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WRC Finds Mandatory Retirement Age Was Justified

Liam Murphy v Deepak Fasteners (Shannon) Ltd (ADJ-00040284) concerned a Workplace Relations Commission (“WRC”) case under the Employment Equality Acts 1998-2015 (“the Acts”). This case alleged age discrimination in circumstances where the Complainant wished to continue working beyond the age of 65 and his employer refused, enforcing a mandatory retirement age.

Facts: The Complainant worked for the Respondent employer from February 1977 to February 2022. He was employed as a General Operator. He submitted to the WRC that he enjoyed good health and he was confident that he had value in the workplace beyond the age of 65. The Complainant had commenced an internal process in November 2021 to request to work beyond his 65th birthday. However this was denied by the Respondent employer on a number of grounds outlined in a letter dated 18th January 2022; these grounds included that his work was of a labour intensive nature, health and safety concerns, the fact the company’s normal retirement age is 65 and that the Respondent wished to encourage the promotion of younger people in the workforce.

The Complainant submitted a number of arguments to the WRC against the Respondent’s reasoning for refusing to allow him to work beyond 65. Among other things, it was argued by the Complainant that the Respondent did not carry out a risk assessment to determine whether he could continue to do his role before refusing his application. The Complainant also submitted that older employees are an asset to any company given their knowledge and experience and argued the Respondent’s espousal of intergenerational fairness to justify their mandatory retirement age was not supported by the facts of the case. Furthermore it was argued that the Respondent had not backfilled the post left vacant by the Complainant and is deriving a cost saving from his retirement.

It was the Respondent’s position that while most individual contracts of employment were silent on a normal retirement age, those that do mention it state it to be 65 and no one ever worked beyond the age of 65.

The Respondent drew the WRC’s attention to an agreement in place since 1990 between management, the trade union and employees which states “employees will be required to retire from the Company’s service upon reaching the age of sixty-five (65) years in accordance with the terms of the Pension, Life Assurance and Disablement Benefits Schemes.”. While this was negotiated with the Complainant’s old employer, it was submitted that the Complainant transferred to the named Respondent (pursuant to a sale of assets by the old employer) with the same terms and conditions by virtue of the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (known as the “TUPE regulations”).

The Respondent submitted that one of the conditions of the sale at the time was that an employee defined benefit pension scheme be set up to mirror the existing employee pension scheme of the Complainant’s previous employer and this was done. It was pointed out that the rules of that scheme also state the normal retirement age is 65.

In addition, the Respondent’s evidence was that the company had contributed to the Complainant’s pension at a rate of 10.6% of gross pay and this was accessible to him from the age of 65 and that the Complainant also qualified for the guaranteed social welfare payment for people over 65 to cover him up to the state old age pension which he qualified for at 66. The Respondent submitted that this combination of pension and social welfare payments cannot be regarded as unreasonable.

In response to the Complainant’s assertion that the Respondent made assumptions about his capacity, the Respondent argued that they did not need medical evidence on this point, that it is accepted age affects the ability of persons to do physically demanding work. It was submitted that two employees suffered life changing injuries working on similar machines in the past and that serious care is required in the role. There was also a reference to the Complainant having required light duties for a period but there was dispute around the details of this.  

The Respondent made a number of other arguments in its defense including submissions around the age profile of its workforce (an older workforce) and the need to ensure that the Company did not reach a “cliff edge” where numerous employees retired at the same time without that knowledge having been passed on to a younger cohort. The Respondent also made submissions around its financial status, a need to diversify and a need to hire new staff in order to do so. The Respondent made submissions around not being in a position to hire new staff while at the same time keeping others on past retirement age.

The WRC decision outlines in detail numerous submissions made by both parties in this case and the above represents a summary of just some of the arguments made. 

Decision: It was noted by the WRC Adjudicator, Ewa Sobanska, that in Ireland there is no compulsory retirement age. However, section 34(4) of the Acts permits an employer to fix a retirement age where it is objectively and reasonably justified by a legitimate aim and where the means used to achieve that aim are proportionate and necessary. The Adjudicator referred to the High Court case Donnellan v The Minister for Justice & ors, where McKechnie J held the imposition of a retirement age should be individually assessed. It is worth noting the Supreme Court recently issued an important judgement in this area in the case of Seamus Mallon v The Minister for Justice, Ireland, and The Attorney General. We refer to our previous article on this case last month. That Supreme Court case suggests a move away from the thinking in Donnellan around the issue of individual assessment and confirmed that in fact the law does not presumptively require case by case or role by role assessment. However, this WRC decision was finalised just before the delivery of the Supreme Court judgement in Mallon. Nevertheless, even in the absence of sight of the Mallon decision (which in all likelihood would have assisted the Respondent more than the Complainant in this case) the WRC Adjudicator found in favour of the Respondent.

Ultimately the WRC Adjudicator did not uphold the complaint. She noted that there was no dispute that a retirement age was provided for in the agreement established through collective bargaining in 1990. The Adjudicator was satisfied that the agreed retirement age was an implied term of the Complainant’s contract of employment and that its existence was known or ought to have been known to the Complainant. There were shortcomings identified on the part of the Respondent as it did not follow the Code of Practice on Longer Working, the Respondent held no meeting to allow the Complainant to advance his arguments before a decision was made and the Complainant was not granted a proper appeals process. However, the Adjudicator nonetheless took the view that the Respondent applied the retirement age consistently and accepted that the role was physically demanding. While the Respondent had not carried out a risk assessment, the Adjudicator noted that both the Labour Court and Court of Justice of the European Union accept that physical capacity deteriorates with age. The Adjudicator considered the various objective justifications for the retirement age that had been outlined by the Respondent including succession planning, age balance, health and safety concerns, the encouragement of recruitment and promotion of young people and held the Respondent’s retirement policy was justified by legitimate aims achieved through appropriate means.

Takeaway for Employers: Employers should pay close attention to their retirement policy and ensure they are familiar with the guidance outlined in the Code of Practice on Longer Working (linked below). While in this case the employer did not follow the Code of Practice and this did not result in a WRC award against them, the employer was still criticised for their shortcomings in not following it.  

It should be noted that there appears to have been a lot of facts in this case that were supportive of the objective justification for the mandatory retirement age having been legitimate and proportionate. An employer in another case may find themselves in more difficulty having not followed the Code of Practice.  

The key takeaway an employer must remember is that a mandatory retirement age needs to be objectively justified by a legitimate aim and the means of achieving that aim must be proportionate. Otherwise an employer runs the risk of a mandatory retirement age being deemed as discriminatory. Employers should also always do their best to follow the Code of Practice on Longer Working.

WRC Linkhttps://www.workplacerelations.ie/en/cases/2024/may/adj-00040284.html

Code of Practice: https://www.irishstatutebook.ie/eli/2017/si/600/made/en/pdf

Authors – Tara Kelly and Laura Killelea

28th June 2024

Anne O’Connell Solicitors

19-22 Lower Baggot Street, Dublin 2


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