The Use of Mandatory Retirement Ages – Update from the A&L Goodbody Employment Team

Following the Irish Ferries case which we reported on (recap), the Labour Court has issued its decision in Transdev Light Rail Limited v Michael Chrzanowski, in favour of an employer who enforced a mandatory retirement age of 65. The Labour Court affirmed the decision of the Equality Officer in this case.

Speedread

  • The employer successfully defended a claim by a former employee who alleged that he was directly discriminated against on the grounds of age when he was compulsorily retired at age 65.
     
  • The fact that a mandatory retirement age was alleged to be in place was sufficient to shift the burden of proof from the Claimant  to the employer to prove that the practice was not discriminatory although ultimately the Claimant was unsuccessful.
     
  • The compulsory retirement age was not expressly set out in the contract of employment but it was deemed to be an implied term of the contract of employment as a result of an established custom and practice evidenced by a consistent application of the mandatory retirement age since 2010, its inclusion as an express term in the Company pension scheme, its inclusion as an express term in more recent contracts of employment and the incorporation of the term in a collective agreement entered into between the union representing the employee and the employer.
     
  • That said, the employer successfully invoked the safety critical nature of the role as a Luas driver and the requirement for the equitable distribution of employment opportunities between generations as the objective justifications for the selection of age 65 as a compulsory retirement age.  It was noted that the employer had sought medical advice on two occasions in 2010 and 2014 when considering an amendment of the mandatory retirement age and that the employer had complied with the medical guidance.
     
  • The case contains a useful analysis on the case law around objective justification of retirement ages and on the "genuine occupational requirement ("GOR") ground.  The law allows employers to use the GOR ground as a defence to direct age discrimination if they can show that possessing a characteristic related to age is a genuine and occupational requirement, and it is proportionate to apply that requirement in the particular case.

Briefly, what was the case about?

  • The Claimant was a Luas tram driver who was required to retire at age 65.
     
  • The Claimant wished to remain employed as a tram driver on a fixed term contract for a two year period post retirement however this was refused.
     
  • His contract did not contain an express clause imposing a mandatory retirement age of 65. However, his pension scheme specified 65 as the normal retirement age.  Further, the employer had consistently applied the mandatory retirement age of 65 over a period of several years.
     
  • The Claimant sued the employer under the Employment Equality Acts, 1998 – 2012 claiming that he had been discriminated against on the grounds of age.

What did the Claimant say?

  • The Claimant argued that he had a legitimate expectation of remaining in employment beyond the age of 65 and he identified two other employees who had done so.
     
  • He disagreed with the Respondent's position that the Railway Safety Act 2005 required him to retire at age 65. His position was that it stated that safety critical workers must undergo an assessment by a medical practitioner to determine their fitness to perform safety critical tasks but it does not stipulate that they must retire at age 65. He also cited as a comparator, a transport provider, where train drivers retire at 66 in support of his claim that it was unlawful to be forced to retire at age 65.

Ok, so what did the employer say to that?

  • The Respondent employer claimed that age 65 was the established retirement age for all of its employees. It showed that this practice had been consistently applied and that it was an implied term in the Claimant's contract of employment and also an express term of the collective agreement which in turn incorporated the terms relating to the occupational pension scheme, of which he was a member.
     
  • The Respondent employer relied on section 34(4) of the Employment Equality Acts 1998-2011 in support of its position and European caselaw. Section 34(4) allows employers to fix mandatory retirement ages. However, further to the well-established authority in the Palacios della Villa case, the effect of Article 6(1) of Council Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation (the Directive) is that employers are required to ensure that the imposition of a mandatory retirement age is objectively justified, proportionate and necessary per Article 6:

 "differences of 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."

What objective justification did the employer rely on?

The Respondent employer argued that the imposition of a mandatory retirement age of 65 was objectively justified in that:

  • Tram drivers are "safety critical workers". As such, it is necessary that they are in a position to perform their roles safely to ensure the protection of the health and safety of tram drivers, passengers and the general public. The Respondent relied on up to date medical advice to establish this.
     
