While Mark Twain might of thought this, the same might not be as true for employers. While there are nine different grounds of discrimination under Irish employment law, there seems to have been a significant growth in the number of employment claims centered around age discrimination due to mandatory retirement policies and clauses in employment contracts and handbooks.
The Employment Equality Acts 1998-2015 defines discrimination as treating one person in a less favourable way than another person based on any of the following nine grounds:
- Civil status;
- Family status;
- Sexual orientation;
- Race; and
- Membership of the Traveller community.
What does this mean for employees/employers? Surely, as an employee you are protected under this legislation? Perhaps not entirely as Irish law currently does not prohibit employers putting in place a mandatory retirement age in your contract of employment. However, it is not as black and white as that as recent case law and the Equality (Miscellaneous Provisions) Act 2015 offers a lifeline to employees. Under this legislation and recent Irish and European caselaw employers can still set compulsory retirement ages, but the particular age chosen must be “objectively and reasonably justified by a legitimate aim”, the means of achieving this which must be “proportionate and necessary”.
Protecting your Companies interests
If an employer wants to have the right to compulsorily retire employees at a set retirement age, then the inclusion of an express mandatory retirement age in all employment contracts is the first step to successful achieving this. A number of recent decisions from the High Court and the Workplace Relations Commission (the “WRC”) highlight the importance of having a contractual entitlement to retire employees at a fixed retirement age.
The High Court decision in Quigley v The Health Service Executive serves as a reminder that contracts should be reviewed regularly to ensure they are up to date and as indisputable as possible. While the absence of an express retirement age in a contract of employment is not necessarily fatal, it can be difficult in practice to establish a retirement age is implied, particularly where the employer has had a custom and practice of employees working beyond a particular age.
In Quigley the High Court had to consider a claim by the plaintiff that the defendant was not entitled to terminate his employment based on age. The plaintiff had worked for the defendant since 1998 and was informed a month before his 65th birthday that his employment would terminate with effect from his 65th birthday. This termination was due to the fact Mr Quigley would be reaching the purported maximum retirement age of 65.
The plaintiff sought an injunction restraining his termination, pending the determination of proceedings. The plaintiff challenged the termination on the basis that his contract of employment was not subject to a maximum retirement age and there was no provision preventing him continuing in employment upon reaching the age of 65. The plaintiff claimed that the imposition of a compulsory retirement age, without justification, amounted to unlawful discrimination on the grounds of age. He argued that he was entitled to remain in the employment for as long as he wished, provided he was medically fit to undertake his duty of employment.
The High Court was ultimately not satisfied that a retirement age could be implied into the general practitioner’s contract of employment and granted the injunction sought. The Court stated that damages would not be an adequate remedy in the circumstances.
If that is not enough to catch your attention maybe paying compensation will. In one of the most recent cases of age discrimination RTÉ paid the price as seen in Valerie Cox v RTÉ. In this case RTÉ told the WRC it had a “considerable interest in ensuring the progress of younger members of staff and for the rotation of staff”. Further to this RTÉ argued that the retirement age was clearly set out in their employment handbook. The WRC Adjudication Officer said the staff handbook did provide for working beyond 65 years, “at least in relation to this category of employee”. Ms Cox was on a casual/irregular contract of employment. The WRC found that RTÉ discriminated against Ms Cox on the basis of her age by compulsorily retiring her at the age of 65 in circumstances where there was no reference to a mandatory retirement age in either her contract of employment or RTÉ’s employee handbook. The WRC also held that RTÉ failed to objectively justify Ms Cox’s forced retirement at age 65 and awarded reinstatement and compensation in the sum of €50,000.
A Code of Practice was introduced last year by the WRC with a view to assisting employers in handling requests from employees seeking to work longer than their compulsory retirement age.
In addition to this, the Irish Human Rights and Equality Commission last month published its guidelines called the “Retirement and Fixed-Term Contracts Guidelines”. The Commission seeks to provide guidance to both employers and employees in relation to older workers, who wish to continue in employment.
Options for employers affecting mandatory retirement
There is a statutory retirement age for some public servants. For people who joined the public service before 1 April 2004 this is generally 65. Since 1 January 2013, the minimum retirement age for new entrants is 66 years of age rising to 68 in 2028 in line with the State contributory pension.
Many employers may wish to facilitate employees’ requests and extend their employment to bridge the gap between the mandatory retirement age and the age of entitlement to the State pension. Many employers are concerned about which course of action they should take to bridge that gap. It is important to note that none of the below options are free from the risk of litigation and each comes with pros and cons. If there is an enforceable mandatory retirement age in place, the options are:
- Remove the mandatory retirement age altogether, leaving the contract of employment as one of indefinite duration.
- Increase the mandatory retirement age (on a voluntary basis for existing staff) to align with the age of entitlement to the State pension.
- Offer one post-retirement fixed-term contract as per section 6 of the Employment Equality Acts 1998 to 2015 with an end date aligned to the employee’s age of entitlement to the State pension.
- Preserve the status quo, requiring employees to retire at their existing mandatory retirement age (usually 65).
Employers should be reviewing their contractual retirement ages and ensuring that their contracts are in line with their employee handbook, policies and practices.
In line with recent legislation and caselaw employee contracts should clearly set out:
- That the particular retirement age is objectively and reasonable justified by a legitimate aim.
- That the means of achieving this is proportionate and necessary.
Once these factors have been achieved, the employer should ensure that they have an objective justification for the imposition of a set retirement age which can be supported with evidence and one that does not go against custom and practice.
Ogier Leman routinely draft employee Contracts and Handbooks for some of Ireland’s best known companies. For more information on how we can assist, please contact our Employment Department.
Disclaimer: This publication is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Ogier Leman for any action taken or not taken in reliance on the information set out in this publication. Professional or legal advice should be obtained before taking or refraining from any action as a result of the contents of this publication. Any and all information is subject to change.