Retirement Age and Pensions is a topic of ongoing significance for Employers with European and Irish legislative and case law developments continuing apace.

Important recent legislative developments include:

The Equality (Miscellaneous Provisions) Act 2015 which commenced on 1st January 2016, which amended the rules on mandatory retirement and age discrimination, making mandatory retirement ages objectively justifiable by Employers.

Industrial Relations Act 1990 (Code of Practice on Longer Working) (Declaration) Order 2017 which Code of Practice aims to guide Employers, Employees and their representatives on the best practice in the run-up to retirement, including responding to requests to work beyond the retirement age in the employment concerned.

Most recently, The Equality (Miscellaneous Provisions) Act 2015 which commenced on 1st January 2016, amended the rules on mandatory retirement and age discrimination, making mandatory retirement ages objectively justifiable by Employers. This has been supplemented by the recent Industrial Relations Act 1990 (Code of Practice on Longer Working) (Declaration) Order 2017. This Code of Practice aims to guide Employers, Employees and their representatives on the best practice in the run-up to retirement, including responding to requests to work beyond the retirement age in the employment concerned.

Therefore, while the right of Employers to set a mandatory retirement age still exists, it is now only permitted if:

1. it is objectively and reasonably justified by a legitimate aim, and
2. the means of achieving that aim are appropriate and necessary.

While there is no statutory retirement age in the private sector, it is usual and advisable that the retirement age is set out in as a term in the contract or in the alternative is noted in the Employee handbook or there is a habitual custom and practice that determines same.

It is important for Organisations to be consistent in enforcing their retirement age to correspond with the contract. If an Organisation deviates from this contractual condition, it may set precedence for the future.

Public sector Employees [who commenced since the beginning of 2013] are entitled to remain in employment until they reach age 70 years. The earliest age at which they can retire is 66 years, [to match the State pension age], rising to 67 years in 2021 and 68 years in 2028.

This provokes a ‘pension gap’ for many retirees and is likely to provoke applications from Employees to work beyond the normal retirement age until such a time as their state pension is accessible.

Objective Justification and Legitimate Aim

The Code of Practice requires that compulsory retirement ages 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’. This could include:

• Intergenerational fairness (allowing younger workers to progress);
• Motivation and dynamism through the increased prospect of promotion;
• Health and Safety (generally in more safety critical occupations);
• Creation of a balanced age structure in the workforce;
• Personal and professional dignity (avoiding capability issues with older Employees); or
• Succession planning.

Other measures suggested by the Code of Practice include;

• Providing supports to aid the transition to retirement, e.g. pre-retirement courses, flexible or part-time working or counselling.
• Providing accessible information on retirement procedures at work, both at induction and at regular occasions throughout an Employee’s career.

Notification of Employees

Under the Code, good practice regarding impending retirement involves ‘an Employer notifying an Employee (in writing) of their intention to retire him/her on the contractual retirement date within 6-12 months of that date”.

Written notifications should be followed with a face-to-face meeting which addresses issues such as:

• Clear understanding of the retirement date and any possible issues arising;
• Exploration of measures (subject to agreement) which would support the pathway to retirement, for example flexible working, looking at alternative roles up to the date of retirement;
• Transitional arrangements in regard to the particular post; and
• Assistance around guidance and information.

Procedure for Application for Extended Work

The Code of Practice sets out the procedure to be used by Employers and Employees regarding a request to work longer than the normal retirement age It is important to note that an Employee may be accompanied by a work colleague or union representative to a meeting in respect of this application and any subsequent appeals process:

1. The Employee should make such 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. This meeting gives both the Employee an opportunity to advance the case and allows the Employer to consider it. It is important that the Employee is listened to and that any decision made is on fair and objective grounds.
2. The Employer’s decision should be communicated to the Employee as early as practical following the meeting.
3. Should the decision be to offer a fixed-term contract post-retirement age, the period should be specified, setting out the timeframe, and the legal grounds underpinning the new contract should be made clear (i.e. fixed-term contract). It is good practice to include a reference that the decision is made solely having regard to the case being made by the Employee and does not apply universally.
4. Where the decision is to refuse the request, the grounds for the decision should be set out and communicated in a meeting with the Employee. This will help the Employee to understand why the request has not been granted, and give the Employee confidence that his/her case has been given serious consideration and that there are good grounds.

Organisations must operate within the guidelines of the Code of Practice.

Amending existing retirement policies and procedures and training of relevant personnel should be considered by Organisations consequent on this Code of Practice.