The Employment Equality Acts 1998 to 2011, duly prohibits discrimination in the work place on the grounds of age, however, section 34 (4) of the said Acts, expressly provides that “it shall not constitute discrimination on the age ground to fix different ages for the retirement ….of employees or any class or description of employees”. Irish employers have thus relied on this provision in order to allow them to successfully terminate the employment of employees who have reached the age, as clearly set out for retirement in their contracts of employment.
The certainty to Irish employers of relying on this provision has recently been diminished due to European directives which now state that such retirement policies are only allowable on the basis that the employer can objectively justify the necessity for same. While Ireland has not, to date, amended it’s Equality legislation and still retains the aforementioned section 34 (4) exception, the effectiveness of this has been watered down by recent decisions of the Equality Tribunal in this area. The Equality Tribunal clearly set out in it’s decisions that section 34 (4) can no longer be relied upon as a blanket exemption and in addition to setting out a compulsory retirement age in contracts of employment and policy documents, Irish employers must also objectively justify these said ages in line with article 6 (1) of Council Directive 2000/78/EC.
In the case of Saunders v CHC Ireland Limited DEC-E/2011-142, the Equality Officer duly stated in his decision that in light of the European directive, the employer had to satisfy the Officer that the retirement age in their contracts of employment (which in this case was 55 years of age) was objectively justified. The employer, on the facts of the case, was in a position to do this taking into account that the role in question required a certain physicality. In this regard, the Equality officer was satisfied that the compulsory retirement age was necessary to protect the Health and Safety of the employees and indeed people they served and the means of achieving that aim was appropriate in the circumstances.
In a further Irish Equality decision of Harte v Q Park Ireland Limited DEC-E/2012-119, the Equality Officer in that case decided that in light of the European directive, the Respondent had indeed discriminated against the employee on grounds of age by imposing a compulsory retirement age that could not be objectively justified. Following this, the respondent was ordered to discharge the sum of €15,000.00 to the claimant in compensation.
On foot of this, all Irish Employers, in addition to clearly setting out any compulsory retirement ages in their employment documentation, must now also be in a position to objectively justify the necessity for same in order to rebut any challenges that may be brought by disgruntled employees. Such justifications will be case specific and will of course differ in accordance with what ever industry the employer is involved in. It is however, to be noted that the following justifications have been accepted by the Court of Justice of the European Union (CJEU) and indeed the Equality Tribunal, as legitimate objectives relating to compulsory retirement ages:
- Creating opportunities in the labour market
- Protecting Health and Safety
- Ensuring motivation and dynamism through increased prospect of promotion
- Facilitation of workforce planning
- Pension arrangements
- Avoiding disputes relating to the employee’s ability to perform their duties beyond the age of 65
- Sharing employment between generations.
Of course, employers need to be cognisant that such objectives must be relevant to their particular industry and not just relied upon as a means to “back up” a compulsory retirement age.
Thus, to summarise, Irish employers must now, objectively justify the reason for any compulsory retirement age and must duly consider whether there is an alternative to such a policy. If not, they must consider why they have chosen that age and whether it achieves their legitimate aim and if they have sufficient evidence to back this up. Taking into account that in January 2014 the State pension age will increase from 65 to 66, such cases are likely to become more frequent and Irish employers should make sure that they are adequately prepared in the defence of same.