Workplace Relations Commission (WRC) - RECENT Decisions & judgements
Adjudication Decision Reference: ADJ-00001463
Reinstatement and Award of €6,500 to Individual Forced to Retire at 65
In January 2015 the Complainant was issued with notice by the Respondent of their intention to retire him from his role on 6th January 2016 when he would reach the age of 65 years.
The Complainant claimed he was not notified or made aware of a retirement age of 65 prior to the letter sent to him on 15 January 2015, stated that no reference to a retirement age was referenced within his Contract of Employment and claimed that the Respondent had failed to show any adequate objective justification for establishing a compulsory retirement age at 65.
The Claimant further referenced the fact that he had previously transferred to his current employer as part of a transfer of undertakings (TUPE), and had been issued with a new contract of employment at this time, which made no reference to a mandatory retirement age. The Claimant went further and stated that even if such provision were provided for, he was aware of two named comparators (HB 2009) and HB 2014) who had been permitted to continue working until 66 and 69 years of age.
In reply, the Respondent submitted that it had been custom and practice of the employer that employees retire when they reach the age of 65. Furthermore, it was necessary and proportionate to retire employees at the age of 6 for a variety of reasons. This included health and safety as some tasks performed by employees required exceptionally high physical capabilities and reflected a need to free up positions so that younger workers could enter the employment and have a defined career path. The Respondent further submitted that a lack of young entrants to the employer would have an adverse effect on productivity.
The Respondent indicated that in one exceptional circumstance an employee who was retired at 65 was reengaged on a fixed term contract of employment for a stand alone project. Whilst they were paid by the Respondent for the work on the project, their pay was reclaimed through the relevant government department.
In determination of its decision, whilst accepting the aims and objectives put forward by the Respondent could be viewed as being legitimate e.g. ensuring an age balance in the workforce, to provide for certainty in succession planning, the Adjudicator determined such arguments not to be appropriate and necessary in this case. In concluding the complaint of discrimination to be well founded, the Adjudicator noted that no occupational pension scheme for the Complainant existed in the Respondent employment. Given the state retirement pension now applies at 66, the Complainant was being required to manage for a period of one year with neither wages nor pension, with only a possibility of qualifying for job seekers benefit.
The Adjudication Officer ordered the Respondent to reinstate the Complainant with effect from the date of the termination of employment, 6th January 2016, on the same pay and conditions of employment enjoyed prior to the termination date and be compensated in the sum of €6,500.
Employment law in the area of pensions and retirement remains of significance for Employers and represents a significant challenging for Employers seeking to enforce the retirement age of 65. Significant importance was attached in this case to the fact that the Claimant was not in receipt of an occupational pension scheme from their employer and would be required to wait 1 year until the age of 66 before being entitled to receive the stage pension benefit
The age at which people are entitled to a State pension will rise to 67 in 2021 and to 68 within the next decade. This is also set against the backdrop of a recent announcement by Pascal Donohoe in which the compulsory retirement age for public service workers is set to increase from 65 to 70, which no doubt will lead to pressure on other employers to increase the age at which Employees are required to retire.
Employers will need to be mindful that even where they are of the view that the grounds for seeking to enforce retirement age of 65 are fair, reasonable, and legitimate, and where provided for within a contract of employment, may be challenged given the wider external changes in respect of a likely increase in age at which Employees are required to retire and the point at which an individual may be entitled to receipt of state pension benefit.
Adjudication Decision Reference: ADJ-00005391
Award of €12,000 to Individual with Oral Contract to Retire at 66
The Complainant had been employed since 2004 and stated that she was given notice over a number of months between August 2015 and August 2016 that would be expected to retire initially at 65 and then at 66 years of age. The Complainant stated she did not have a written contract of employment or other agreement that she would retire at 66 and that she wished to continue working. The Claimant rejected a subsequent offer of re-engagement on the basis of a two year contract because such a contract given to a co-worker on a previous occasion proved to be ‘unreliable’.
In reply, the Respondent submitted that it believed it had an oral contract with the Complainant and that an implied term of the complainant’s contract of employment was that she would retire on reaching the age of sixty five. The termination of the employment was effected on the basis of its understanding of this implied term, and not on the grounds of age. Only one previous employee had reached that age while still in the Respondent’s employment and this person was facilitated with an extension of one year. Furthermore, a pension was created for the Complainant in 2004 which clearly foresaw retirement at sixty-five. The Respondent genuinely believed that such a retirement age was necessary for the management of the organisation but it had been willing to offer a fixed term extension.
