Ireland: Mandatory Retirement: An Update On Recent Cases

Last Updated: 13 November 2019
Article by Kevin Langford, John Casey and Niamh Fennelly
Most Read Contributor in Ireland, November 2019

Three recent decisions spotlight the challenges employers face in effecting mandatory retirement, as well as the price to be paid by those who get it wrong. We will look at each case in turn and provide some advice for employers faced with these difficult situations.

1. Longford County Council v Michael Neilon

The Labour Court reversed a decision of the Workplace Relations Commission (the "WRC"), finding that Longford County Council had failed to establish that a mandatory retirement age existed of which Mr Neilon was or ought to have been aware. Perhaps the most striking aspect of this decision is the remedy ordered, specifically reinstatement.

The employer's arguments

The Council compulsorily retired Mr Neilon, a truck driver, when he reached the age of 66. Mr Neilon brought an unfair dismissals claim. The Council argued that his retirement was in line with its normal and agreed mandatory retirement age. The Council grounded its position in Mr Neilon being classified as an outdoor worker whose terms and conditions of employment were covered by a current national agreement for outdoor workers and that agreement's predecessor. The Council also noted that, prior to a December 2018 legislative change, the mandatory retirement age for existing public service employees was set at 65 (except for "new entrants" covered by the Public Service Superannuation (Miscellaneous Provisions) Act, 2004).

The Council conceded that nine of its employees remained at work after the mandatory retirement age in the period from 1998 to 2006. However, the Council said it re-established its mandatory retirement age in 2006 by introducing a retirement policy for all employees. 85 employees had retired since then and only one of those had worked beyond 66 (that exception being covered by the "new entrant" proposals arising from the 2004 Act). The Council submitted that the retirement policy was accepted on behalf of all employees by their representative bodies and that details were sent to all employees.

The employee's arguments

Mr Neilon submitted that the Council's mandatory retirement age was 72. Mr Neilon argued that at no stage during his employment did a term exist in his contract of employment, express or implied, stating that he was bound to retire at 66, nor was there a custom or practice to that effect. Mr Neilon denied that his terms of employment had been amended by any statute or collective agreement. Mr Neilon said the Council had failed to provide him with a copy of his contract of employment, which he recalled having signed but did not recall the contents of. In response to an FOI request, the Council had admitted to him that it did not have a copy. Mr Neilon further gave evidence that the Council's finance officer verbally told him he could remain in employment up to the age of 70, which in any event was "traditional for all outdoor employees ... as long as they were fit."

The Labour Court's decision

The Labour Court preferred the evidence of Mr Neilon in concluding it was not unreasonable for him to expect that he would continue in employment after the age of 66. The Labour Court held that the Council was not able to establish that it had a mandatory retirement age.

At the core of the Labour Court's decision was the "significant" failure by the Council to provide compelling evidence of its alleged mandatory retirement age, whether by way of Mr Neilon's contract of employment, its pension scheme, its collective agreement or otherwise. On the other hand, there was a "custom and practice of pre-2004 outdoor workers having the option to retire beyond their 66th birthday and up to their 72nd birthday" and, even after the Council's alleged resurrection of its mandatory retirement age in 2006, Mr Neilon provided the Labour Court with the names of between 9 and 13 outdoor employees who retired beyond the age of 66.

Emphasising the serious attempts made by Mr Neilon to secure alternative employment, the Labour Court awarded him his preferred remedy of reinstatement on his previous terms and conditions until the age of 70.

2. Michael Fox v Tedcastles Aviation Fuels Limited

In the second case, the WRC found that Tedcastles had discriminated on the grounds of age against Mr Fox, who had managed its refuelling of commercial airliners at Shannon Airport, by compulsorily retiring him at 65.

The employee's arguments

Mr Fox submitted there was no mandatory retirement date: none in his contract of employment nor in any collective agreement or company handbook. Mr Fox accepted there was some reference to a drawdown date for his pension in the pension documents he received, but argued he never would have seen same had he not voluntarily opted to join the scheme. He further contended there could not be an implied retirement date as he could put forward three examples of employees who had worked beyond 65. Even if there was a mandatory retirement date, Mr Fox also submitted it was not objectively justified given that he was fit enough to continue working.

The employer's arguments

Tedcastles argued Mr Fox was repeatedly informed of its mandatory retirement age, in particular through the pension scheme rules. Mr Fox had recently joined the pension scheme after encouragement from Tedcastles that he should save for his retirement. Tedcastles also submitted that Mr Fox was clearly aware of the mandatory retirement date given "the significance of retirements in [Tedcastles], where there is no voluntary turnover and permanent/promotion opportunities only arise as a result of retirement". Tedcastles also sought to counter Mr Fox's submission that it had allowed three employees to work beyond the age of 65. Tedcastles explained that two of those retired at 65 but were then rehired for specific purpose/fixed term contracts (drawing down their pensions at 64 and 65 respectively) and the third was rehired for two contracts (drawing down his pension at 67).

