Retirement in The Workplace
The phrase that “age is merely a mindset” seems to be growing in relevance as today’s aging workforce becomes more eager to work beyond the traditional retirement age of 65. Retirement based age discrimination has had a resurgence in recent years with the introduction of the Equality (Miscellaneous) Act 2015, which has brought Irish Law formally in line with the EU Framework Directive 2000/78/EC. In essence, employers are required to justify when an employee is mandatorily retired.
Following on from the above, the WRC published a Code of Practice in 2017 called the Industrial Relations Act 1990 [Code of Practice on No Longer Working] (Declaration) Order 2017 (hereafter referred to as “The Code”). In essence, the Code sets out guidelines as to the steps which should be taken by employers wishing to mandatorily retire employees. We have detailed below what these guidelines are.
The Code outlines that in addition to ensuring that a retirement clause has been sufficiently included within an employee’s contract, that an employer should adopt the following procedure for when an employee is approaching retirement to ensure clarity for both sides;
- Notify the employee of their retirement in writing 6 months prior to their date of retirement;
- Allow reasonable time for planning, advice and succession for the employee;
- Employer should arrange a face to face meeting following written notice to ensure;
- A clear understanding of the intended retirement date and the potential issues that may occur therein;
- Explore measures to support the employee in retiring;
- Discuss any potential for transitional arrangements regarding a post that may be available for the employee;
- Employer should be supportive when providing guidance and information throughout the entire process.
4. Importantly all requests to work beyond the retirement age, regardless of whether there is a retirement clause or not, the employer should still give it the deserved consideration and take the following into account – options for flexible working times, duration of a post working contract, occupational Pension Scheme and any potential contract of employment implications therein.
Post- Retirement Procedure
The Code recommends that employers adopt the following procedure when it comes to accommodating post-retirement employment;
- The employer must provide a method of facilitation for the employee to make a request to continue employment no less than 3 months from the retirement date;
- After the request, an engagement meeting should follow between both parties. The purpose of this meeting is to allow the employee to submit a request to continue employment past his/her retirement date. It’s important for the employer in this instance to afford an employee requests proper consideration and to avoid a pre-determined mindset;
- The employer then must communicate their decision to the employee within a reasonable time after the engagement meeting. The Code recommends the sooner the decision is given, the better;
- If the employer refuses the employees request, the decision should be clearly set out to assist the employee to be able to understand the findings reached. In this regard, the key point is that the employer must set out the objective justification which it is relying upon to mandatorily retire the employee. The Code gives some guidance on what can constitute objective justification in different circumstances. This, in essence, depends on the nature of the job and will vary. Accordingly, it is an issue that all employers must consider carefully.
After this, the employer must facilitate a mode of appeal for the employee if the request is refused in accordance with fair procedure. Again, the Code recommends that this should be dealt with through the normal grievance procedure with the standard requirements applying therein i.e. right to representation.
- If the decision is taken to retain the employee, it is clarified that the employee may be offered a fixed term contract.
Importantly, this procedure should be clearly outlined in the company handbook and/or the employee’s contract of employment.
Going forward, employers need to avoid falling into the predictable trap of over-reliance on a so-called traditional retirement age that seems to no longer be as relevant as it once was in Ireland. Following on from the foregoing, employers should ward off the presumption that an employee is waiting to retire and should err on the side of caution and should ensure that a proper procedure in line with the Code is implemented.