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Mandatory Retirement Age Held Discriminatory on Age & Gender Grounds – One year’s pay awarded

In its recent decision in the case of Doreen Nolan v Alsaa, ADJ-00029859 on the issue of mandatory retirement ages, the WRC awarded a female employee one year’s pay as compensation for discrimination on the grounds of both age and gender.

Facts: The Complainant was employed by the Respondent from August 1988 to 20th May, 2020 (almost 32 years). In 2010 the Respondent introduced an Employee Handbook which outlined a retirement age of 65 but gave no rationale for its introduction. The Respondent did not provide any rationale for the retirement age to the employees at any stage.

While other employees had retired at a later age during the Company’s history, the Complainant was the first employee to reach 65 following the introduction of the retirement age. She was instructed that when she was 65 years old she would have to retire. The Complainant sought to remain on in employment and was offered a fixed term contract by the Respondent for one year at the same rate of pay.

Subsequently she was offered a second fixed term contract but at a rate of pay that was almost 20% less. However, when a male colleague reached the age of 65, he was kept on for a further two years on contract extensions at the same rate of salary throughout. The Respondent argued that the comparator chosen by the Complainant was not valid as he was not an employee but was providing his services on a self-employed basis. There is also a note in the decision to the effect that the Respondent undertook at the hearing to pay the Complainant the amount which her final fixed term contract was reduced by.

It appears that following the conclusion of the second fixed term contract, the Complainant was informed that it would not be possible to extend her employment further. The WRC indicated in its decision that it appeared from oral testimony, that the male colleague was “not told that he would not be refused an additional fixed term contract. Rather the respondent was silent on this as the male colleague indicated that he wished to retire upon reaching 67”.

The Respondent indicated that in considering whether to allow staff to work on beyond the age of 65 they had a “rule of thumb” that staff would only be allowed to work on for a further two years.

The Complainant submitted that the Respondent simply chose a retirement age without providing any justification for that age limit. The Complainant also submitted that she was employed in a receptionist type situation where most of the clientele are older and submitted that the position was not an onerous one. Both of these points seem to have been accepted by the Respondent.

Decision:

Complaint of discrimination on the grounds of age

Interestingly, in the WRC decision the Adjudicator commented on the “rule of thumb” the Respondent applied in relation to staff only being allowed to work on for a further two years after the age of 65. The Adjudicator took the view that in effect the Respondent was ignoring its stated retirement age of 65 and bringing in a retirement age of 67. This point was not the focal point of the case or the decision but is an interesting point to note.

In relation to the age discrimination complaint generally, the Adjudicator found that whilst the Respondent is entitled to set down a retirement age, the setting of a retirement age must be objectively justified and that this is a matter of settled law. The Adjudicator upheld the age discrimination complaint and awarded the Complainant compensation equivalent to 26 weeks remuneration for this claim i.e. €14,000.00.

Complaint of discrimination on the grounds of gender

The Adjudicator, found that although the Respondent denied treating the Complainant differently to her male colleague, it transpired that the Respondent would only agree to provide the Complainant a second fixed term contract on condition that she take a pay cut for the duration of that contract. The Adjudicator found that her male colleague was not subject to the same reduction. As indicated above, the Adjudicator also found that the male colleague was not told he would be refused an additional fixed term contract but rather the Respondent was silent on this as the male colleague indicated he wished to retire upon reaching 67. The Adjudicator held that no reason was provided for this different in treatment.

The Adjudicator upheld the gender discrimination complaint and awarded the Complainant compensation equivalent to 26 weeks remuneration for this claim i.e. another €14,000.00.

Total Award: Therefore, the total award made to the Complainant was for 52 weeks remuneration i.e. one year’s pay which amounted in this case to €28,000.00.

Takeaway for the Employers:

  1. An employer is unlikely to be able to enforce a mandatory retirement age unless it is objectively and reasonably justified by a legitimate aim and the means of achieving that aim are appropriate and necessary. Such justification should be set out in writing for all employees with the mandatory retirement age.
  2. Employers should be mindful that adopting general practices or rules of thumb around deciding time periods for extensions past retirement age (for example in this case deciding that staff will only be allowed to work for a further two years) can have inadvertent consequences such as in this case where the Adjudicator took the view that this was to bring about a new retirement age of 67. This emphasis that it is better to consider the issue purely on a case by case basis.
  3. It is also a reminder for employers that differences in relation to pay between comparable male and female employees will be deemed discriminatory unless there are very clear objective reasons for the difference. Furthermore, as this and previous case law has shown the mere fact that a male comparator is engaged as an independent contractor/self employed person as opposed to a direct employee may not be sufficient to justify the pay difference.

Link  – https://www.workplacerelations.ie/en/cases/2022/february/adj-00029859.html

Authors – Anne O’Connell, Laura Killelea

23rd February, 2022

Anne O’Connell Solicitors

19-22 Lower Baggot Street, Dublin 2

www.aocsolicitors.ie

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