Litigating when an employee is dismissed on reaching retirement age
Section 34 of the Employment Equality Act 1998 (EEA) makes it not unlawful on the age ground for an employer to fix retirement age and there is no qualification in the Act as to what criteria the employer may use to fix retirement ages.
Similarly, section 2.1 of the Unfair Dismissal Act 1977 (UDA) excludes dismissal of an employee who has reached normal retirement age.
Much of the Irish case law concerns the question of whether the employee was dismissed on reaching a fixed retirement age. For instance in McCarthy v. Calor Teoranta 2008 ELR 42 the Labour Court held that the dismissal was discriminatory under the EEA on the basis that the claimant was dismissed at age 60 and the normal retirement age was found to be 65.
Under EU law it would be contrary to Directive 2000/78/EC (which forms the basis for age discrimination law in this jurisdiction) to dismiss for retirement age unless the requirements of either Article 2.5 or 6.1 are met :-
2.5 This Directive shall be without prejudice to measures laid down by national law which, in a democratic society, are necessary for public security, for the maintenance of public order and the prevention of criminal offences, for the protection of health and for the protection of the rights and freedoms of others.
...
6.1 Notwithstanding Article 2(2), Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary...
There is an almost irrefutable argument that s.34.4, in not setting any conditions for the exemption for retirement age, is contrary to the Directive and the ECJ case law. This was flagged in McCarthy v. Calor Teoranta.
The Employment Equality (Amendment) (No 2) Bill 2012, proposes to amend the EEA to bring it in line with to ensure that they are consistent with the Directive 2000/78/EC but it has not been passed yet. It would require that the retirement age is necessary to achieve a legitimate aim, that the discriminatory effects of significantly outweighed by the importance and benefits of the legitimate aim and that the employer has no reasonable alternative but to require the employee to resign at 65.
The ECJ case law surrounding the question of whether the requirements of A.2.5 or 6.1, outlined above, are met.
In Félix Palacios de la Villa v Cortefiel Servicios SA Case C-411/05 the ECJ held that the requirements of Article 6.1 were met. The mandatory retirement age of 65 if (as in that case) was objectively and reasonably justified – retirement age was used to reduce unemployment among the under 65's.
In Petersen v Berufungsausschuss für Zahnärzte für den Bezirk Westfalen-Lippe Case C-341/08, the ECJ held that the requirements of A.2.5 were not met – the State could not argue the setting of retirement age of 68 for panel dentists was necessary for the health of patients when a similar retirement age was not set by national law for dentists in private practice. The ECJ held however that the requirements of Article 6.1 might be met if it was shown that it's aim was to share out employment opportunities among the generations in the profession of panel dentist, taking into account the situation in the labour market concerned, but this was a matter for the national court to determine.
In Prigge v Deutsche Lufthansa Case C-447/09 the ECJ held that the compulsory retirement age of 60 for pilots of the defendant organisation was unlawful and contrary to Directive 2000/78. The court held that the requirements in Article 2.5 of the Directive were not met and pointed to the fact that international and German legislation permitted pilots to work to the age of 65 provided certain conditions were met.
In O'Neill v. Fairview Motors Ltd. 2012 ELR 340 the plaintiff was dismissed at age 66. The Equality Tribunal (ET) held the dismissal was discriminatory on the age ground. The ET held the setting of a retirement age must be objectively and reasonably justified by a legitimate aim and the means of achieving the aim were appropriate and necessary which was not established in the case.
Comment
When taking a case for dismissal on retirement age it might be advisable to take an EEA case rather than a UDA case on the basis that the the respondent may have to show in an equality case that not only was the employee dismissal by reason of reaching retirement age but also that the fixing of the retirement age was reasonable. The second limb of this requirement would not be a requirement in a UDA case.
To rely on the provisions of article 2.5 and 6.1 rather than the provisions of the unamended EEA, it would normally be a requirement to show that the respondent is the State or an emanation of the State. However, there is a decent argument for horizontal direct given that the directive and Article 6.1 in particular does not contradict s.34. Therefore it may be that s.34 can be relief upon against respondents other than the State or an emanation of the State.
Following the ECJ case law it will be difficult for employers to argue that the setting of a blanket retirement age is necessary to protect the health of service users – there is usually the less onerous measure of medical assessments beyond the retirement age to test the employees fitness to work. Employers have had greater success in the ECJ in defending retirement age on the basis of reintegration of younger workers to the workforce.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
