Compulsory Retirement: High Court reminds employers of an essential prerequisite

Speedread

Within the last two weeks, the High Court has issued a judgment which serves as a useful reminder that when it comes to the proposed retirement of an employee, the first issue an employer needs to consider is whether it is actually entitled to retire the employee at all. 

In Quigley v Health Service Executive ¹ the High Court granted an interlocutory injunction to restrain the HSE from dismissing an employee who contended that he was not contractually required to retire at age 65.    

A contractual retirement age - an essential prerequisite

In Quigley the High Court had to consider whether a general practitioner who specialised in treating patients with substance abuse could, as a matter of contract law, be required to retire at age 65 in circumstances where his contract did not specify a retirement age. The general practitioner in question had worked for the HSE for 19 years and was only informed of his impending retirement 3 weeks prior to his 65th birthday. He subsequently sought an interlocutory injunction to restrain his dismissal pending the hearing of his High Court challenge to his forced retirement. 

In defending the injunction application, the HSE contended that the requirement to retire at age 65 had been implied into the general practitioner's contract of employment. Specifically, it contended that, as a long-standing permanent officer of the HSE, he must have known that he had to retire at age 65, the statutory retirement age for permanent officers who joined the public health service at the time he did. The fact the general practitioner was in a position to adduce evidence that no other general practitioner employed on the same contract as he was employed on had been retired at age 65, and that two doctors who worked in the area of substance abuse were over age 65, fatally undermined the HSE's arguments in this regard.

The High Court was ultimately not satisfied that a retirement age could be implied into the general practitioner's contract of employment and granted the injunction sought.  

Implied retirement age - a last resort

The decision of the High Court in this case can be contrasted with that of an earlier High Court decision dating back to 2010 also concerning the HSE, in which the Court found an employee had been lawfully retired pursuant to an implied retirement age.

In McCarthy v Health Service Executive ² the High Court rejected a radiographer's application for an order quashing the decision of the HSE to terminate her employment on the grounds that she was not required to retire at age 65. The High Court accepted that, although the radiographer did not have a written contract of employment, a retirement age could be implied into her contract of employment. The Court was not convinced that the radiographer did not know of the ubiquity of the retirement age of 65 within the HSE. Furthermore, the Court concluded that even if she was not aware of this, she should have known of this or could easily have found this out had she made appropriate enquiries.

The Court's willingness to imply a retirement age into the radiographer's employment seems to have been heavily influenced by the fact the superannuation scheme of which she was a member made reference to a retirement age of 65 and, more specifically, a cut off for pension contributions at that age.

Significance for employers

The recent High Court decision in Quigley serves as a useful reminder to employers that when planning retirements, it is essential that it is first established that an employee is in fact contractually required to retire at a set age. While the absence of an express retirement age is not necessarily fatal, as the Quigley cases demonstrates, it can be difficult in practice to establish a retirement age is implied, particularly if other employees have worked beyond this age.

Even if the contractual retirement age hurdle can be cleared, employers need to be aware that a mandatory retirement can still be subject to challenge on age discrimination grounds or under the Unfair Dismissals Acts. In our experience, age discrimination claims are becoming the norm, rather than the exception and, in the absence of a retirement age being objectively justified, an employer can be exposed to significant liability under the Employment Equality Acts in respect of forced retirements. 

Mandatory retirement – on the way out?

The appropriateness of employers being able to retire employees on attaining a fixed retirement age is under considerable scrutiny at the moment, with the Citizens Assembly having recently recommended to the Government that it should abolish mandatory retirement ages. This recommendation follows on from a Government decision earlier in the year not to oppose a Sinn Féin bill which, if enacted, would abolish mandatory retirement ages in the workplace.

While it remains to be seen if the Government will take action to outlaw compulsory retirements, for the time being at least, employers are permitted to retire employees on attaining predefined retirement ages provided those ages are incorporated into employees' contracts of employment and can be objectively justified.

With the groundswell of public opinion in favour of the abolishment of mandatory retirement in the workplace, we expect legislative developments in this area in 2018. We will keep you posted!  

For more information, please contact Michael Doyle or your usual contact on the A&L Goodbody Employment Team.  

Date Published: 8 November 2017