Discrimination on the Ground of Age – Compulsory Retirement Ages and Fixed-Term Contracts
You may face discrimination at work on the ground of age if your employer imposes a compulsory retirement age. It may also be discrimination on the ground of age if your employer offers you a fixed-term contract after you reach the compulsory retirement age.
The law that applies is set out in the Employment Equality Acts 1998-2015 (EEA).
What is a compulsory retirement age?
A compulsory retirement age is the age at which an employee must retire according to the employer’s policy. It is also sometimes called a mandatory retirement age or an upper retirement age. This age is often stated in an employment contract. It can vary depending on the employer and the terms of the employment contract. For more information see our guide: Retirement and Fixed Term Contracts Guidelines.
You may also wish to refer to the Workplace Relations Commissions’s Code of Practice on Longer Working, which gives guidelines for employers and employees on what to bear in mind when considering options for older workers.
Does a compulsory retirement age have to be stated in my contract?
No. A compulsory retirement age may be established in various ways:
- In an employment contract
- In an employee handbook – which must be widely available to employees
- In a collective agreement – which you must be aware of and must have accepted
- By custom and practice in the workplace – which everyone there should know about (or could easily find out about)
- By law – for example, for workers in public services
Exemptions can apply, see Retirement and Fixed Term Contracts Guidelines.
What is a fixed-term contract?
A fixed-term contract ends on a specific date or after a specific task or event. For example, a one-year fixed term contract will end one year after its start date.
After you reach the compulsory retirement age, you might be offered a fixed-term contract to continue working beyond that age. You may feel it is unfair as it may change your terms and conditions of employment.
What is discrimination?
Discrimination means being treated less favourably than someone else in a similar situation on one of the nine protected grounds listed in the EEA.
The nine grounds are gender, civil status, family status, sexual orientation, age, religious belief, membership of the Traveller community, race, and disability.
Complaints relating to compulsory retirement ages or age-related fixed-term contracts are taken on the ground of age.
What types of discrimination are there?
Discrimination on the ground of age may be direct, indirect, by imputation or by association.
Direct discrimination may arise when your employer unfairly fixes a compulsory retirement age and requires you to retire or to continue working on a fixed-term contract thereafter.
Indirect discrimination may arise where an apparently neutral rule or policy that applies to everyone in the workplace puts you at a particular disadvantage because of your age. For example, a delivery agency that requires all its drivers to have earned six years’ no-claim bonus could be said to discriminate against drivers under 23.
Discrimination by imputation is where an employer treats you less favourably because they assume that you are a certain age, even if you are not. For example, a fashion retailer might think it is time you retire from your job as a sales assistant because you have grey hair, even though you are not near the usual retirement age.
Discrimination by association is where you are treated less favourably because of your connection with someone in a protected group.
Could my employer be justified in imposing a compulsory retirement age or offering a fixed-term contract on the basis of age?
Yes. Your employer may have good reasons to expect you to retire at a certain age or to limit the length of your service.
Although discrimination on grounds of age is generally unlawful, the law allows for a range of exceptions to the rule. These are set out in sections 34(4) and 6(3)(c) of the EEA.
If you complain about age discrimination, and your employer disputes your complaint, the WRC will assess whether the employer has ‘objective justification’ for their policy. This means the WRC will decide whether the employer’s arguments are fair in the circumstances.
For example, you may feel that you have been discriminated against when your employer requires you to retire after a compulsory retirement age. In order to establish such a requirement, the employer must first show that a compulsory retirement age is objectively justified by a ‘legitimate aim’. They must then show that the steps they took to achieve that aim were appropriate and necessary.
Similarly, you may feel that you have been discriminated against when you are allowed to continue working past a compulsory retirement age by your employer, but only on a fixed-term contract with less favourable terms than your previous contract of employment. Under the EEA, the employer can justify offering such a fixed-term contract if they can show that it is objectively justified by a legitimate aim. They must then show that the steps they took to achieve that aim were appropriate and necessary.
What is a legitimate aim?
A legitimate aim must relate to:
- Employment policy – for example, promoting the access of young people to certain professions and encouraging knowledge sharing between generations; or
- The labour market – for example, workforce planning; or
- Vocational training – for example, whether skilled workers should stay on to help train apprentices or should make way for new recruits with up-to-date technical knowledge
In addition, a legitimate aim must have a public interest as well as a purely private one. This means that while commercial and financial considerations may form part of an employer’s decision to set a compulsory retirement age or offer a fixed-term contract to a person over that age, they cannot be the only reason. The legitimate aim must also have a social policy objective such as the ones in the examples above.