In determination of its decision, the Adjudication Officer found there was no evidence to support the enforced retirement age and that the Respondent failed to provide objective reasons, or any justification for it, with the exception of the view that it had the right to terminate employment at sixty five because it was traditional to do so.
In finding in favour of the Complainant, and discrimination to have occurred on the grounds of age, the Complainant was awarded €12,000.00.
Alongside the Equality (Miscellaneous Provisions) Act 2015 which amended the rules on mandatory retirement and age discrimination, the recently announced Industrial Relations Act 1990 (Code of Practice on Longer Working) (Declaration) Order 2017 provides guidance to Employers, Employees and their representatives on the best practice in the run-up to retirement, including responding to requests to work beyond the retirement age in the employment concerned.
While the right of Employers to set a mandatory retirement age still exists, it is now only permitted if:
Equally, the importance of setting out a retirement age as a term of the contract of employment remains critical for Employers.
Reinstatement and Award of €6,500 to Individual Forced to Retire at 65
In January 2015 the Complainant was issued with notice by the Respondent of their intention to retire him from his role on 6th January 2016 when he would reach the age of 65 years.
The Complainant claimed he was not notified or made aware of a retirement age of 65 prior to the letter sent to him on 15 January 2015, stated that no reference to a retirement age was referenced within his Contract of Employment and claimed that the Respondent had failed to show any adequate objective justification for establishing a compulsory retirement age at 65.
The Claimant further referenced the fact that he had previously transferred to his current employer as part of a transfer of undertakings (TUPE), and had been issued with a new contract of employment at this time, which made no reference to a mandatory retirement age. The Claimant went further and stated that even if such provision were provided for, he was aware of two named comparators (HB 2009) and HB 2014) who had been permitted to continue working until 66 and 69 years of age.
In reply, the Respondent submitted that it had been custom and practice of the employer that employees retire when they reach the age of 65. Furthermore, it was necessary and proportionate to retire employees at the age of 6 for a variety of reasons. This included health and safety as some tasks performed by employees required exceptionally high physical capabilities and reflected a need to free up positions so that younger workers could enter the employment and have a defined career path. The Respondent further submitted that a lack of young entrants to the employer would have an adverse effect on productivity.
The Respondent indicated that in one exceptional circumstance an employee who was retired at 65 was reengaged on a fixed term contract of employment for a stand alone project. Whilst they were paid by the Respondent for the work on the project, their pay was reclaimed through the relevant government department.
In determination of its decision, whilst accepting the aims and objectives put forward by the Respondent could be viewed as being legitimate e.g. ensuring an age balance in the workforce, to provide for certainty in succession planning, the Adjudicator determined such arguments not to be appropriate and necessary in this case. In concluding the complaint of discrimination to be well founded, the Adjudicator noted that no occupational pension scheme for the Complainant existed in the Respondent employment. Given the state retirement pension now applies at 66, the Complainant was being required to manage for a period of one year with neither wages nor pension, with only a possibility of qualifying for job seekers benefit.
The Adjudication Officer ordered the Respondent to reinstate the Complainant with effect from the date of the termination of employment, 6th January 2016, on the same pay and conditions of employment enjoyed prior to the termination date and be compensated in the sum of €6,500.
Employment law in the area of pensions and retirement remains of significance for Employers and represents a significant challenging for Employers seeking to enforce the retirement age of 65. Significant importance was attached in this case to the fact that the Claimant was not in receipt of an occupational pension scheme from their employer and would be required to wait 1 year until the age of 66 before being entitled to receive the stage pension benefit
The age at which people are entitled to a State pension will rise to 67 in 2021 and to 68 within the next decade. This is also set against the backdrop of a recent announcement by Pascal Donohoe in which the compulsory retirement age for public service workers is set to increase from 65 to 70, which no doubt will lead to pressure on other employers to increase the age at which Employees are required to retire.
Employers will need to be mindful that even where they are of the view that the grounds for seeking to enforce retirement age of 65 are fair, reasonable, and legitimate, and where provided for within a contract of employment, may be challenged given the wider external changes in respect of a likely increase in age at which Employees are required to retire and the point at which an individual may be entitled to receipt of state pension benefit.
