Case Name: William O’Mara v College Freight Limited T/A Target Express Ireland (UD 1371/2009)
Legislation: Unfair Dismissals Acts, 1997 TO 2007 (the “Acts”)
Jurisdictions/Subject Matter: Enforced Retirement

Facts

The Respondent employer was involved in the transport of goods for customers around the country, employing office staff, drivers and warehouse operatives. Sub-contractors were also hired, supplying their own vans and insurance and invoicing the employer for their services. The employer had depots in Ireland and in the UK.

This case was held in conjunction with another claim (UD 1395/2009) involving the same employer but a different claimant. The separate claimants were referred to as “W” and “J”. The employees represented themselves.

W was employed as a driver and J was employed as a warehouse operative for the Dublin depot.

The Human Resources Director (“HR”) gave evidence and explained that the work involved in the employer’s business was labour intensive. HR told the Tribunal that prior to 2007, it was the custom and practice for employees to retire at 65. In 2007, laws were changed in the UK and a Retirement Policy was introduced for all employees, including those employed in Ireland. HR stated that all employees were aware of this but it was not specifically highlighted to them until nearer their retirement. HR stated that the policy, along with all other policies, was displayed for all staff to read in each depot. HR also told the Tribunal that the insurance policy covering all drivers was an open plan covering employees with a full driving licence between the ages of 21 and 65.

HR went on to explain to the Tribunal that the computer system containing all employee details suffered a technical glitch in late 2008 and altered some 400 employees’ details giving them the same start date and an age of 45. When all the files were being checked and corrected, it was discovered that 2 or 3 employees had reached the age of 65 and retirement was discussed with them. HR stated that drivers in particular had to retire at 65 as they were not covered by the employer’s insurance policy.

HR told the Tribunal that the entire company was going through a restructuring process and a third of employees were let go in the Dublin area. HR stated that due to exceptional circumstances, two particular employees were employed beyond their 65th birthday. One of these employees was kept on as a warehouse operative to deal with one of the employer’s biggest clients and the other employee, who had been a driver, became an operative and key holder in a small depot near his home.

In respect of J, HR said that he had never communicated to management that he wanted to remain working beyond 65 and that he had previously made a request to be given “lighter duties”.

In relation to W, when it was put to HR that the employer should have known that he was 65 as they had a copy of his driver's licence, HR claimed that the “glitch” in the computer system prevented them from knowing this. HR confirmed that W had requested to stay on for another few months.

HR told the Tribunal that the employer did not have written confirmation that all employees had read the retirement policy and that it was not something which would have been discussed at interview level.

The Dublin Depot Manager (“DM”) for the employer then gave evidence. DM had met with and discussed retirement with both J and W. DM stated that J was aware of the retirement policy and as a result had been carrying out lighter duties for some time. With regard to W, DM said he had suggested to him that he could remain working as a sub contractor for the employer but W rejected this offer.

W told the Tribunal that he was called into a meeting with DM one week after his 65th birthday and given the option of becoming a sub contractor. Due to family circumstances, this was not a viable option. W said that DM told him he would make a representation to the Board of Directors for him to remain working. When W brought up the subject of the 2 other employees who remained working after their 65th birthday, W alleged that he was told they would not be there for much longer.

W told the Tribunal that he contacted the Respondent’s insurance company and that he was told that there was no age limit for drivers on the employer’s policy. W was not offered any redundancy package and he gave evidence of his losses.

J told the Tribunal that he had informed the employer in early 2008 about retirement as he had personal problems which meant he would need to remain working beyond 65. He said that the employer never got back to him. J also gave evidence of having spoken to his Line Manager who allegedly told him that he would receive a letter closer to the time telling him if he could stay or would have to retire. J submitted that he heard nothing about his retirement until 19 February 2009 and that he was not aware of the employer’s retirement policy. J said that he had been made aware of a driver employee in Limerick who was still working at the age of 67. J said he had expected to remain working for the employer for a number of years and he gave evidence of loss.


Determination

The Tribunal, having heard all the evidence, concluded that there was no retirement clause in either J or W’s terms and conditions of employment. The policy document referred to by the employers throughout the hearing was not produced to the Tribunal nor was it given to the claimants J and W. Furthermore, in examining the open drive insurance policy which the employer alleged did not permit anyone to drive beyond their 65th birthday, the Tribunal adduced evidence from an email dated 17 June 2010 stating that there was in fact an option to extend the age limit on the policy subject to an increase in the premium.

The Tribunal was not satisfied that the company had a retirement policy or even a comprehensive custom and practice in relation to retirement. No notice was given to W either before on or directly after his 65th birthday. Further, the Tribunal was not satisfied that the employer’s insurance policy was as restrictive as it was alleged to be.

In finding that the claimant W was unfairly dismissed, the Tribunal awarded him the sum of €33,500. J was awarded €19,500 by the Tribunal. Full decision:
http://bit.ly/ese8vB


Legal Review

Despite popular belief and unlike the UK currently, there is no statutory retirement age for employees in Ireland.

Section 2(1) (b) of the Unfair Dismissals Acts excludes from the application of the Acts “an employee who is dismissed and who, on or before the date of his dismissal, had reached the normal retiring age for employees of the same employer in similar employment or who on that date was a person to whom by reason of his age the Redundancy Payments Acts, 1967 to 1973, did not apply”.

The ‘‘normal retiring age’’ has been considered by the EAT and it concluded that the term means a definite retirement age in the relevant employment. The EAT will examine the custom and practice of an employer and whether the employer enforces its contractual retirement age. An employer's contractual retirement age will be ignored by the EAT if in practice employees are regularly allowed to work beyond the contractual retiring age.

As detailed in the above EAT case, employers need to be aware that if they do not implement their compulsory retirement age, the employer may be creating a new policy or practice where employees can expect to retire at a higher age than that detailed in their contract of employment.

The Employment Equality Acts 1998 – 2007 provide employers with the discretion to fix retirement ages and an employee’s retirement age is usually set out in their contract of employment. Some contracts of employment do contain a mandatory retirement age (i.e. a specific age at which the employee must retire). The standard retirement age in contracts of employment is 65. However, they may also contain provisions for earlier retirement.

If a contract of employment contains a clause expressly stating a retirement age, an employer can rely on this clause in defending any potential claims for unfair dismissal.

Section 34(4) of the Employment Equality Acts state that “it shall not constitute discrimination on the age ground to fix different ages for retirement (whether voluntarily or compulsorily) of employees or any class or description of employees”. However, the position in EU law differs slightly and Directive 2000/78 states that a Member State may provide that different treatment on grounds of age shall not constitute discrimination if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary.

As Ireland does not have a mandatory retirement age for all workers, private sector employers in Ireland need to consider what retirement age is appropriate for their business and implement that. Private sector employers are subject only to domestic legislation, so until legislation changes, they are entitled to rely on it. Public bodies (“emanations of the state” in EU speak) though may be in a different position, as some EU Directives can be directly applicable to them, if the Directive is clear enough, under the so called “Francovich principle”.