New guidance on issues surrounding retirement has been published by the Department of Business, Enterprise and Innovation. This new Code describes principles and practices to be followed by both employers and employees during the retirement phase and includes responding to requests to work beyond the retirement age.
The Beginning of Change
The traditional retirement age in Ireland was always 65, a time when employees qualified for the State pension and it was generally accepted that they would retire, whether it was an express term of their contract of employment or not. People were considered to have come to the end of their useful working lives and statistically, were not too far off the end of their natural lives. That has all changed. The State pension age has increased and is set to continue increasing and that has left some employees in a position where they have no income between retirement and the commencement of their pension. Much more significantly, people generally are living far longer and are often just as capable of working at and after 65 as they ever were. The 'set in stone' retirement age of 65 has gradually been eroded in more recent times.
Enforceability of Retirement Ages
First there was the general prohibition on age discrimination which cast doubt on the enforceability of retirement ages. Some successful challenges were mounted to contractual and "custom and practice" retirement ages on the discrimination ground. The next shock wave to hit the traditional position was the commencement, on 1 January 2016, of the Equality (Miscellaneous Provisions) Act 2015 which amended Section 34 of the Employment Equality Act 1998 to provide that while it was not discriminatory to have different retirement ages, whether voluntary or compulsory, the retirement age had to be "objectively and reasonably justified by a legitimate aim and the means of achieving that aim was proportionate and necessary". The difficulty with this, for an employer, was essentially twofold: first there was the uncertainty as to what might be accepted as a legitimate aim and if that could be established, the question then arose as to what retirement age would be accepted as being proportionate and necessary. The objective aspect of the test opened any contractual retirement age or retirement policy up to challenge. New Code of Practice
In the absence of court decisions to guide employers, a Code of Practice under the Industrial Relations Act has...