19 January 2024
The most recent Workplace Relations Commission (‘WRC’) Annual Report reported a 176% increase in the number of age-related discrimination complaints (increasing from 186 complaints to 514 complaints from the previous year). While the report does not go as far as to isolate the exact nature of these claims beyond age-related discrimination, a review of the most recent cases within this category reflects a continued trend of challenges to mandatory retirement ages.
The Employment Equality Acts 1998-2015 (the ‘EEA’) prohibit discrimination on any of the nine protected grounds (gender; civil status; family status; sexual orientation; age; disability; race, colour, nationality, ethnic or national origin; religious beliefs; membership of the Traveller community).
The EEA cover direct discrimination and indirect discrimination. Direct discrimination occurs where one person is treated less favourably than another person is, has been or would be in a comparable situation on any of the above nine protected grounds.
Indirect discrimination occurs where an apparently neutral provision or practice has the effect of putting one person at a particular disadvantage when compared to another person, on any one of the nine protected grounds, unless that provision or practice is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary.
The imposition of a mandatory retirement age by an employer, is a form of direct discrimination i.e. a company policy requiring that all employees retire upon reaching a certain age is a termination of employment based solely on the protected ground of age. Section 34(4) of the EEA, however, provides a statutory exception to the prohibition on discrimination in respect of fixing different ages for retirement if:
Awards of compensation in age discrimination cases can be relatively high - two WRC decisions on age-related discrimination issued in November 2023 reflect awards of €20,000 and €25,000. These awards were based on the employees’ successful challenges to their former employer’s retirement policies which the Adjudication Officers found had discriminated against employees, for failing to be in compliance with s34(4) of the EEA.
Employers can successfully defend these type of challenges by objective means including reliance on an appropriate and necessary retirement policy and complying with the WRC’s Code of Practice on Longer Working. We take an in-depth look on the right and wrong approaches taken by employers in implementing a mandatory retirement policy and defending age-related discrimination claims.
In March 2023, the WRC published its decision in the case of an employee alleging age-related discrimination against its previous employer, the Respondent engineering company. The Respondent’s retirement policy was based on the age of 66. The Claimant employee began working for the Respondent in October 2019, at which point he signed and returned his contract of employment, which stated the Respondent company’s retirement age was 66 years of age.
The Claimant also received a copy of the Respondent’s ‘Employee Policies Handbook’ which included the Respondent’s retirement policy in further detail. This was acknowledged as received by the Claimant by signature upon commencing employment.
The Respondent had a HR practice of notifying employees reaching retirement age, six months prior to them reaching the age of 66. The Claimant was only notified three months prior to his retirement age. It was agreed between the parties that the Claimant would continue working with the Respondent for a further seven months on a fixed term contract. The Claimant alleged he received assurances the fixed-term contract would be renewed after the seven month term. The fixed-term contract was not renewed, and the Claimant filed a claim in the WRC alleging discrimination on the basis of his age.
The Respondent alleged in written submissions and through oral evidence that the retirement was strictly imposed on technicians due to the nature of the technicians’ work. The Respondent provided safety data sheets related to the chemicals used by the Respondent, which the technicians worked with daily, lifting products in and out of large chemical baths.
The Respondent’s position was that the fixed retirement age served a legitimate aim in ensuring the health and safety obligations of the Respondent were upheld. The Adjudication Officer in his decision agreed with the Respondent stating “I cannot overlook the evidence… in relation to the demands and dangers of the actual process. From a health and safety perspective I conclude that the policy of retirement at 66 years of age is justified and that the Complainant was not the victim of discrimination.”
While the Adjudication Officer ultimately found the health and safety considerations of the Respondent were justified, appropriate and necessary, it is worth noting the additional steps taken by the Respondent in ensuring the Claimant was aware of the policy at the outset of his employment. The Respondent also relied on the inclusion of the retirement age in the contract of employment, and proof of the provision of the employee handbook to the Claimant, both of which were acknowledged by the Claimant’s signature.
In a more recent case, published in November 2023, an employee of a telecommunications company was successful in claiming age-related discrimination.
The Claimant commenced employment with the Respondent employer in September 2019 as a Desktop Support Agent. The Respondent implemented a change in retirement policy to align with their pension schemes in April 2020. The Claimant was notified of his upcoming retirement in January 2023, which was due to take effect on 1 July 2023. The Claimant submitted a formal request to work beyond his 65th birthday. The outcome of a meeting between the Claimant and the Respondent’s internal HR, was to deny the Claimant’s request. The Claimant participated in an appeal hearing which upheld the original decision not to extend the retirement age.
The Respondent argued that its retirement policy was objectively and reasonably justified. The justification related to: the need for promoting intergenerational fairness; the need for succession planning; the importance of maintaining age balance in the workforce; and to uphold the individual dignity of an employee, especially in a ‘safety critical role’.
The Adjudication Officer, in considering all arguments made by the Respondent, held that the decision to refuse to allow the Claimant to work beyond 65 was not objectively justified on any of the grounds set out in the Respondent’s retirement policy, given his specific role and the nature of it. The adjudication officer found that the Claimant had been discriminated against, and that the Respondent had failed to rebut the presumption of discrimination, failing to act in compliance with s34(4) of the EEA.
The Adjudication Officer also noted the fact that at 65, the Claimant had a limited skillset, he was still seeking work as of the date of hearing, and was in receipt of a social welfare payment, having not yet reached the current State pension age.
In a rare outcome for a successful discrimination case before the WRC, the Adjudication Officer made no monetary award, instead ordering that the Claimant be re-instated in his previous role with effect from the date of his retirement. The Adjudication Officer noted no additional award of compensation was being made due to the fact the Claimant sought re-instatement or re-engagement only.
While there is no mandatory retirement age in Ireland, an employer may stipulate a retirement age provided that the age selected can be objectively justified. A retirement age may be stipulated in an employee’s contract of employment (it can also be an implied term of the contract), or stated in an employment handbook or policy statement given to employees, or it can exist by way of custom and practice of the employer.
The WRC’s Code of Practice on Longer Working is a useful guide for employers dealing with issues relating to retirement, including guidance on dealing with employee requests to work beyond an employer’s retirement age, and factors to be taken into account to objectively justify a mandatory retirement age.
As noted in our previous article on Workplace Relations Commission Claims, the introduction of public hearings and named party decisions has brought increased public interest with mainstream media regularly publishing WRC decisions of note. The potential cost and publicity associated with a WRC claim alleging age-related discrimination can be avoided. We advise all employers, whether considering the introduction of a mandatory retirement age, or those with existing retirement policies, to seek legal advice to ensure the policy is in line with legislative requirements, recent caselaw and the WRC Code of Practice on Longer Working.
Our Employment Law team, led by Aoife Newton, can advise on every stage of the employment process. Please contact a member of the team for more information.
