The issue of mandatory retirement age remains an extremely contentious issue both legally and politically. The increasing number of age discrimination cases before the courts has emanated in extreme caution being exercised by employers regarding the retirement age of their employees. The increased qualification age for the State pension to 66 in January 2014 has resulted in a number of workers seeking to remain in their jobs beyond retirement age. This trend is likely to continue as state pension age is set to increase further in 2021 and 2028.
In August 2016 the Minister for Public Expenditure and Reform, Paschal Donohoe recommended that the Workplace Relations Commission prepare a Code of Practice under Section 42 of the Industrial Relations Act 1990 Act around the issue of longer working lives.
The Code was published in late 2017, with the objective that it be used as a tool to guide employees, employers and their representatives on the best practice in the lead-up to retirement. The Code sets out best practice under the following headings:
➢ Utilising the skills and experience of older workers.
➢ Objective justification of retirement.
➢ Standard retirement arrangements.
➢ Requests to work longer.
From an employer’s perspective, the Code includes advice on responding to requests from employees seeking to work beyond the company retirement age. Mirroring the provisions of the Equality (Miscellaneous Provisions) Act 2015 the Code reminds employers that company retirement age must be capable of objective justification with a legitimate aim and the measures of achieving such aim are appropriate and necessary. Employers should therefore consider the grounds upon which they may consent or deny a request by an employee to work longer.
The Code also refers to examples of what case law have found to be legitimate aims, which include intergenerational fairness, succession planning and the creation of a balanced age structure in the workplace. Additionally, if an employer is to consent to such a request, they must assess the means by which this could be contractually arranged, such as through a fixed term contract.
The Code also provides guidance for employees seeking to work beyond their retirement date suggesting that such a request should be made no less than three months from the intended retirement date. The Code also provides guidelines on good practice suggesting that an employer should notify an employee of the intention to retire the employee on their contractual retirement date within 6-12 months of the date as this will allow reasonable time for advice regarding people succession and planning, etc. It recommends that the initial notification should be in writing but this should be followed by a meeting at which the employee can be accompanied by a work colleague or union representative.
While the new Code is not legally binding and failure to observe any provision of the Code will not in itself give rise to any liability it is worth noting that the Code is admissible in evidence in proceedings before the WRC, a court or Labour Court and must be considered in any such proceedings. It is therefore most likely that the Code will have significant influence to a WRC Adjudication Officer when faced with such a claim.
Employers should ensure that where employment contracts set out a mandatory retirement age it should consider doing so in line with the age for receipt of State pension as this would undoubtedly address substantial concerns on this issue. Employers should also carefully consider the Codes guidance on longer working procedures as the percentage of workers seeking to continue working beyond their retirement age is predicted to grow significantly and therefore appropriate procedures should be put in place for dealing with such requests.
The Code can be accessed on the link below:
http://www.irishstatutebook.ie/eli/2017/si/600/made/en/pdf
5th February 2018
Anne O’Connell
Solicitors
1-3 Burton Hall Road
Sandyford
Dublin 18
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