Retirement is a fundamental headline employment issue in light of the recent increase of the state pension age from 65 to 66, and the impending further increases to 67 and 68 in 2021 and 2028 respectively. The issue of retirement is one which comes up regularly for employers and has attracted much recent attention due to case law.
There is no single fixed mandatory retirement age for employees in Ireland. An employee’s contractual retirement age is an entirely separate issue to the age at which employees are entitled to draw down their state pension. An employer, is lawfully entitled to set individual retirement ages in the contract of employments. An employer is permitted to retire an employee on reaching a set retirement age if this age is clearly outlined in the contract of employment and can be objectively justified.
Your company retirement age should be set out in the contract of employment. Your retirement age can correlate to the state retirement age (currently 66) or the retirement age specified in any pension scheme, if in place. There is a retirement age set by law for some public servants. Firefighters and Gardai for example have earlier retirement ages.
A recent case in the Workplace Relations Commission ordered RTE to pay a former employee €50,000 due to broadcaster discrimination against on age grounds. The employee reached retirement age of 65 as per RTE retirement policy in 2016 and her contract was terminated. At the time she had two contracts of employment in place with two separate sets of terms and conditions of employment. Her permanent contract was ended in line with the retirement clause.
The other contract commenced in 2003 and was a casual/irregular contract. The employee was rostered for one week every six weeks but “there was nothing definite”. After her permanent contract was terminated the employee went abroad for some months and when she returned RTE informed her that her casual contract had also terminated.
When the case was being heard by an Adjudication Officer it was noted that there was a number of people rostered on this programme of whom too were over 65. This pointed out that the retirement policy was not a ‘one fits all’ and in fact people were working beyond 65 years of age. The Adjudication Officer ruled that the employee had been discriminated against on the basis of her age in relation to the termination of her casual/irregular contract of employment.
The learning to take from this case is that although the retirement age is stated in the contract it is only as good as what is in practice and the policy is deemed null in void.
Your company retirement age should be set out in the contract of employment. Your retirement age can correlate to the state retirement age (currently 66) or the retirement age specified in any pension scheme, if in place. There is a retirement age set by law for some public servants. Firefighters and Gardai for example have earlier retirement ages.
If the contract of employment sets out a retirement age, for the workplace in general, or for different roles in the organisation, then it is important that this is adhered to. Any redirections away from the policy could create a custom and practise for future retirees and future adherence to the policy may be difficult and give rise to an allegation of discrimination.
If you require further information, please do not hesitate to contact us on 066 7102887 or visit www.thehrsuiteonline.com for more information.
Caroline
