by Anne Lyne January-13-2015 in Employment Law
The “black hole” in many private pension schemes, when taken with the fact that people are living longer, means that it is now a reality that many people will seek to work beyond the traditional retirement age of 65. In these circumstances, what right does an employee have to break the grey ceiling and continue working into his or her golden years?
Currently, there is no compulsory retirement age in Ireland. This means that an employee has a right to work regardless of their age. For those working in the public sector, certain statutory retirement ages may apply. For all other employees, the Employment Equality Acts 1998-2011 provide Irish employers with discretion on fixing compulsory retirement ages. This means that, on the face of it, if there is a clear retirement age, the employer can rely on “retirement” as a defence to an age discrimination claim.
But if the employee works beyond the retirement date, or if there is no express contractual retirement age, there is a strong argument that any attempt to arbitrarily retire an employee by reason of retirement would be deemed discriminatory on grounds of age. A claim, if well founded, can be costly for an employer where the Acts provide for awards of up to two years’ gross remuneration or direct that an employer take a certain course of action.
The question of whether this imposition of a blanket mandatory retirement age is permitted under EU law has been the subject of litigation in numerous contexts in recent years. The case law is giving employees the right to work beyond a traditional retirement age where they can objectively justify their position. This has inevitably led to challenges to the legality of the existing Irish retirement provisions, and a number of high profile cases seem to offer conflicting approaches.
In the landmark Palacios case in 2007, for example, the European Court of Justice (“the ECJ”) held that compulsory retirement clauses set by law were discriminatory on grounds of age and could only be objectively justified in certain circumstances.
One year after the Palacios decision, the Irish High Court in Donnellan held that “any discrimination with regards to age must…serve a legitimate aim or purpose and the means taken to achieve that purpose must be appropriate and… proportionate.” Here, the court held that the 1996 Garda Siochana (Retirement) Regulations, which fixed a compulsory retirement age of 60 for members of the Garda Siochana, were proportionate and served a legitimate aim. But the court made it clear that any comments made turned wholly on the specific facts of the case and should not be taken as supporting the general legitimacy of all mandatory retirement ages.
In 2012, the Equality Tribunal had to decide whether a mandatory retirement age of 65 for a graphic designer, employed by ESB, was objectively justifiable. The Tribunal looked at the ESB’s main aim of building and maintaining electricity infrastructures and accepted that the nature of the work would lead to legitimate health and safety concerns in relation to older staff members. Even though these concerns would not apply to a graphic designer, the Tribunal held that the ESB was entitled to maintain a blanket retirement age to ensure cohesion among all of its employees.
The following year, the Tribunal was faced with a complaint by a bar equipment service manager who claimed that a retirement age of 65 was discriminatory. The complainant’s employer was successful with its contention that it was the practice to retire staff at the age of 65 so as to create certainty in business planning, and encourage staff morale, by using the consequential vacancy as a promotional opportunity.
This decision can be contrasted with the Tribunal’s finding in the 2014 Thomas O’Mahony case. The Claimant drove doctors to treatment centres and home visits. The Tribunal found that there was no justification in fixing a retirement age at 65 because the company was not trying to retain younger people or plan for succession; it was simply trying to reduce headcount in the least expensive way. Other issues that were looked at included that there was not a significant age mix. The Health and Safety defence commonly used by employers was not accepted in this case.
It is clear that the Irish courts have moved away from accepting carte blanche that mandatory retirement ages are automatically non-discriminatory. An employer, it would seem, may be allowed to impose a blanket retirement age but caution is advised. Larger organisations with a mixed work type may be most at risk, where it may be justified to have different retirement ages. The situation is not satisfactory for employers. Alternatives may include offering fixed-term contracts or “red-circling” employees for extension of employment - but these options are not silver bullets.
There is very much a legal grey area around the grey ceiling. But what is clear is that there is opportunity for those who feel that age is just a number and who are not yet ready to step off the career ladder.
If you require advice or assistance with this issue, please contact Anne Lyne on our employment team at alyne@hayes-solicitors.ie
This article appeared in the Sunday Business Post on Sunday 11 January 2015.
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About the Author
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Anne Lyne
Anne is a partner in the Employment team at Hayes solicitors. She has considerable experience advising and representing employers and employees on all aspects of the employment relationship from pre-employment matters to termination.