set a retirement date for employees.

So, this allows employers to set a retirement age in the workplace, and can rely on a retirement age in the contract-if there is one stipulated. If there isn’t, then the employee may have a good claim for discrimination on the grounds of age.

Nevertheless, employees regularly challenge such dismissals and it is useful to look at how the Equality Tribunal makes its decisions in this type of case.

An EU directive, 2000/78/EC provides that any differences in treatment on the ground of age must be objectively justified and reasonable. This directive is therefore inconsistent with Ireland’s national law-the Employment Equality Acts-when it comes to discrimination on the grounds of age.

The Equality Tribunal has held that this directive has direct effect when it involves a state body as the employer.

The High Court on the other hand has held in Donnellan v Minister for Justice, Equality and Law Reform [2008] that there is no obligation to justify retirement ages under the Employment Equality Acts.

The Equality Tribunal has asked employers to objectively justify the compulsory retirement and show how it is a legitimate aim of the employer, and that the means being used to pursue that aim are proportionate and necessary.

The Labour Court

However, a recent (2013) decision of the Labour Court in Hospira v Roper and Others overturned a decision of the Equality Tribunal and decided that employers are not required to objectively justify age discrimination by way of enforced retirement. The Labour Court recognised that the exception to discrimination provided in section 34 of the Employment Equality Acts was a valid one on the grounds that it was reasonable and objectively justifiable, in the opinion of the legislators who put it on the statute books.

Conclusion

The law concerning compulsory retirement is not entirely clear or consistent with Irish employment equality legislation apparently at odds with an EU directive in this area. Furthermore, the Labour Court and Equality Tribunal appear to take slightly different approaches.

The safest approach from an employer’s perspective is to set out a retirement age in the contract of employment.

If you are an employee and are being forced to retire, you should, at a minimum, seek professional advice before ‘riding off into the sunset’.

Update January, 2016

Section 10 of the Equality (Miscellaneous Provisions) Act 2015 now provides:

Section 34 of the Act of 1998 is amended by the substitution of the following subsection for subsection (4):    
  “(4) Without prejudice to subsection (3), it shall not constitute discrimination on the age ground to fix different ages for the retirement (whether voluntarily or compulsorily) of employees or any class or description of employees if—
  (a) it is objectively and reasonably justified by a legitimate aim, and
  (b) the means of achieving that aim are appropriate and necessary.”.

This is generally done on the grounds of succession planning, that is, so that the employer can introduce new employees to the workforce and offer them promotion prospects etc.

Without the ability to set a retirement age this would be difficult as “new blood” would have restricted opportunities, and arguably the business would suffer.

This means that the employer can impose a retirement age for employees or class or description of employees provided the employer can objectively justify it, and provided the means are appropriate and necessary.

Fixed Term Contracts Post Retirement

Section 4 of the Equality (Miscellaneous Provisions) Act 2015  makes a significant change in respect of fixed term contracts post retirement. You will see below that such contracts can be offered provided

  • they can be objectively justified by a legitimate aim and
  • the means of achieving the legitimate aim are appropriate and necessary.

Clearly, the objective justification for this provision would have to be different from the objective justification forcing retirement at a particular age.

4. Section 6 of the Act of 1998 is amended in subsection (3) by the substitution of the following paragraph for paragraph (c):
“(c) Offering a fixed term contract to a person over the compulsory retirement age for that employment or to a particular class or description of employees in that employment shall not be taken as constituting discrimination on the age ground if—
(i) it is objectively and reasonably justified by a legitimate aim, and
(ii) the means of achieving that aim are appropriate and necessary.”.