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Labour Court Finds Company’s Mandatory Retirement Age Justifiable

Facts: The Complainant commenced employment with the Respondent Company as a Service Engineer on 1st September 1989.  His employment ceased due to his reaching his 65th birthday on 21st January 2020.   The Complainant initiated a claim against his former employer under the Employment Equality Acts 1998-2015 (the “Act”).  He claimed that he was discriminated against on the basis of age.  The WRC hearing this claim on 10th February 2020 and the Adjudicator did not find in favour of the Complainant.   The Complainant then lodged an appeal against this finding to the Labour Court.

The Complainant argued that he had no health concerns and was fit to remain employed in his role.   He requested a 12-month extension to his contract which was denied.   The Union, on behalf of the Complainant submitted that other employees had been retained past the age of 65.   The Complainant further submitted that his contract of employment referred to a ‘normal retirement age’ and not a ‘mandatory retirement age’.  

The Respondent argued that there was an implied term in the Complainant’s contract that the retirement age was mandatory.  It was referenced in both the pension scheme and the Employee Handbook.  There was evidence before the court that it was the Company’s established practice, which was consistently applied, that all Service Engineers retired on or before their 65th birthday.  It was conceded that a former Service Engineer was retained past his 65th birthday but that this was in an administrative role which he had transferred into some years before reaching 65.

The Respondent submitted that Service Engineers are safety critical roles and require substantial training and investment in apprentices.   In order to ensure the employee’s safety their only alternative to a mandatory retirement age was mandatory health testing, which could bring the employees career to an abrupt end.  The Respondent further argued that the mandatory retirement age was objectively justifiable for succession planning as they would plan to have apprentices trained to step into the retiring employee’s role.   For a variety of reasons the Complainant’s role in this case was not immediately filled but the Respondent argued that despite the failure of it’s plan from time to time, it was a legitimate aim of the Company and therefore the mandatory retirement age was objectively justifiable.

The Act prohibits discrimination on the basis of age.  However the Act goes on to state that fixing ages for retirement is not contrary to the Act if it is objectively and reasonably justified by a legitimate aim and the means of achieving that aim is appropriate and necessary.

In this case, the Labour Court was required to determine firstly, if there was a Mandatory Retirement Age rather than a Normal Retirement Age applicable to the Complainant’s employment and if there was, did it fall under the exception in the Act.

The case of Irish Ferries Limited and Martin Mc Dermott EDA1631 was cited by the Respondent as the facts are almost identical to this case.

Decision: The Labour Court determined that the mandatory retirement age enforced by the Respondent was not contrary to the Act as it was reasonable, proportionate and appropriate to achieve the legitimate aim of the Company and therefore was objectively justified.  The Complainant’s appeal failed. The Labour Court held that the legitimate aim in this case is to ensure a through flow of appropriately qualified service engineers and to ensure that employees are not required to continue working until they are unable to perform the duties.  

Takeaway for the Employers: This Labour Court decision is very useful to illustrate that an employer with a logical legitimate aim for its mandatory retirement age can rely upon it, once consistently applied. In this case, the Complainant’s contract did not contain a Retirement clause. However, it is advisable to not only have a Retirement Clause in the contract but also to state the legitimate aim for the retirement age in that clause.

Decision ReferencePat O’Donnell & Co. v. Denis O’Keeffe Decision Number – EDA2133 (Decision not on Workplace Relations Website at the Date of this article)

Authors – Nicola MacCarthy, Anne O’Connell

30th September 2021

Anne O’Connell Solicitors

19-22 Lower Baggot Street, Dublin 2

www.aocsolicitors.ie

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