Bosses can set blanket retirement ages

The case of Mallon v Minister for Justice [2024] clarifies the legality of mandatory retirement ages, write Lewis Silkin’s Síobhra Rush, (partner) and Sinead Likely (senior practice development lawyer, small picture).

The issue of retirement is one which comes up regularly for employers and has come under increasing scrutiny in recent years, particularly in cases before the Workplace Relations Commission (WRC) and the Labour Court.

Many employers still set a contractual retirement age, as is permitted under Irish employment equality legislation, where it can be objectively justified.

'Objective justification'

A challenge frequently facing employers is understanding how the concept of “objective justification” is to be applied when setting the retirement age (as the issue normally only comes up when the retirement of an employee is approaching).   

A decision which was handed down by the Supreme Court over the summer has been widely welcomed by employers and provided much needed clarity on whether the setting of a blanket mandatory retirement age can be objectively justified (by a legitimate aim, where the means of achieving that aim are necessary and appropriate).

In its decision, Seamus Mallon v The Minister for Justice, Ireland and the Attorney General [2024] IESC 20, the Supreme Court upheld the mandatory retirement age of 70 for sheriffs.

In doing so, it confirmed that no individual assessment was required when setting a retirement age and that such mandatory limits can be set in relation to defined groups based on general probabilities of age, health and competence.

While this case pertains to a retirement age in the public sector, it is also relevant for private-sector employers who still set a contractual retirement age and can continue do so for a particular group/workforce, (subject to being able to objectively justify it).

What is a mandatory retirement age?

Mandatory (or contractual) retirement ages are set according to the terms of the employment contract.

Employees in the public sector are subject to a statutory mandatory retirement age whereas, in the private sector, mandatory retirement ages will be discriminatory unless the employer can show that they have a contractual basis which are (

1. Objectively and reasonably justified by a legitimate aim, and
2. Methods employed to achieve this aim are appropriate and necessary.

To satisfy this, employers typically use rely on factors such as health and safety, inter-generational fairness, successions planning, creating a balanced age structure in the workplace, and so on.

Contrary to legislation

In the Mallon case, Seamus Mallon, a solicitor and revenue sheriff for Cavan and Monaghan since 1987, contested the mandatory retirement age of 70 which was specified in statute.

He argued that the mandatory retirement age of 70 was discriminatory based on age and claimed there were no sufficient objective and reasonable grounds to justify it, making it contrary to both Irish and EU employment equality legislation. 

The State argued that the retirement age was justified by legitimate aims, such as promoting efficiency in the public service and ensuring a predictable and orderly turnover of staff.

The High Court affirmed that the mandatory retirement age was justified and proportionate.

The court emphasised that the policy served several legitimate aims, including achieving intergenerational fairness and avoiding difficulties within the workforce occasioned by health and capacity issues.

Mr Mallon appealed to the Supreme Court which focused on several issues, the most relevant being:

• Whether the statutory provision setting the retirement age aligned with the EU Employment Equality Directive,
• The criteria for assessing the validity of mandatory retirement ages,
• The appropriateness of setting mandatory age limits based on general factors as opposed to individual characteristics on an individualised assessment.

The Supreme Court concluded that the relevant statutory provision setting the retirement age pursued legitimate aims such as, in this case, effective succession planning and maintaining intergenerational fairness.

It found the mandatory retirement age of 70 appropriate and necessary, and rejected the proposal that there was a need for individual assessments in setting that age.

The Supreme Court emphasised that requiring individual assessments would, in fact, undermine the consistency and predictability provided by a general retirement age rule and substantially negate the benefit of having such a rule in the first place.

Departure from individual assessments

It was in the 2008 case of Donnellan v Minister for Justice, Equality and Law Reform and Others [2008] IEHC 467, that it was suggested that individual assessments would be preferred over setting blanket retirement ages  where possible.

There had been a growing number of age discrimination cases before the WRC since Donnellan where the WRC emphasised the importance of considering mandatory retirement on an individual basis in determining whether the imposition of the mandatory retirement age was proportionate.

What is most significant about the Supreme Court decision in Mallon is that it clarified that an employer is not, in fact, required to justify the application of a general retirement age to an individual employee on a “case by case or role by role assessment”.

It also does not require that such individual assessment must be shown by an employer to be impractical if a generally applicable retirement age is to be justified (which is what Donnellan had determined).

The Supreme Court pointed out that recent CJEU rulings did not support this approach, and that avoiding individual assessments can be a legitimate way to prevent disputes and maintain dignity, marking a notable shift from the Donnellan approach.

The decision emphasises that a mandatory retirement age is acceptable if the policy is justified by legitimate aims and is applied proportionately.

What does this decision mean?

For the future, this means that employers can set a mandatory retirement age without needing to conduct individual assessments for each individual employee.

If the retirement age is objectively justified by legitimate aims, it will be considered lawful.

This simplifies the process for employers and provides clear, predictable rules for employees about when they will retire.

Fair and justified

However, it also places an onus on employers to ensure their retirement policies are fair, justified and proportionately applied.

And it’s important for employers to remember it does not remove the requirement to consult individual employees who are approaching their retirement age to determine their plans in accordance with the WRC’s Code of Practice on Longer Working.

Bosses should also have regard to Irish Human Rights and Equality Commission (IHREC) guidelines on offering fixed term contracts to retiring employees.

This decision, together with other recent measures that have been introduced, or planned (in particular, the Government’s recently announced plans to introduce legislation allowing employees to work until the State pension age, if they wish) are significant developments in mandatory retirement ages.

• Síobhra Rush is head of Lewis Silkin’s Dublin office and has been practising in employment law for over twenty years in both contentious and non-contentious matters. She regularly appears in the Workplace Relations Commission, the Labour Court and the Civil Courts in various employment disputes, and is chair of the Law Society Employment and Equality Committee.
• Sinead Likely (small picture) is senior practice development lawyer in Lewis Silkin’s Dublin office and is part of a specialist team of lawyers keeping clients up to date with developments in employment law.