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Issues re-proposed legislation banning mandatory retirement

The issue of mandatory retirement age remains an extremely topical legal and political issue. There has been a significant number of age discrimination cases before the courts which has resulted in extreme caution being exercised by employers when setting a mandatory retirement age due to potential liability. The topic has garnered over the past year with the Government deciding not to oppose the introduction of two Bills that seek to further amend this area of Irish Law.

The growing concern surrounding Mandatory Retirement age has come as a result of the controversial age gap between retirement age and state pension age. This has left a substantial number of 65-year-olds with no other option but to claim jobseekers allowance. Figures from December 2016 show that there were more 65-year-olds in receipt of jobseeker’s benefit than any other age group in this State with 5,239 men and women aged 65 in receipt of jobseekers payments. The introduction of higher qualification age for State pension rising to 67 in 2021 and 68 in 2028 will significantly worsen the situation.

Current Law in Ireland
Irish law does not set a mandatory retirement age in the private sector, however, it does currently permit employers to set a mandatory retirement age for their employees in their employment contracts. The Equality (Miscellaneous Provision) Act 2015 amended section 34 the Employment Equality Acts requires that any mandatory retirement age set by an employer must be objectively and reasonably justified by a legitimate aim and the means of achieving that aim be necessary and appropriate. This amendment brought Irish law in line with the jurisprudence of the Court of Justice of the EU. In contrast, the public sector is allowed to set a mandatory retirement age.

The proposed amendments to the law
The first bill, the Employment Equality (Abolition of Mandatory Retirement Age) Bill 2016, was introduced by Fianna Fáil in December 2016. This Bill, if enacted, would prohibit in circumstances where an employee can show, as a matter of fact, full fitness to work including the ability to carry out work and tasks for which they are contracted in, the imposition and execution of mandatory retirement. It appears that this Bill will not apply to the public sector whatsoever.

The second bill, introduced by Sinn Féin TD, Deputy John Brady is much more radical. The Employment Equality (Abolition of Mandatory Retirement Age) Bill 2016 seeks to amend further section 34 of the Employment Equality Acts. In doing so, the amendment will bring an end to the current practice. It will not relate to certain employees, such as An Garda Síochána or the Defence Force, whom will remain subject to mandatory retirement ages. The Bill does, however, outline the option for an employer to set out a voluntary retirement age or to provide financial incentives for the voluntary retirement of an employee when they reach a certain age.

There are a number of policy and expenditure concerns related to the enactment of such Bills into the law that must first be addressed. Firstly, the retirement provisions of existing employment contracts would need to be set aside. This would result in direct interference with the private relationship shared between an employee and their employer. The Attorney General has commented on the fact that The Employment Equality (Abolition of Mandatory Retirement Age) Bill 2016 is intended to act retrospectively to pre-existing contracts of employment advising that it may be susceptible to legal challenges under Article 15.5.1 of the Constitution which provides that “The Oireachtas shall not declare acts to be infringements of the law which were not so at the date of their commission.” The introduction of such Bills may also significantly impact or even go as far as determine pending legal battles regarding mandatory retirement age.

There may also be significant implications regarding youth employment if a considerable number of older workers remain in the workforce it will inevitably reduce the number of new hires. The scope of the Employment Equality (Abolition of Mandatory Retirement Age) Bill 2016 also needs clarification, as in its present form it would repeal employment equality rules prohibiting discrimination on grounds of gender or disability. This is a serious issue that needs to be addressed as it is crucial that the State continue to comply with EU Treaty obligations regarding equality.

Advice for Employers
The overriding concern for the initial enactment of the forenamed bills is the age gap between employee’s retirement and the receipt of State pension age. If employment contracts set out a mandatory retirement age in line with the age for receipt of State pension this would undoubtedly address substantial concerns on this issue and prevent the retiring employee from financial hardship by having to apply for jobseekers allowance. The Bills in their current form need clarification and amending in order to be seriously considered by the Government and so employers should not become overly concerned at the moment but should align themselves with the current legal requirements regarding mandatory retirement age.

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