Retirement Age Clause in the Employee Contract

Posted in : HR Updates ROI on 20 June 2017
Mags Camody
The HR Suite
Issues covered:

There is no compulsory retirement age in Ireland but many contracts, whether in the private or public sector, can include a retirement age. Where the retirement age is not outlined in the contract of employment, employees are free to work beyond the age of 65 which is generally the age employees are expected to retire in most sectors.

Currently the government is looking at measures to tackle the rising cost of state pensions by aiming towards allowing workers to work beyond their 65th birthday if they want. Laws were introduced in the UK five years ago which make it possible for an employer to make an employee retire only if they can provide a “public interest” reason. This highlights the need to increase the state pension age in line with life expectancy which is rising gradually here. Changes to 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.

In a recent case a barman in Knock airport was awarded €6500 in an age discrimination case. The employee stated that he was fit and well and that there was no reason why he could not continue in the role. In addition to this, the company did not have a policy on retirement age although it was claimed that custom and practice had been that all employees retired at 65. The Labour Court ruled that the barman could not have had any knowledge of the retirement age of 65 years. The Court therefore found that the employee was dismissed by reason of his age and that the dismissal was discriminative. 

This article is correct at 20/06/2017

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Mags Camody
The HR Suite

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