New Code of Practice published by Workplace Relations Commission
8 February 2018
The publication on 20 December 2017 by the Workplace Relations Commission (“WRC”) of a Code of Practice on Longer Working sets out some welcome guidance for employers and employees on best practice in managing the process where employees approach retirement in the workplace. Prior to the publication of the Code of Practice, it fell to employers and employees to negotiate the issue of retirement against a backdrop of the extension of the State Pension Age and potential legal challenges to the imposition of a mandatory retirement age.
The Government announced in December its plan to raise the mandatory retirement age for the bulk of public servants to 70. The extension of the age at which a State pension is payable means that for many, the prospect of retirement from employment at 65 is not financially affordable. For many employees their career span will be longer than may have been anticipated when joining employment. These changes pose challenges for employers and employees alike.
The Code emphasises the value in delivering a positive message around embracing and valuing employees of all ages, raising age discrimination awareness and having a culture that does not tolerate discrimination.
The current law on compulsory retirement age in the private sector is, the Code explains, that it must be an express or implied term of the employment contract and “must be capable of objective justification both by the existence of a legitimate aim and evidence that the means of achieving that aim are appropriate and necessary”. It sets out examples of what may constitute a legitimate aim:
- Inter-generational fairness (allowing younger workers to progress);
- motivation and dynamism through the increased prospect of promotion;
- health and safety (generally in more safety critical occupations);
- creation of a balanced age structure in the workforce;
- personal and professional dignity (avoiding capability issues with older employees); or
- succession planning.
In terms of standard retirement arrangements, the Code says that good workforce planning is important and, where no contractual retirement age exists, “it is reasonable as part of workforce planning for an employer to raise and discuss with the employee, their retirement intentions”. This makes it clear that simply raising the issue of retirement is permissible for an employer, even where there is no contractual retirement age.
The Retirement Process
The Code says it is good practice for an employer to notify an employee, when approaching retirement, of the intention to retire him/her within 6-12 months of the contractual retirement date.
While the initial notification should be in writing, it should be followed up by a face to face meeting to address matters such as:
- clear understanding of the retirement date and any possible issues arising;
- exploration of measures (subject to agreement) which would support the pathway to retirement, e.g. flexible working;
- transitional arrangements; and
- assistance around guidance and information.
Requests to Work Longer
The Code suggests matters the employer and employee should consider with regard to a request to work beyond normal retirement age. For example:
- Is the employee confident that he/she can continue to perform the role to the required standard?
- What is the duration of the extension being sought?
- Are there good grounds on which to accept or refuse
It is important to note that the Equality (Miscellaneous Provisions) Act 2015 requires that a fixed-term contract post-retirement age must be objectively justified.
Finally, the Code sets out a procedure to be used by employer/employee when dealing with a request to work longer than normal retirement age, which includes the following:
- the request should be made in writing no less than 3 months before the intended retirement age, to be followed with a meeting between employer and employee;
- decision to be communicated as early as practicable following the meeting;
- if the decision is to offer a fixed-term contract, the period should be specified, setting out the timeframe and the legal grounds underpinning the new contract should be made clear;
- if the decision is to refuse the request, the grounds should be set out and communicated in a meeting with the employee. The applicant should have recourse to an appeals mechanism, e.g. through the normal established grievance procedures in the organisation;
- an employee may be accompanied to a meeting by a work colleague or union representative to discuss a request to facilitate working longer and in any related appeals process.
The Code provides welcome guidance, particularly in light of the increasing tendency for employees to wish to continue working beyond the traditional retirement age. While it is not legally binding, it is likely to be very influential in any claims before the WRC concerning the application of retirement ages.
For further information on this topic please contact:
Senior Associate Employment & Employee Benefits Group
Direct +353 1 202 6428