An Employee Wants to Work Past the Company’s Retirement Age of 65 - How Do I Handle It?

An employee recently approached me as he wants to work past the company’s retirement age of 65, as he feels fit and healthy and isn’t ready to retire. I don’t want to compromise our normal retirement age by making an exception for this worker, so I’m inclined to deny his request. How do I Handle it?

The area of retirement ages has been a hot bed of activity for the past decade. Numerous cases have shaped current law in the area and led to amendment in the Employment Equality Acts in 2015 and the publication of the Code of Practice on Longer Working (S.I. 600/2017) by the Workplace Relations Commission.

Section 34(4) of the Employment Equality Acts 1998-2015 provides that an employer must establish the following:

• That there is a contractual retirement age that forms part of the terms and conditions of employment
• That the policy is objectively and reasonably justified by a legitimate aim, and
• The means of achieving that aim are appropriate and necessary.

The burden of proving that a retirement age is objectively justified lies with the employer. 

Examples of a Legitimate Aim include:

• Intergenerational fairness
• Motivation and dynamism through the increased prospect of promotion
• Health and safety
• Creation of a balanced age structure in the workforce
• Personal and professional dignity
• Succession planning.

Code of Practice on Longer Working

The Code of Practice on Longer Working sets out best practice for employers with regards to engagement with employees in the run-up to retirement and responding to longer working requests. It sets out that employers must be prepared with regard to:

• Managing requests from people to continue to work beyond what would have been regarded as the normal retirement age.
• Developing employment practices and procedures appropriate to increasingly age diverse workplaces that encourage retention of older workers and longer working lives; and
• The changing statutory and legal framework in regard to retirement and pension entitlements.

The Code of Practice provides that the current law on compulsory retirement ages is that they 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. Otherwise, the termination of an employee because of their age could be construed as age discrimination.

Requests by employees, approaching retirement, should therefore be considered very carefully by employers. Case-law has shown that each request should be considered on its own facts and employers must be able to provide an evidential basis for legitimate aim examples used to deny a request for longer working. . For example, if an employer submits that the company has a mandatory retirement age of 65 to allow for intergenerational fairness and succession planning, they should have proof that younger staff are promoted and hired.

In the recent case of Brendan Beirne v Rosderra Irish Meats Group ADJ00027036, the Respondent company had a compulsory retirement age of 65. The Respondent had their compulsory retirement age in all contracts (including the complainant’s) together with a collective agreement which provided for a retirement age of 65. The Complainant’s request to continue working beyond the age of 65, on the basis that he was fit and healthy, was refused.

In considering the age discrimination claim taken under section 77 of the Employment Equality Act 1998, the Adjudication Officer had regard to the objective grounds and legitimate aims offered by the respondent employer which were as follows:

• Ensuring the health and safety of the workforce and of those persons utilising the organisation’s services.
• Ensuring consistency among all employees in relation to retirement.
• To create certainty in succession planning; to ensue cohesion in the workforce.   
• To ensure a uniform retirement age.
• To ensure that there is an age balance in the workforce and
• To free up jobs so that younger workers can enter to the workforce and younger workers have an opportunity for advancement/promotion.

It was noted by the Adjudication Officer, that there was no evidence that any of these reasons were put to the complainant at any stage. There was no consultation or negotiation process with the complainant and there was no evidence that the respondent ever adhered to the Code of Practice on Longer Working.

The Adjudication Officer held that an employer should provide the specific objective reasons to an employee as to why their request for longer working is being refused – otherwise the social policy on longer working would be rendered useless. He was satisfied that the respondent relied exclusively on the employment contract and the collective agreement in enforcing its retirement age against the complainant. Therefore, the Adjudication Officer determined that the complainant was discriminated against on the age ground and was awarded €30,000 in compensation.

Companies should be very careful to follow the guidelines set down in the WRC Code of Practice on Longer Working when employees make a formal request to work beyond their mandatory retirement age.

The Procedure

The Code of Practice sets out the procedure for how the parties should engage during a request for longer working. The procedure is as follows:

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 allowing 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 there granted and give the employee confidence that his/her case has been given serious consideration and that there are good grounds for refusing the request. The applicant should have recourse to an appeals mechanism, for example through the normal established grievance procedures in the organisation.
5.  An employee may be 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.

Conclusion

This recent case highlights the importance of employers utilising the Code of Practice for Longer Working, even where there is a contractual retirement age in place. Adherence with these guidelines can allow a seamless company-wide process and hopefully avoid WRC claims into the future. Furthermore, it is crucial that employers are able to objectively justify retirement ages and be in a position to provide evidence that legitimate aims are acted upon.

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