Aodhán Ó Ríordáin (Dublin North Central, Labour) | Oireachtas source

The Government will not oppose the Employment Equality (Abolition of Mandatory Retirement Age) Bill 2014 sponsored by Deputy Anne Ferris. I congratulate her on the work she has done on this issue and I look forward to discussion on the detail of the Deputy’s proposals on Committee Stage.

Age discrimination should not be countenanced. I am the Minister of State with responsibility for equality, and equality issues are dear to my heart and central to my reason for being in politics. However, there are serious policy issues in this proposal which need careful consideration. A simple change to equality legislation may not be the vehicle in which to capture all the nuances that need to be taken into account and all the legitimate interests that need to be balanced when we think about work and retirement issues. The Bill is presented as an amendment to equality legislation that would have the effect of abolishing mandatory retirement ages, save in specified security related employment. Those security related exemptions in respect of An Garda Síochána, the Prison Service, fire services and so on are welcome and necessary, and this reflects the position in existing equality legislation.

This would be a radical step and the issues that arise in considering such a radical measure as is proposed in the Bill are not fundamentally equality issues but have wider ramifications. The proposal in the Bill would involve setting aside the retirement provisions of most existing employment contracts on a unilateral basis and would have serious implications for public sector employment, pensions policy and labour market policy generally. It would appear from our reading of the Bill that the setting aside of existing employment contract provisions would operate on the basis that the employee still had a choice to retire at the contractual date whereas the employer would not have a choice. This arises due to the interplay between compulsory and voluntary retirement in the precise text of the proposed amendments. That seems to be very problematic from a legal point of view. State intervention in private contracts to abolish on a unilateral basis the retirement arrangements entered into by the two parties would be of doubtful legality and would need careful consideration following comprehensive legal advice. A one-sided abolition raises even more serious doubts as to its fairness and constitutionality. We will need to think carefully about the objective we are trying to achieve and whether we can find other approaches that avoid legal pitfalls.

It is important to note that EU equality law provides expressly for compulsory retirement ages. When the EU Framework Employment Directive 2000/78/EC, which outlaws age discrimination in employment, was transposed into law by the Equality Act 2004, reliance was placed on the wording of Recital 14 of the Directive, "(14) This Directive shall be without prejudice to national provisions laying down retirement ages", to conclude that it was not necessary to amend section 34(4) Employment Equality Act 1998, "Without prejudice to subsection (3), 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."

However, case law of the Court of Justice of the European Union, CJEU, has since established that national provisions laying down retirement ages could amount to age discrimination if they cannot be justified under the specific terms of the directive. In particular Article 6.1 entitled “Justification of differences of treatment on grounds of age” provides that:

Member States may provide that differences of treatment on grounds of age shall not constitute discrimination, if, within the context of national law, they are objectively and reasonably justified by a legitimate aim including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary.

The CJEU has, in the course of a series of judgments, applied this test to national compulsory retirement schemes. The High Court, the Labour Court and the Equality Tribunal have applied this test in Irish cases. As a result, the text of section 34(4), which I quoted and which seems to give carte blanche to employers to set any age as a retirement age, does not reflect the law as it is actually applied.

The opportunity of the Equality (Miscellaneous Provisions) Bill 2013 is being taken therefore to amend section 34(4) to reflect the law as interpreted by the CJEU. The new text as accepted by the Seanad will read:

(4) Without prejudice to subsection (3), 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.

The Bill has finished all Stages in the Seanad and is awaiting Dáil time. I am advised that this amendment, which focuses on the same section that Deputy Ferris’s Bill addresses, will go as far as it is appropriate to go in regulating retirement ages from an equality perspective. After that, the advice from the Department of Justice and Equality and the other Departments with central policy concerns is that the issue becomes too complex, with a range of interests and policy objectives to be balanced, for equality legislation.

The essential point is that our national retirement age regime must be considered in the wider context of national employment policy, labour market and vocational training objectives and national pension policy. These extend across the whole of Government. In no particular order of importance, the relevant issues in respect of which there would be implications that need careful consideration by the relevant policy Departments are as follows. In terms of pensions policy and pension schemes, the immediate implications for affordability may be positive as persons expected to retire shortly choose not to do so, but there may be implications for pension contributions calculated actuarially which could have an opposite effect. In employment law, the retirement clause in existing contracts would be made void without reference to the wishes of the contracting parties. The detail of the Private Members’ Bill would allow an employee discretion to retire at the previously envisaged age but leave no choice for an employer. Voiding a contractual agreement in such a one-sided way may itself be legally problematic. In respect of labour market and employment policy, the consideration is whether a reduction in expected numbers leaving employment may reduce opportunities for young people or advancement opportunities for people at an earlier stage of their careers. Youth employment remains a priority challenge.

Older workers must be protected against discrimination. Our law and EU law allow for compulsory retirement ages, provided these can be objectively justified. Putting in place a clear national policy framework to help the State, employees and employers to know the appropriate balance in specific circumstances requires us to consider the range of relevant objectives, including competing objectives if one looks at the problem of youth employment, for example. I look forward to the detailed examination of these issues on Committee Stage and to the contributions of other Deputies in the debate.

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