Adjudication Decision Reference: ADJ-00005391
Award of €12,000 to Individual with Oral Contract to Retire at 66
The Complainant had been employed since 2004 and stated that she was given notice over a number of months between August 2015 and August 2016 that would be expected to retire initially at 65 and then at 66 years of age. The Complainant stated she did not have a written contract of employment or other agreement that she would retire at 66 and that she wished to continue working. The Claimant rejected a subsequent offer of re-engagement on the basis of a two year contract because such a contract given to a co-worker on a previous occasion proved to be ‘unreliable’.
In reply, the Respondent submitted that it believed it had an oral contract with the Complainant and that an implied term of the complainant’s contract of employment was that she would retire on reaching the age of sixty five. The termination of the employment was effected on the basis of its understanding of this implied term, and not on the grounds of age. Only one previous employee had reached that age while still in the Respondent’s employment and this person was facilitated with an extension of one year. Furthermore, a pension was created for the Complainant in 2004 which clearly foresaw retirement at sixty-five. The Respondent genuinely believed that such a retirement age was necessary for the management of the organisation but it had been willing to offer a fixed term extension.
In determination of its decision, the Adjudication Officer found there was no evidence to support the enforced retirement age and that the Respondent failed to provide objective reasons, or any justification for it, with the exception of the view that it had the right to terminate employment at sixty five because it was traditional to do so.
In finding in favour of the Complainant, and discrimination to have occurred on the grounds of age, the Complainant was awarded €12,000.00.
Alongside the Equality (Miscellaneous Provisions) Act 2015 which amended the rules on mandatory retirement and age discrimination, the recently announced Industrial Relations Act 1990 (Code of Practice on Longer Working) (Declaration) Order 2017 provides guidance to Employers, Employees and their representatives on the best practice in the run-up to retirement, including responding to requests to work beyond the retirement age in the employment concerned.
While the right of Employers to set a mandatory retirement age still exists, it is now only permitted if:
- it is objectively and reasonably justified by a legitimate aim, and
- the means of achieving that aim are appropriate and necessary.
Equally, the importance of setting out a retirement age as a term of the contract of employment remains critical for Employers.
Note on WRC:
The establishment of the Workplace Relations Commission on the 1st October 2015 is the most radical restructuring of employment legislation over the last 30 years. Organisations are encouraged to understand all facets of the WRC, how it now operates and what to expect when required to defend a claim at the third parties.
The establishment of the Workplace Relations Commission has resulted in the combined functions of the Labour Relations Commission, Rights Commissioner Service, the Equality Tribunal, the Employment Appeals Tribunal and the National Employment Rights Authority (NERA).
In addition to this the Labour Court has been reconfigured in order to hear appeals.
The strategic aims of the new Workplace Relations Commission include an independent, effective and impartial workplace relations service, a more workable means of redress within a reasonable timeframe and an overall reduction in costs. The new Workplace Relations Commission is also anticipated to be more centralised, in terms of maintaining a database of case information, the end result bring a better service for both Employers and Employees and a much more streamlined, simplified process.
The establishment of the Workplace Relations Commission on the 1st October 2015 is the most radical restructuring of employment legislation over the last 30 years. Organisations are encouraged to understand all facets of the WRC, how it now operates and what to expect when required to defend a claim at the third parties.
The establishment of the Workplace Relations Commission has resulted in the combined functions of the Labour Relations Commission, Rights Commissioner Service, the Equality Tribunal, the Employment Appeals Tribunal and the National Employment Rights Authority (NERA).
In addition to this the Labour Court has been reconfigured in order to hear appeals.
The strategic aims of the new Workplace Relations Commission include an independent, effective and impartial workplace relations service, a more workable means of redress within a reasonable timeframe and an overall reduction in costs. The new Workplace Relations Commission is also anticipated to be more centralised, in terms of maintaining a database of case information, the end result bring a better service for both Employers and Employees and a much more streamlined, simplified process.
Adare Human Resource Management is one of Ireland’s leading Employment Law and Human Resource Management Consultancies. Our HR & Employment Law Support Services include:
www.adarehrm.ie
- Advice on all Employment Law, Industrial Relations and HR queries or issues
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- Management and Employee Training - Dignity at Work, Anti-Harassment and Sexual Harassment, Conducting Disciplinary Meetings
- Investigations - independent investigations on behalf of Organisations in line with the relevant legislation and codes of practice
- Organisational Management or Change Management Initiatives – including review / development of Performance Appraisal / Management Systems and Organisational Development
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