The Workplace Relations Commission (the WRC) has recently held in an age discrimination equality case that a respondent charity organisation was entitled to rely on its contractual mandatory retirement age. This decision is welcome news for employers following several recent cases where as respondents, a number of employers were unsuccessful in their reliance on a mandatory retirement age.
Case Facts
The complainant worked until she reached the age of 66, being the State pension age as stipulated by her contract of employment. In advance of her 66th birthday she requested that her employer extend her employment for one year. The application was refused without, she alleges, any objective grounds being given. Further, she was informed that no colleague had worked beyond this age.
She submitted a grievance via the employer's internal procedure which was unsuccessful. She was informed that because her contractual mandatory retirement age was the "State Pension Age", this would be applied, notwithstanding that "it was out of line with the organisation's policy and our standard practice". The employer's policy stipulated a mandatory retirement age of 65.
The respondent employer admitted at hearing that a very limited number of staff remained in employment beyond 66 years of age, but such scenario was in limited circumstances where promotion to that role was not possible (i.e. not stifling career progression of younger employees). The complainant's argument was that the respondent did not have objective and justifiable grounds for refusing the complainant's request to work beyond 66.
The respondent's argument was that their retirement policy represented a number of legitimate aims and the means of achieving those aims were proportionate and necessary, therefore meeting the legal tests for fair implementation of a mandatory retirement age. The specific aims given in this case were (1) intergenerational fairness - to allow succession and promotional opportunities; (2) a wish to increase staff motivation and dynamism through the increased prospect of promotion; and (3) to assist staff retention and creating a balanced age structure across the organisation.
Further, the respondent argued there was no precedent for extending employment beyond the age of 66 for employees in the specific role in question. It happened previously in very limited circumstances in other areas of the organisation, but only for those employees not in a promotional role.
The respondent gave evidence that five employees in the complainant's role would need to be replaced due to retirement by 2027. There was also an increase in staff turnover, which they argued was mainly due to lack of opportunity. The respondent stated that in 2023 it lost three high potential employees due to lack of progression or promotional opportunities. The respondent submitted that this evidence in relation to the complainant's role amounted to a legitimate aim and the means of achieving that aim were proportionate and necessary.
Decision
The WRC Adjudication Officer (the AO) identified that at the time of the complainant's application to remain in employment for a further year, the respondent had not communicated what they later set out were their legitimate aims underpinning this policy to their staff. However, prior to the complainant's application, the evidence showed that the respondent was taking measures to help in the retention of staff that had the potential to be promoted.
On that basis the AO found that the respondent did not discriminate against the complainant on grounds of age and in accordance with section 34(4) of the Employment Equality Acts, that their retirement policy in relation the complainant’s role as it was applied to the complainant was objectively and reasonably justified by a legitimate aim and the means of achieving that aim were appropriate and necessary.
Key Takeaway for Employers
The decision is a welcome one for employers. It highlights that an employer can rely on their contractual mandatory retirement age where it can provide objective evidence to demonstrate the achievement of a legitimate aim, in this case that working beyond that age would have a negative effect on staff retention and succession planning for the business.
Martina Deasy v Daughters of Charity Child and Family Service (ADJ-00045740)
For more information, please contact Shane Costelloe, Sinead Grace, any member of the Employment & Benefits Team or your usual contact in Beauchamps LLP.