When an employer has identified a legitimate aim for fixing a compulsory retirement age or offering a fixed-term contract to a person above that age, they must show that their actions:
- Are reasonable and linked to the legitimate aim (this is called ‘objective justification’); and
- Are appropriate and do not go further than what is necessary to achieve the legitimate aim.
If an employer cannot show these 2 things, the WRC may decide that their actions amount to discrimination on the ground of age.
Example: Engineer forced to retire at 65 from physically demanding job
A 65-year-old engineer appealed to the Labour Court after his complaint of age discrimination was refused by the WRC. His employer had refused to extend his employment to the age of 70. The engineer argued that he was fit and well and knew of another employee who had been allowed to work until they were 70.
The employer argued that its employee handbook and retirement plan both made clear that service engineers had to retire at 65, and the employee who worked to 70 had a desk job. It noted that the work of a service engineer was physically demanding and critical to workplace safety. The employer also argued that it was also specialised work, involving six years’ training, therefore mandatory age limits made it easier for the company to plan for a reliable succession of skilled engineers. The court agreed that the employer was objectively justified in imposing a compulsory retirement age on the grounds of safety, efficiency and workforce planning.
Example: Giving opportunities to younger staff justifies compulsory retirement
An employee complained about having to retire at 65 as no retirement age was written into their contract of employment. The employer argued that retirement at 65 was customary at the firm and served to create opportunities to promote more junior staff. Internal promotion allowed better business planning, helped the firm retain staff and was good for morale. The WRC agreed that this was a legitimate aim, which justified the practice of compulsory retirement, so it did not uphold the complaint of age discrimination in this case.
Example: Civil servant forced to retire won her case at the WRC
A 65-year-old civil servant with an exemplary work record complained to the WRC because she was not allowed to continue at work for another five years, although several colleagues had stayed on after 65. Her employer argued that the compulsory retirement age enabled the promotion of younger staff and a better balance of age groups within the office. The WRC considered this argument was unfair as other employees had been kept on to the age of 70. It awarded the complainant €82,000 compensation on the ground of age discrimination.
Example: Tradition is no excuse for compulsory retirement
A bookkeeper complained to the WRC about having to retire at 65, noting that a previous employee had worked until they were 66. Although there was no written contract stating the retirement age, the employers said it was implied by oral agreement. They assumed they had a traditional right to end their workers’ employment at 65. The WRC considered this reasoning to be vague and unlawful. They upheld the complaint of unjustified discrimination on the ground of age and awarded compensation of €12,000 to the bookkeeper.
Example: Employer cannot just assume work is too risky for the over 65s
A sales assistant-cum-repair technician complained about compulsory retirement at an electrical retail shop. He noted that another employee had worked until they were 73. He said he felt fully capable of continuing to work, and no health and safety report had indicated otherwise. The employer argued that the repairs workshop was too hazardous for a person over 65. However, the WRC held that the employer failed to justify this argument, as it was not supported by any medical report or risk assessment. The employee was awarded €18,000 compensation for discrimination on the ground of age.
Example: Tram driver must retire at 65 for health and safety reasons
A tram driver complained to the Labour Court about having to retire at 65. The employer argued that retirement at 65 was sensible for several reasons. It was the established retirement age for the whole company, which made workforce planning more straightforward. And it was essential to public safety that drivers were fit and well enough to be in charge of a tram. The Court agreed that a compulsory retirement age of 65 for tram drivers was reasonable on health and safety grounds and was in line with labour market policy and the law.
What if the terms of a fixed-term contract discriminate on the ground of age?
As we have seen above, your employer may be justified in offering you a fixed-term contract after you have reached a compulsory retirement age and want to continue working, provided that their decision is objectively justified by a legitimate aim, such as workforce planning, and offering a fixed-term contract is an appropriate and necessary way to achieve that aim. However, the employer cannot then include less favourable conditions in the fixed term contract than those for employees on other contracts.
For example, where an employer offers you a fixed-term contract because of your age, and that contract excludes you from a bonus or insurance scheme which are offered to permanent employees, this may amount to discrimination on the ground of age.
How do I make a complaint of discrimination on the ground of age?
You can make a complaint of age discrimination under the EEA to the Workplace Relations Commission (WRC). The WRC deals with cases of discrimination on any of the protected grounds, including the ground of age.
- Start by completing the complaint form on the WRC website.
- Send the form to the WRC within six months of the date when the issue arose.
You may wish to seek further information from your employer before commencing a complaint. For further information on how to do so, as well as more detail on how to bring a complaint to the WRC, see our guide – “How to take a Case to the WRC”.