€24,000 awarded to former director for compulsory retirement at 65

In a recent determination, the Labour Court has affirmed an Equality Tribunal award of €24,000 to a former employee (and former director) of Errigal Seafood for discriminatory dismissal on grounds of age. The employee had been a director of the respondent up until 1998 and he was subsequently engaged as an employee in 2007 on a fixed-term contract.  A further contract was prepared following the expiry of the fixed-term, however the employee refused to sign this agreement.  The employee was compulsorily retired in February 2011 at the age of 65. The employer argued that it was entitled to retire employees at 65 and sought to rely on the Employment Equality Acts 1998-2011 which permits employers to set a retirement age (see our earlier post on: Justification of contractual retirement ages).  However, in order to rely on this provision, an employer must show that a retirement age was either an express or implied condition of employment.  The employee’s contract did not contain any term in relation to retirement and the company pension scheme provided that an employee could retire at any age between 60 and 75.  The employer argued that the employee handbook stipulated the retirement age and this was incorporated into the employee’s conditions of employment.  The employer also argued that a policy requiring employees to retire at 65 or 66 had applied consistently to other employees.  The employee on the other hand contended that there was no compulsory retirement age in existence and he did not have knowledge or sight of the employee handbook until the hearing at the Equality Tribunal. The Court accepted that the employee handbook was not incorporated as a condition of employment and accepted the employee’s evidence that he did not know of the existence of this handbook.  With regard to the policy on retirement, the Court accepted that a policy can have contractual effect where either the employees know, or ought to have known, of its existence.  However, the employee was not aware of the existence of any policy.  Significantly, the employer had provided details in relation to a number of individuals who had retired at the ages of 65 or 66 in recent years.  While those individuals retired at those ages, the Court noted that their actual retirement did not take effect on either their 65^thor 66^th birthday, which would usually be expected where there is a mandatory retirement age.  In the circumstances of the case, the Court found that an award of €24,000 for age discrimination was fair and reasonable in the circumstances.  In this regard, the Court appears to have taken into account that the employee’s position was likely to have been made redundant, if he had not been compulsorily retired. It is clear that employees must be aware of the existence of a mandatory retirement age.  Therefore, employers should ensure that the retirement age is expressed in contracts of employment, where possible and a consistent policy on retirement should be followed.  A full copy of the decision can be viewed here.