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Irish Pensions Magazine Autumn 2016
18
Analysis
Employment Law Update - How does an Employer
Objectively Justify a Mandatory Retirement Age?
Employers can establish a mandatory retirement
age for employees but such ages must be capable of
being reasonably and objectively justified if they are
challenged by employees as being discriminatory on
grounds of age. We review criteria considered in case
law which employers can rely on to demonstrate that
the setting of a retirement age is objectively justified.
Employers often question what constitutes objective
justification of a retirement age as there is no clear
statutory guidance on this point. Instead, many of the
objective justification ‘tests’ have been set out in case
law both from the Irish court and the Court of Justice of
the European Union.
Ideally, in advance of setting a mandatory retirement
age, or reviewing a mandatory retirement age already
in place, employers should consider the criteria for
objective justification considered in recent case law,
with a view to determining if it is capable of being
objectively justified.
1) Health and safety concerns
Courts have found it justifiable to have mandatory
retirement ages for employeeswhowork as drivers, pilots
and in jobs which are physically demanding. However
not every working environment carries with it the same
risks to health and safety. Therefore an employer would
need to be in a position to demonstrate by way of a
hazard identification and risk analysis exercise that
they have evaluated their particular work environment
in setting a mandatory retirement age, rather than
simply following a historically established retirement
age. This is particularly relevant in places of work where
technological innovations might have resulted in work
becoming less physically demanding.
2) Succession planning
Employers need to plan for the future in order to
ensure that they have the right people in place with the
requisite skill sets and experience to support the activity
of the organisation at a future point in time. Mandatory
retirement ages have been held to promote this aim
by facilitating the retirement of older employees which
opens up opportunities for younger employees who
may have differing skill sets and experience.
3) Establishing an age balance in the work-
force
Mandatory retirement ages when used to establish a
balanced level of experience in an organisation has
been found by courts to be objectively justified because
it provides an organisation with a wider mix of skill and
experience and allows for the recruitment of people
with newer and differing skill sets and experience.
4) Encourage the recruitment and promo-
tion of younger people
Courts have accepted arguments from employers
that a mandatory retirement age was necessary to
encourage employees to stay with, and progress within
an organisation and to motivate employees by the
prospect of being promoted into more senior roles.
Terminating the employment contracts of employees
who have reached retirement age makes it easier for
other workers to find work. This justification can be
supported by national employment policies such as
stimulating the labour market, reducing unemployment
and vocational training objectives.
Conclusion
Employers should note that in determining if a
mandatory retirement age is discriminatory on the age
ground that Courts approach each matter on a case-
by-case basis. Courts look to the requirements and
circumstances of each organisation when determining
if a mandatory retirement age constitutes age
discrimination. Therefore, employers should be able
to demonstrate that they considered their individual
mandatory retirement age carefully, taking into account
the particular requirements of their own organisation
and the roles carried out by their employees in order to
objectively justify a mandatory retirement age.
by Elizabeth Ryan
Elizabeth Ryan
Partner
Mason Hayes & Curran
Article Author