The majority of employers will no doubt be aware of the developments in respect of retirement ages over the last number of years. It is no longer safe to simply have a retirement policy and enforce slavishly; rather employers must have objective justification for the policy in the first place. In this article we look at some recent developments, including a dispute within the Government parties on future developments.
Current Position in Ireland
In a number of important cases the Irish High Court and the Equality Tribunal have stated that employers must, in accordance with EU rules, have objective and reasonable justification before they can enforce a retirement policy. This is because a retirement policy is inherently discriminatory on the grounds of “age”. Thus, an employer may only safely retire an employee where they (a) have a written retirement policy in the employee’s terms and conditions, and (b) have objective and reasonable justification for such a policy.
What is Objective and Reasonable Justification?
It’s important to be mindful that objective and reasonable justification is not a “one size fits all concept”. What might be deemed objective and reasonable justification for a retirement policy in one organisation may not be deemed objective and reasonable justification in another. Another issue is that an employer may be able to objectively and reasonably justify a retirement policy for certain categories of employee but that does not mean they could necessarily justify a policy for other categories of employee within the same organisation.
In the case of Donnellan -v- Minister for Justice [2008] IEHC 467 the requirement for a Garda Commissioner to retire at 60 was allowable as it was objectively justified in order to ensure “motivation and dynamism through the increased prospect of promotion” within the Gardaí. In the case of Saunders -v- CHC Ireland Limited (DEC- E2011-142) it was recognised that a policy requiring a helicopter winch man to retire at 55 was objectively justified as such winch men are required to engage in search and rescue missions involving a “high level of physical capacity”. Therefore, as physical capacity “diminishes with age” it was held that this policy could be justified.
As such, creating promotional opportunities and/or the health and safety risk associated with a role may justify a retirement policy. However, within the same organisations the same justification could not necessarily be used for a receptionist or administrative role which does not carry a health and safety risk and which may be a relatively low role in the organisation’s promotional ladder.
Future Developments
As it stands, there are two separate Bills being considered by the Oireachtas. The Employment Equality (Amendment) (No.2) Bill 2013 is seeking to formally introduce the requirement for “objective justification” for retirement policies. This is in keeping with the case law mentioned above and in keeping with the EU rules. However, separately and somewhat confusingly there is a second Bill called the Abolition of Mandatory Retirement Age Bill 2014 which proposes that mandatory retirement ages be abolished. In such circumstances employers would not be permitted to have compulsory retirement ages for persons willing and able to continue in their job. Therefore, the two Bills are contradicting each other as one will allow for compulsory retirement and the other will not.
Conflict in the Government
The Abolition of Mandatory Retirement Age Bill was proposed and put forward by Anne Ferris who is a TD from the Labour Party. Minister Aodhán Ó’Ríordáin who is also of the Labour Party has recently questioned the legal basis of this Bill, stating that it raises “serious policy issues” and “would be a radical step”. Minister Ó’Ríordáin has stated that “State intervention in private contracts to abolish on a unilateral basis the retirement arrangements entered into by the two parties would be of doubtful legality…”
Conclusions
As it stands, employers will need to have objective justification for any retirement policy. Having a written policy will not be sufficient unless the employer can justify why the policy exists in the first place. Going forward, it is possible that compulsory retirement policies will be abolished in their entirety. Employers are encouraged to keep a close eye on developments in this area.
If you have any questions on this article then please do not hesitate to contact our 24 Hour Advice Service on 01 855 50 50.
