Currently there is no general mandatory age an individual must retire at. Instead, individuals from the age of 66 years who have enough PRSI contributions can receive State Pension (contributory) payments. While the public service sector does have a compulsory retirement age of 70 years, there are no legal age limits for many private workers or for the self-employed.

Individuals who are eligible for State Pension payments from the age of 66 years can also have other income and continue to work at the same time.

Employers who do include an ‘age of retirement’ within their contract of employment must be able to objectively justify it on a case-by-case basis, should the employee wish to continue to be employed beyond that age. Equally, an employer who offers only a ‘fixed-term’ contract to an employee on reaching their retirement age must also be able to objectively justify that decision. Otherwise, an individual may have grounds for a claim for discrimination on grounds of age under the Employment Equality Act 1998, even where a specific ‘age of retirement’ is set out in their contract of employment.

Employers are advised to consult with their employees as they approach retirement age, particularly where they may simply expect an employee to retire, and/or where they wish to set out their own grounds for why they believe the employee should retire.

A recent WRC case saw a senior nurse awarded €85,000 for being forced to retire at age 65 years. Her contract stated “Retirement age is 65 years. Employment beyond retirement age is exceptional and only by agreement of the employer.” As the employee approached her 65th birthday, she received a letter from her employer stating that she would retire upon reaching her birthday, as per the company’s retirement policy. The employee wrote to her employer and stated that she wished to continue her employment without any change to her contractual terms. Her employer agreed to allow her to work for a further 12 months and issued her a “Post-Retirement Fixed Term Contract of Employment”. Her employer failed to justify or propose the grounds for offering her this type of contract. At the end of the fixed-term contract, the employee wrote to her employer to request a further extension, but the employer failed to engage meaningfully with her, or to provide any justifiable grounds for the non-renewal of her contract. The Senior Nurse retired compulsorily and brought her claim for age discrimination to the WRC and the case was subsequently found in her favour.

This acts as a firm reminder to employers to not presume an employee will automatically retire at the age set out in their contract. Employers must be able to objectively justify (such as on grounds of Health and Safety or via thorough Risk Assessment) the ‘age of retirement’ on a case-by-case basis, or their decision to offer ‘fixed-term contracts’ to those who may wish to continue in employment beyond that age. Open and timely communication between employers and employees is key to avoiding these kinds of difficult (and sometimes extremely costly) scenarios.

The Workplace Relation’s ‘Code of Practice on Longer Working’ offers employers useful guidelines on approaching retirement with employees and the variety of factors to consider.