To recap, under the Employment Equality Acts, 1998 to 2011 (the "EEAs"), it does not constitute discrimination on the grounds of age for employers to fix mandatory ages for retirement of employees.
While there is no fixed mandatory retirement age in Ireland, it is advisable that all employers have a mandatory retirement age in their contracts of employment.
However, employers should be aware that such mandatory retirement ages may still be the subject of legal challenge by employees on the basis that it constitutes discrimination on the grounds of age to force an employee to retire once they reach a certain age in certain circumstances. This type of challenge has been the subject of an increasing body of case law from the Equality Tribunal in recent times.
If a mandatory retirement age is challenged by an employee and an employer finds itself defending its retirement age before a third party, court or tribunal, the employer may have to justify the existence of the mandatory retirement age on the basis that its imposition is objectively and reasonably justified by a legitimate aim, and the means of achieving that aim are proportionate and necessary. Though this requirement is not set out in the EEAs, it has permeated from decisions of the European Court of Justice (the "ECJ"), which has prompted the Equality Tribunal to interpret the EEAs in line with ECJ jurisprudence. As such, it is imperative that employers are aware of this development, and are capable of defending any mandatory retirement age which they impose on the basis as outlined above.
What constitutes a legitimate aim, and whether it goes beyond what is appropriate and necessary to achieve that aim, will depend on the particular business and environment of the employer. A legitimate purpose may include, for example, a legitimate employment policy, labour market and vocational training objectives, health and safety of employees, ensuring promotional and recruitment opportunities for young people etc.
Employers should also ensure that they apply any rules in relation to mandatory retirement ages in a consistent manner, which is not discriminatory in itself, in order to avoid unnecessary exposure to claims by its employees.
Legislative intervention in this area would be welcomed in order to clarify the obligations on employers relating to the imposition and justification of mandatory retirement ages.
Separately, employers should also be mindful of the provisions of the Unfair Dismissals Act, 1977 to 2011 (the "UDA"), in relation to normal retirement ages in that where an employee is deemed to have reached the "normal retirement age" for employees in a similar employment with that employer, and his/her employment terminates by reason of retirement, then he/she is excluded from the protection of the UDA.
The Employment Appeals Tribunal have held that "normal retirement age" is a definite or particular age in the relevant employment and not simply the retiring age that may be specified in a contract of employment, if that retirement age has, in fact, been superseded by some definite higher age which is applied in practice by the relevant employer. Therefore, the proper test regarding "normal retirement age" is to ascertain what would be the reasonable expectation or understanding of employees holding that position at the relevant time. The contractual retirement age will most likely be the normal retiring age, but may be displaced by evidence that it has been regularly departed from in practice. Therefore it is important for actual practice in the place of work to match the provisions of the employment contract.
This article is a follow on from our article appearing in the November 2011 Employment Law and Benefits Update, 'Retirement Age: Latest Update from Europe'.
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.
