Unlike many other EU jurisdictions, there is no statutory retirement age in the private sector in Ireland, with retirement related issues being regulated instead by employment contracts. Private sector employers in Ireland are permitted to set mandatory retirement ages provided they are objectively and reasonably justified.
Late last year, Sinn Féin TD, Deputy John Brady introduced the Employment Equality (Abolition of Mandatory Retirement Age) Bill 2016 (the “Bill”) to Dáil Éireann with the aim of amending the Employment Equality Act 1998 to abolish mandatory retirement ages in the workplace. Typically, an opposition Bill would not be expected to proceed past the initial legislative stages, but a greater number of these types of Bill are now progressing due to the current minority Government arrangements. In this instance, the Government has indicated that it supports the Bill in principle, while voicing concern that there are technical issues with the Bill as drafted.
When introducing the Bill, Deputy John Brady commented “age should not determine whether someone can do their job. The Bill is about giving people a choice“. The William Fry “Age in the Workplace” Report 2016, found that while only 48% of employers have a mandatory retirement age in place, many rely on individuals retiring when they reach the ‘normal retirement age’ of the organisation, typically 65. However, the Report also highlighted that 63% of employees over 55 want or believe they will have to work past the age of 66.
In addition to abolishing mandatory retirement ages, the Bill also seeks to resolve certain pension issues whereby employees required to retire at 65 (or younger) have no option but to sign on for jobseekers allowance until they reach the qualifying State pension age (currently 66). It proposes to give employees who have insufficient pension contributions the option to remain in the workforce to build up additional contributions if they so wish.
However, it is worth noting that a similar Bill which sought to end mandatory retirement ages was proposed in 2014 by the then Labour TD, Deputy Anne Ferris and failed to progress beyond initial Dáil discussions. As in 2014, the Government has warned that there are technical problems with the Bill as drafted and it raises serious policy and expenditure issues that will need to be considered.
It also appears that the Bill is intended to apply retrospectively to pre-existing contracts of employment which could have complex implications. Furthermore, the Government has warned of significant cost implications as the Bill seeks to allow financial incentives to be offered to employees to cease work at any particular age.
The Bill will now progress to the Oireachtas Select Committee on Justice and Equality. While Sinn Féin has welcomed the unanimous cross-party support for a change in the law, it is likely that the Bill will need to be significantly amended if it is to reach enactment. We will provide further updates in respect of the progress of this Bill through the Houses of the Oireachtas.
Contributed by Catherine O’Flynn
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