The Equality Act 2015 and Retirement

Currently in Ireland, there is a statutory retirement age for some public servants only. In other sectors including the private sector there is no legal mandatory retirement age but it is common practice for retirement ages to be set out in the contract of employment.

Generally retirement age is often stated as 65 in contracts of employment which was in line with State Retirement Age – although this increased to 66 since January 2014.

Considering this, those that would have availed of the full contributory pension of €230.30 a week from the age of 65, instead have to apply for jobseeker’s allowance, which is paid at a rate of €188 a week.

More increases in the qualifying age for the State pension are due to come into effect over the coming years. It will increase to 67 years in 2021 and to 68 years in 2028.

The Equality Act 2015 came into effect on 1 January 2016 to align Irish legislation with European law regarding retirement ages. This amends the Employment Equality Acts 1998 – 2015 and outlines that employers must objectively justify their mandatory retirement age going forward.

The Act reflects what has been the position in Europe for a number of years.

Prior to the commencement of this Act, it was acceptable for fixed term contracts to be offered to employees once they reached retirement age. 

Section 6 of the Employment Equality Acts 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 include the following:

“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.”

With these changes, employers must now justify both their contractual retirement age, and a fixed term contract if one is provided post-contractual retirement age.

Each case must be considered on its own merit when requests are made. This will no doubt make it difficult for employers to endorse their normal retirement age.

Some of the reasons that have been accepted by the courts for declining these requests include succession planning and giving younger staff the opportunity to move through the ranks.