Since the change in the qualification age for the state pension to 66 in January 2014, the issue of mandatory company retirement age (traditionally 65 in many organisations) has become an even more complex issue. It has contributed to an increase in the number of workers seeking to remain in their jobs beyond retirement age, a trend likely to continue given that the state pension age is set to increase further to 67 in 2021 and to 68 in 2028.
The change in the state pension age to 66 is also thought to be at least partially responsible for a rise in the number of age related discriminatory dismissal claims taken by employees wishing to work beyond their contractual retirement age.
In January 2016, the Equality (Miscellaneous Provisions) Act 2015 commenced. This Act amended Sections 6 and 10 of the Employment Equality Acts 1998 to 2015 (“the Acts”), placing the requirement to provide objective justification for your company’s retirement age on a statutory footing.
In August 2016, the Minister for Public Expenditure and Reform, Paschal Donohoe published the Report of the Interdepartmental Group on Working Fuller Lives. The Report included a number of recommendations; two of the recommendations are of particular interest to employers.
The first of these recommendations was a request to the Irish Human Rights and Equality Commission (“IHREC”) from the Department of Justice and Equality to ensure that appropriate guidance material is made available for employers on the use of fixed-term contracts beyond normal retirement age.
A further recommendation of interest to employers was the request from the Minister for Jobs, Enterprise and Innovation to the Workplace Relations Commission to prepare a Code of Practice under Section 42 of the Industrial Relations Act 1990 around the issue of longer working lives. According to the Report, the Code of Practice should set out best industrial relations practice in managing the engagement between employers and employees in the run up to retirement, including requests to work beyond what would be considered the normal retirement age in the employment concerned.
The Workplace Relations Code of Practice on Longer Working was finally published at the end of 2017.
The Code includes advice for employers on responding to requests from employees seeking to work beyond the company retirement age.
Reflecting the provisions of the the Equality (Miscellaneous Provisions) Act 2015, the Code reminds employers that any mandatory company retirement age must be capable of objective justification both by the existence of a legitimate aim and evidence that the means of achieving that aim is appropriate and necessary. The Code cites some examples of what case law have found to be legitimate aims including inter-generational fairness, success planning, health and safety (for health and safety critical operations), dignity (avoiding capability issues with older employees).
When an employee is approaching retirement, the Code advises that it is good practice for an employer to notify an employee of the intention to retire him/her on the contractual retirement date within 6-12 months of that date thereby allowing sufficient time for planning and arranging advice on succession. In addition, the Code sets out the procedure to be used by both sides when dealing with a request to work beyond the normal retirement age. For example, it requires an employee to make a request in writing no less than three months from the intended retirement date to be followed up with a meeting between the employer and employee. The Code further provides that an employee should be given the option of being accompanied to a meeting by a work colleague or union representative to discuss a request to the employer to facilitate working longer and in any appeals process around same.
In preparing the Code, the WRC consulted with Ibec, ICTU and relevant Government Departments.
The Code, which can be accessed here, is intended to be used as a tool to guide employers, employees and their representatives on the best practice in the run-up to retirement.
Thursday, 25 January 2018