New Code of Practice on the management of retirement/longer working
The Code sets out best practice in the run up to retirement and dealing with requests to work beyond retirement
The change in the qualification age for the State pension to 66 in January 2014 makes the issue of mandatory company retirement age (traditionally 65 in many organisations) a more complicated issue. There has been an increase in the number of workers seeking to remain in their jobs beyond retirement age, which is a trend that is likely to increase given that the State pension age is set to increase further to 67 in 2021 and to 68 in 2028.
The Workplace Relations Commission (WRC), published a Code of Practice (the Code) on working longer.
The Code sets out best practice in the run up to retirement and dealing with requests to work beyond retirement. In summary, a mandatory company retirement age 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. The Code cites some examples of what case law has found to be legitimate aims including inter-generational fairness, succession planning, health and safety (for health and safety critical operations), dignity (avoiding capability issues with older employees).
When an employee is approaching retirement, the Code advises that it is good practice for an employer to notify an employee of the intention to retire him/her on the contractual retirement date within 6-12 months of that date, thereby allowing sufficient time for planning and arranging advice on succession. The Code sets out the procedure to be used by both sides when dealing with a request to work beyond the normal retirement age, e.g. it requires an employee to make a request in writing no less than three months from the intended retirement date to be followed up with a meeting between the employer and employee. The Code further provides that an employee should be given the option of being accompanied to a meeting by a work colleague or union representative to discuss a request to the employer to facilitate working longer and in any appeals process around same.
“Best practice” is set out in the Code under the following 4 headings:
Utilising the skills and experience of older workers
The Code makes it clear that by managing an older and diverse workforce in a positive way, businesses can deliver great value by harnessing and accommodating the experience and skills of older workers to the advantage of the business by way of various measures set out in the Code.
There is no statutory retirement age in the private sector. The termination of an employee as a result of age could be construed as discrimination and therefore compulsory retirement ages must be capable of objective justification.
The Code refers to section 34(4) of the Employment Equality Acts 1998-2015 (EEA) and provides some helpful examples of what constitutes a legitimate aim in objectively justifying setting retirement ages. This includes:
- Intergenerational fairness and motivation - to allow for the promotion of younger workers
- Health and safety considerations
- Creation of a balanced age structure across the workforce
- Dignity considerations - to avoid capability issues, and
- Succession planning.
The Retirement Process/Retirement Arrangements
When an employee is approaching retirement, the Code confirms that best practice is to notify him/her in writing, six to twelve months in advance of the intention to retire him/her on the contractual retirement date. The Code also encourages employers to consider the provision of supports such as pre-retirement courses, flexible working arrangements and/or counselling to assist the employee’s transition to retirement.
Dealing with Requests to Work Longer
The Code includes advice for employers on responding to requests from employees seeking to work beyond retirement age which should be considered carefully against a number of criteria set out by the Code. A Request to Work Longer Procedure is detailed in the Code.
The Code is not legally binding but is likely to have probative/evidential value in any cases dealing with compulsory retirement.
For any queries please contact Sinead Harrington at 01-6770335 or email@example.com.