General Scheme Employment (Restriction of Certain Mandatory Retirement Ages) Bill 2024 (“the Bill”)

Application of the Bill

The Bill, once drafted, will apply to clauses in contracts of employment, which oblige an employee to retire at an age which is below the age at which the employee can first access the State Pension. The current pension age is 66 years.

The General Scheme confirms that the Bill, once drafted, will provide the following:

1.      Where an employee does not consent to the enforcement of a mandatory retirement age in a contract of employment earlier than the pensionable age, that clause shall be deemed to prescribe the mandatory retirement age as–

i.                    the pensionable age

ii.                  where the employer consents to retire at an age which is later than the mandatory retirement age but before the pensionable age, as that age.

2.      Employees must serve written notice to the employer, within certain notice periods, if they do not consent to the mandatory retirement age as set out in their employment contract.

3.      If an employee provides this written notice to the employer, the employer must not retire the employee before a date to which the employee consents or before the employee has attained the State Pension age, whichever occurs first in time.

4.      Where an employee does not provide this written notice to the employer, the employer may take it that the employee consents to retire at the mandatory retirement age.

5.      An employee may withdraw their written notification at any point, but they must notify the employer as set out in their contract of employment or as set out in the Minimum Terms of Notice and Terms of Employment Act 1973.

Unfair Dismissals Act 1977 (“the 1977 Act”)

The General Scheme confirms that the 1977 Act will be amended to ensure employees who are forced to retire at an age which is below the State pension age without their consent will have the right to seek redress under the 1977 Act.

The 1977 Act will not apply to a situation whereby an employee is dismissed, and they had reached a retirement age which is set out in law e.g., members of the Defence Forces must retire at 60.

Employment Equality Act 1998 (“1998 Act”)

Under the 1998 Act an employer can set a retirement age but only in circumstances where it can be reasonably and objectively justified by a legitimate aim, and the means of achieving that aim are appropriate and necessary. The 1998 Act does not specify any retirement age and there is no link with the State Pension age. This means an employee over the State Pension age may seek protections under the 1998 Act if their employer seeks to compulsorily retire them.

Under the General Scheme, the 1998 Act will not be restricted by the amendments in the Bill. Where an employee has served written notice to an employer that they do not consent to retire at the mandatory retirement age set out in their contract and, even with that notification, the employer dismisses the employee, the employee may make a complaint under section 77 of the 1998 Act.

An employer cannot rely on the exemption in section 34(4) of the 1998 Act, unless they can establish that the dismissal was justified by the existence of a legitimate aim, and that the means of achieving that aim are appropriate and necessary in relation to the employee concerned.

Click here to access the General Scheme of the Bill.

For further information on this topic please contact Cómhnall Tuohy or any member of the Employment Team.

This Article has been prepared by Kane Tuohy LLP on 27 March for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.