Prior to the commencement of the Act, Section 6 of the Employment Equality Acts 1998 - 2015 provided that offering a fixed term contract to employees over the compulsory retirement age did not constitute discrimination on the grounds of age.
Section 6 of the Employment Equality Acts has now been amended to read as follows:
Offering a fixed term contract to a person over the compulsory retirement age for that employment or to a particular class or description of employees in that employment shall not be taken as constituting discrimination on the age ground if—
(i) it is objectively and reasonably justified by a legitimate aim, and
(ii) the means of achieving that aim are appropriate and necessary.”
This is a noteable change for employers, given fixed term contracts post retirement are used with greater frequency since the increase in the State pension age. In providing objective justifications for the fixed term contract an employer should not rely upon the same justifications as those provided for the contractual retirement age as this may result in undermining the contractual retirement age.
Consideration should be given by all employers to objectively justifying both their contractual retirement age, and a fixed term contract if one is provided post contractual retirement age. The means of achieving the aim must be both appropriate and necessary. Employers should ensure they have a retirement age written into their contracts of employment and engage with their employees well in advance of their retirement age.
In terms of ensuring compliance with the revised legislation and a strong defence to any potential claims of age discrimination arising from the use of a retirement age, employers should ensure they have more then one objective justification for the company retirement age.
Retirement ages and the implications of the Act for employers will be covered extensively at the Ibec Employment Law Conference 2016.
Thursday, 28 April 2016