In early January 2020, the Workplace Relations Commission (the "WRC") ordered the Irish State broadcaster, RTÉ, to pay €100,000 to a former employee following a finding that the employer had discriminated against the former employee on the grounds of age by refusing to permit her to work beyond the company's mandatory retirement age of 65 (the "MRA").
The WRC rejected the objective justification of "intergenerational fairness" offered by the employer for the MRA. The WRC ruled that the MRA was not a necessary and proportionate means of facilitating younger members of staff progressing to senior roles or attracting a younger audience. The WRC criticised the failure to consult with the employee and to identify a business case for extending the employment temporarily for up to 18 months on a fixed term basis.
The decision is interesting for employers in Ireland because it shines a spotlight on the viability of intergenerational fairness as a justification for using an MRA. This is a justification that is well established in European and domestic case-law and commonly deployed by employers when defending MRAs.
- Employers need to be aware of the vulnerability of MRAs even where a contractual right to impose the MRA can be established;
- MRAs may be relied on where they are objectively justified but this case demonstrates that the concept of intergenerational fairness will be rigorously scrutinised and narrowly interpreted;
- Employers need to determine the true impact of each individual mandatory retirement and assess whether enforcing the MRA in each case will produce the intended result in the organisation as a whole;
- Employers must consider proportionate means of achieving their stated aims including moving the employee to another role on a fixed term basis; and
- The employer should consider the effect on the employee of the MRA against the impact on the organisation, including taking into account the financial situation of the affected employee on retirement.
The Complainant, Ms. Roper, commenced working for RTÉ in 1988 and was working as an executive producer by the time she was obliged to retire on 9 July 2018 at the age of 65. Ms. Roper was invited to attend a retirement planning course in September 2017 in anticipation of her upcoming 65th birthday the following July. However, Ms. Roper immediately informed the RTÉ's HR department that she wished to remain at work after the age of 65 for a period of approximately 18 months. Ms. Roper attempted unsuccessfully to resolve the matter through RTÉ's grievance procedure. Her employment was terminated with effect from her 65th birthday.
The Legal Claim
Ms. Roper contended that the decision to terminate her employment on reaching the MRA was unlawful because it discriminated against her on the grounds of her age in that she was treated less favourably than other employees contrary to section 6(1) (a) of the Employment Equality Act 1998 -2015 (the "Act").
Section 34(4) of the Act expressly permits employers to use MRAs incorporating the well-established principle set out in the landmark case of Palacios de la Villa v Cortefiel Servicios SA, Case C-411/05  ECI-8531. Under the Act, an MRA is lawful in Ireland provided that:
- It is objectively and reasonably justified by a legitimate aim; and
- The means of achieving that aim are proportionate and necessary.
What is Intergenerational Fairness?
RTÉ argued that the MRA passed the test of objective justification because it was used to achieve intergenerational fairness. This, it argued, allowed younger employees to progress to more senior roles and attracted new talent into the organisation. In turn, this helped drive content which appealed to a younger audience.
RTÉ argued that if older people are permitted to stay at work after the age of 65, many remain in senior roles and this prevents younger people from progressing and new joiners from joining.
RTÉ also argued that this had a negative impact on the ability of the broadcaster to produce programmes that are of interest and relevance to a younger audience. It argued that as a public service broadcaster, it has a statutory obligation to serve a diverse demographic of consumers including young people. Evidence was put before the WRC that over half of RTÉ's audience are over 55.
Evidence was also put before the WRC that the average age of producers in RTÉ is 49, that there is a sense of "stagnation" at the producer level and that the attrition rate in RTÉ is very low at less than 3%.
In analysing the concept of intergenerational fairness, the WRC observed:
"For the respondent to discharge the burden of proof that demonstrates that discrimination has not occurred, I must be satisfied that the complainant's retirement contributed to intergenerational fairness in the organisation. I must also be satisfied that this was a legitimate aim and that it was achieved by means that were appropriate and necessary."
The WRC highlighted that "intergenerational fairness" is a broad concept. The Statutory Code of Practice on Longer Working, which guides employers and employees on preparation for both retirement and longer working confines the concept to "allowing younger workers to progress". The WRC indicated that it would limit its interpretation of the concept accordingly.
The WRC examined the impact of the decision to refuse Ms. Roper the opportunity to work after the MRA and noted that effect of this decision on the organisation overall was minimal. The WRC found that the impact was confined to the particular department in which Ms. Roper had worked and as such the positive effect was isolated and it did not deliver the benefit which it was designed to deliver, to the organisation as a whole. It delivered a short term alleviation of disgruntlement among staff around promotion prospects. As such, the measure was not necessary and could not be objectively justified.
The WRC commented that the decision to compulsorily retire Ms. Roper adjusted the age profile within RTÉ to such a "miniscule degree" that it could not be said to make a difference to the making of content that appeals to young people.
"While the promotion of a producer and the recruitment of someone new may have been a positive outcome, the effect of this on the organisation was so confined and limited to one department, that I cannot accept that it was objectively justified."
"[The Complainant's] departure may have facilitated the temporary alleviation of disgruntlement, but as a method of achieving intergenerational fairness, it fell considerably short"
The WRC ruled that the employer could have, in consultation with the Complainant, engaged the Complainant on a fixed term contract on a different assignment freeing up her permanent position as a senior producer for a younger candidate but retaining her in the organisation temporarily.
Interestingly, the WRC balanced the impact of the decision on both parties and noted that the negative effect on Ms. Roper far outweighed the "dubious" positive impact on her employer. The WRC commented that the Complainant's salary was €100,000 per year. Post retirement, she had a pension of €12,000 per year. The WRC also noted that the State pension age is 66 and is due to rise to 67 and 68 by 2028.
The decision by RTÉ to impose the MRA was unlawful discrimination on the grounds of age. Ms. Roper was awarded €100,000, the equivalent of one year's salary.
Was the MRA a Contractual Term?
It is also worth noting that Ms. Roper's contract of employment did not contain an express clause governing retirement at age 65. The WRC did not dwell extensively on this point but was prepared to accept that the MRA was implied into Ms. Roper's contract of employment. It rejected Ms. Roper's assertions that she was unaware of the MRA based on the following:
- Ms. Roper was a member of the occupational pension scheme which clearly referenced the MRA of 65 in the explanatory booklet and other documents and correspondence which Ms. Roper received and read;
- The Employee Handbook referenced the MRA; and
- The majority of employees retired at the age of 65 and while there was an established practice of certain employees remaining on after reaching the MRA for specific and individual business reasons, this did not undermine the practice of using an MRA in RTÉ.
- MRAs are not unlawful under Irish law;
- But, employers must be able to objectively justify their decision to impose an MRA. There must be compelling evidence that the use of the MRA is the appropriate, proportionate and a necessary means of achieving a legitimate aim;
- Intergenerational fairness has been held to constitute an appropriate and necessary objective justification for imposing a mandatory retirement age on many occasions but the WRC will apply a narrow interpretation of the concept and will rigorously scrutinise the effect on the organisation as a whole;
- The impact on the employee both financially and otherwise and the impact on the organisation must be balanced and weighed up when determining the proportionality of using an MRA;
- Employers must consult with the employee and must give serious consideration to acceding to requests for longer working including by means of a temporary or fixed term arrangement;
- Finally, employers are advised to consult the Code of Practice on Longer Working which is a helpful guide to planning for retirement; and
- Although not a bar to the complainant succeeding in this case, an employer who intends to attempt to rely on an MRA should include an express MRA in the contract of employment.
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.