There is a significant body of case law under Irish law regarding the validity of contractual mandatory retirement.
The assessment of claims brought to the WRC (formerly the Equality Tribunal) and, on appeal, the Labour Court by employees forced to retire has been reasonably consistent. There is normally a two-part legal test applied.
The first part of the legal test that is typically applied is whether a contractual retirement age exists. From an employer perspective, this should ideally be contained in an express clause in the contract of employment. Failing that, an employer may be able to prove the existence of an implied contractual retirement age, e.g. where a significant number of employees have consistently retired at a specific age that is well known across the organisation, or where there is an occupational pension scheme from a certain age that is apparent to all employees.
An employer will be in difficulty in cases where there is no obvious contractual retirement age, express or implied. This happened in a recent Labour Court case involving a barman at Knock Airport who was forced to retire. The employment contract in that case did not contain a standard retirement clause. Furthermore, the claimant employee was not a member of the employer pension scheme and therefore could not necessarily be fixed with knowledge of the pension retirement age. While there were a number of retirements – 10 over as many years – two of these (20%) worked beyond 65. All of the above led the Labour Court to find that there was no express or implied contractual retirement age in existence requiring the mandatory retirement of the employee.
As such, the question of whether the retirement was objectively justified was not relevant. That is normally the second limb of the legal test applied, and, in many cases, justification such as succession planning, inter-generational fairness or sometimes health and safety can be successfully argued. However, this simply did not arise in the Knock Airport case as the employer fell at the first hurdle by being unable to establish the existence of a contractual retirement clause.
The case reminds employers of the importance of well-drafted contracts of employment which include key clauses such as a mandatory retirement clause. In the absence of such a clause employers may struggle to defend age discrimination or unfair dismissal claims. The award made by the Labour Court to the retired employee in this case (€6,500) is relatively modest, although the overall experience was presumably a difficult and more expensive one for the employer.
A link to the Glavey v Connaught Airport Development Limited decision can be found here.
Author: Barry Walsh