Retirement Age – What do employers do?

A recent case related to retirement age, brought by a motor mechanic against his employer, O’Neill Motors, (case No. DEC-E2012-093), highlights the difficulty for employers in identifying, and managing, retirement age.

The employee was employed from 1989 to 2008, and was dismissed on the grounds of retirement at age 66. He claimed that he had not been given access to training and development and he was being discriminated against on the grounds of age.

The EAT stated that termination of an employee’s employment solely on reaching a particular age constitutes direct discrimination on grounds of age contrary to section 8 of the Employment Equality Acts.

The company sought to rely on section 34(4) of the Employment Equality Acts. Section 34(4) provides that it shall not constitute discrimination on the age ground to fix different ages for the retirement, whether voluntary or compulsory, of employees or any class or description of employees.

The Tribunal rejected the company’s argument that they were retiring the employee for health and safety reasons, and ordered the company to pay Mr O’Neill €30,000 by way of compensation for the distress caused by the discrimination and as such the award was not subject to PAYE/PRSI.

This highlights the need for careful review of employees who may be nearing retirement, to ensure a smooth transition that meets the needs of the business and the individual.