The WRC's decision

The WRC found Mr Fox had raised a prima facie case of discrimination and so the burden of proof switched to Tedcastles to rebut. The WRC found that Tedcastles failed to do so, as it could not establish it had a mandatory retirement age. First, there was no clear contractual arrangement. Second, the lengthy, complex and technical nature of Tedcastles' pension documents led the WRC to conclude that it was unreasonable to suggest that Mr Fox should have understood from them that there was a mandatory retirement age and that it was 65. The pensions documents did include the following three statements:

"When can I retire? In normal circumstances you will retire on your 65th birthday. This is your 'Normal Retirement Date'."

"With the company's consent, you may also be allowed to defer your retirement beyond your Normal Retirement Date."

"Normal Retirement Date means your 65th birthday or such other date as the company may specify and notify to you."

The WRC concluded there was no express contractual mandatory retirement date nor did Mr Fox have "clear, actual knowledge as to the existence" of an implied mandatory retirement date. The WRC found in Mr Fox's favour and awarded him €5,000.

3. Assistant Transport Manager v Bakery

In the final case, the WRC rejected an unfair dismissals claim taken by a former assistant transport manager of a bakery who was compulsorily retired at 71.

The employee's arguments

The claimant argued that his employment was terminated due to an alleged downturn in the business approximately one year after the Bakery told him it could no longer insure him to drive because of his age and moved him to a primarily non-delivery office based role. The claimant said there was no downturn. He gave evidence that he had been previously assured he would have a job "as long as he wanted it". He said it was a custom in the Bakery's business for people to retire in their seventies. The claimant conceded he had received the State old age pension since age 66.

The employer's argument

The Bakery argued there had been no dismissal and that the claimant's employment ended by way of agreed retirement. This followed a previous lead in period of reduction in his weekly working hours (from five days to four days to three days) and the accommodation of his request to work certain days that suited him better. The Bakery said its mandatory retirement age was 65 but an exception had been made because of his 51 years' service and dedication. The Bakery had met him three times in the years preceding his retirement to set out his retirement options. The claimant's retirement came on the same day as that of another employee aged 70. On notification of his retirement, the Bakery claimed the claimant responded with "fair enough". The Bakery said it had no idea he was dissatisfied with his retirement until it received a solicitor's letter nine days after the end of his employment. The Bakery said that following contact with the claimant he had confirmed to the Bakery he would not return to work. However, neither he nor his solicitor would confirm this in writing.

The WRC's decision

The WRC was persuaded by the Bakery's "coherent and compelling" evidence. It therefore dismissed the claimant's complaint. The WRC's decision took into account the Bakery's retirement policy, its reduction of the claimant's hours in the period preceding his retirement, the meetings it held with him about retirement in the same period, the retirement of his colleague on the same day and the limited correspondence between the parties. The WRC concluded the claimant was verbally told many times of his upcoming retirement as soon as he reached the mandatory retirement age of 65. The WRC did criticise the Bakery's lack of documents, in particular its failure to present a contract of employment or "HR file". The WRC noted the importance of the case being an unfair dismissals case rather than an employment equality case and commented that the claimant's submissions appeared to confuse the two claims.

Advice for employers

As advised in previous Group Briefings on this topic, employers must overcome the dual hurdles of:

  1. establishing a mandatory retirement age, and
  2. objectively justifying it in the context of the continuing societal and governmental shift towards facilitating employment beyond the age of 65 and the WRC's Code of Practice on Longer Working.

All three of the cases focused on the first hurdle.

Notwithstanding that the Assistant Transport Manager v Bakery case was successfully defended by the employer, the cases capture the hazards faced by an employer in the absence of an express contractual mandatory retirement age and the messy nature of the evidential battle that can ensue.

Perhaps the most striking aspect of the Longford County Council v Michael Neilon decision is the remedy ordered, specifically reinstatement. The order should be cautionary for any employer considering compulsorily retiring an employee. Awards of compensation have been far more common to date and the practical difficulties posed by reinstatement are wide ranging and not easily solved, including in relation to the question of continuation of benefits (pensions, life assurance etc). However, employers should remember that the power to order reinstatement in any given case is within the discretion of the WRC, which has shown its willingness to order the remedy in appropriate circumstances.

In light of an ageing population and an increasing desire/financial need amongst same to continue working beyond traditional retirement dates, employers must continue to reflect on their strategy to better address this and ensure good workforce planning.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

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