A mandatory retirement age in Ireland has not been established by law, but the majority of employment contracts, including those in the public service, specify a mandatory retirement age of 65. With the Irish courts experiencing an increasing amount of age related discrimination litigation, is the inclusion of mandatory retirement ages in contracts of employment still acceptable in Ireland?
A campaign from groups such as Age Concern, who last year challenged the UK default retirement age in the European Court of Justice (ECJ) as being contrary to the EU Equal Treatment Framework Directive, has prompted a review of mandatory retirement ages. The ECJ ultimately held that a default retirement age was not automatically prohibited by the Directive and it was for domestic courts to “determine whether and to what extent a provision which allows employers to dismiss workers who have reached retirement age is justified by legitimate aims”. The matter was returned to the UK High Court which held that the default retirement age was objectively justifiable. However, the High Court questioned whether 65 could be justified as the default retirement age into the future.
The UK Government recently released a consultation paper containing proposals to abolish their default retirement age of 65 by October 2011. These proposed new rules would allow employers to retain a mandatory retirement age if they wish but it must be a proportionate method of achieving a legitimate business aim.
This issue has arisen before the Irish courts a number of times, most recently in March of this year when the High Court rejected a challenge to the HSE’s mandatory retirement age of 65. In this case the Judge held that the employee’s contract of employment contained an implied retirement age on the basis of custom and practice. Given the recent ECJ decision it appears inevitable that there will be more litigation in this area. Consequently, any employer operating a mandatory retirement age who wishes to avoid the risk of a future challenge should now take the opportunity to examine whether their retirement policy has a legitimate business aim which can be objectively justified, for example, wishing to free up higher level jobs to act as an incentive for younger staff and thus increase competitiveness. It should be noted, however, that any such attempts at justification may be examined by a court or employment tribunal in the case of a challenge and, as such, will have to meet genuine needs of the business in question.
Employers are undertaking health checks on their employment contracts and practices regarding retirement age. If you wish to do so, or have any queries arising from this article, please contact Boyce Shubotham or Catherine O’Flynn.
