retirementThe recent Equality (Miscellaneous Provisions) Act cites “….it shall not constitute discrimination on the age ground to fix different ages for the retirement (whether voluntarily or compulsorily) of employees or any class or description of employees if –

(a)  it is objectively and reasonably justified by a legitimate aim, and

(b)  the means of achieving that aim are appropriate and necessary.”

So once the employer can justify the dismissal of an employee in this regard, this should not be a risk of potential claims of discrimination.

The followings are objective grounds accepted by The European Court:

  • Health and safety concerns
  • Succession planning
  • Establishing an age balance in the workforce. encouraging recruitment of young people and preventing disputes about the performance of older people;
  • Inter-generational fairness or preserving the dignity of older workers;
  • Motivation and dynamism through the increased prospect of promotion;
  • Encourage the recruitment and promotion of younger people;
  • Avoidance of having to engage in capability / performance management;
  • Creating opportunities in the labour market for persons seeking employment.

Sometimes employers offer fixed term contracts to those employees who are retiring, this contracts will be for a period after their retirement. In this case, employers must be aware of the implications of renewing fixed-term contracts. Renewing contracts that exceeds 4 years, may become contracts of indefinite duration, saying this, on expiry of such a fixed-term contract, the employers will have to be in a position to objectively justify a decision not to renew the fixed-term contract for a further fixed-term.

Under this legislation, the employers will have to objectively justify why offering a fixed term contract instead of allow the employee to continue working under his/her previous contract.