  • It argued that the mandatory retirement age promotes better access to employment by means of better distribution of work between the generations and as such allows for more efficient workforce planning (in particular in terms of succession planning and recruitment drives). In this regard, it was noted that the Respondent began recruiting a replacement for the Claimant approximately 8 months before he was due to retire to ensure that a replacement would be trained up in time and to ensure that resourcing levels agreed with the trade union were met;
     
  • It said that there is a genuine and determining operational requirement for a tram driver to be young enough to carry out his/her role safely.  Evidence from an expert in occupational health and medical evidence was produced which showed that the ability to operate a tram safely diminishes with age and this is supported in the frequency with which tram drivers are expected to undergo health surveillance examinations. The Respondent also produced data which disclosed the increased frequency of medical testing and screening for employees over the age of 50. It also produced data showing the trends of increases absences due to illness for employees aged over 60.

So what did the Labour Court say?

The Labour Court accepted the arguments of the employer and found, on the facts, that the use of mandatory retirement age of 65 for tram drivers did not constitute unlawful discrimination.

So what are the key takeaways from this judgment?

  • The Respondent was entitled to rely on the mandatory retirement age of 65 even where the mandatory retirement age was not expressly set out in the contract of employment. The Court found that through custom and practice a mandatory retirement age of 65 could be implied into the contract. The Court also noted that the mandatory retirement age was incorporated into a collective agreement which the employee had signed and which in turn referred to the terms occupational pension scheme, which included a mandatory retirement age of 65. The Court also applied the principles set out in the case of Earagail Eisc Teo v Richard Lett ( EDA 1513) where it held that a term of employment regarding a retirement age can be provided in an employee's conditions of employment,  either expressly or by implication.
     
  • The Court was not convinced that two other examples of the Respondent engaging post retirement age employees on fixed term contracts gave rise to a legitimate expectation on the part of the Claimant that he would be offered a fixed term contract. The Respondent produced evidence that one tram driver was retained on a fixed term contract but had medical issues shortly after and ceased to work with the Respondent. The other employee was not engaged to carry out a safety critical role. Accordingly he was not in a comparable situation.
     
  • With regard to the concept of the GOR, the Court accepted the medical data and other evidence which demonstrated that the ability to safely operate trams as a driver diminishes with age. It accepted that protecting the safety of drivers, passengers and the general public was a legitimate and proportionate aim requiring retirement at 65. The Court noted the medical evidence of the Respondent's occupational medicine expert to the effect that age associated changes and visual perception are associated with conditions that  increase the risk of driving for older workers. This medical evidence was not disputed by the Claimant.
     
  • In relation to the choice of comparator, the Court found that the transport company chosen as a comparator by the Claimant was inappropriate. When the Claimant was compulsorily retired in 2014, the age of retirement in the comparator company was also 65 (it was only amended to 66 in 2016). The Court found that the Claimant could not rely on a change to the retirement age in the comparator company which was only implemented two years after his claim was filed. It also was deemed to be an inappropriate comparator company as it did not meet the test of "associated employer" under the Employment Equality Acts.
     
  •  The Court held that it was reasonable for employers to have a legitimate interest in workforce planning.  As noted, eight months before the Claimant's retirement, the Respondent engaged in the recruitment of new tram drivers to meet the appropriate manning levels necessary for its business and in sufficient time to allow for training in. The Court found this evidence satisfied the objective of promotion of workforce planning and access to employment for a new generation of workers.

Taking the medical evidence, the workforce planning requirement and the collectively agreed terms of the pension scheme into consideration, it found that the compulsory retirement age applied to the Claimant was justified. The case is a useful reminder of the reasons that may be accepted by a Court together with the supporting data that an employer needs to produce to justify a mandatory retirement age.

For more information please contact the A&L Employment Team.

Date Published: 26 January 2017