To retire or not to retire......that is the question!

The question about whether employers should enforce mandatory retirement ages continues to raise debate. Age discrimination and unfair dismissal are very serious charges an employer can face in terms of how they enforce compulsory retirement ages*. So how can you, as an employer, protect against such a scenario? Simply by getting two key points correct;

• be able to demonstrate that a compulsory retirement age applies in your company
• understand the purpose or ‘legitimate aim’ of the retirement age you want to apply.

Before you can enforce a retirement age, you must be clear on what that age is and be confident of the existence of and justification for this - before seeking to rely on it if challenged! This retirement age must be properly referenced in the employment contract and the retirement age policy be communicated clearly to all staff. While different grades or categories of worker can have different compulsory retirement ages, the differences must be clearly explained and any confusion arising from this should be addressed.

Employers should consider the company’s overall business needs and determine the retirement age based on those needs. Reasons which may be considered to “objectively justify” the mandatory retirement of employees includes health and safety of staff, career progression, succession planning and more labour market opportunities.

So, if employers cannot show that their compulsory retirement age policy is appropriate and necessary based on a legitimate objective, this is likely to be considered discriminatory on age grounds. If an employee takes a case against their employer to the WRC over being compulsorily retired, reinstatement to the role can be ordered (which in itself leads to complications for employers!) or where reinstatement is not ordered, significant awards of compensation can be awarded.

An employer's ability to rely on a legitimate aim may be undermined by their actions. Best practice now requires that employers adopt clear policies about retirement - with particular emphasis being placed on the WRC’s Code of Practice on Longer Working. Employers need to start planning for future requirements and if employees are to remain on in employment after their normal retirement age, you should start considering the employment and pension implications of this now….

*Some recent cases on Compulsory Retirement ages that are interesting reads are Longford County Council v Michael Neilon, Quigley v HSE and John O'Brien v PPI Adhesive Plastics