Niamh Smyth (Cavan-Monaghan, Fianna Fail)

I apologise for being late but a vote in the Dáil delayed me. I thank Members for their patience.

I am pleased to have the opportunity to present the Bill for the consideration of the House following its recent successful passage through the Dáil. I will begin by providing some background to the Bill and put it in context. This Bill gives effect to a key Government commitment arising from the Pensions Commission's recommendations and implementation plan. While broader reforms to the State pension system are being led out by my colleague, the Minister for Social Protection, Deputy Calleary, this Bill addresses a specific gap in employment rights, namely the ability of workers to remain in employment until they reach the State pension age. Its purpose is to allow, but not compel, employees to remain in work until they reach pensionable age, which is 66, where they work under a contract that provides for a lower retirement age. The Bill creates a new statutory structure for employees to notify their employer of their intention to remain in employment until a later age, up to 66, where their contractual retirement age is lower.

Throughout the discussions in the Dáil, there has been keen engagement and a shared determination to strengthen protections for individuals nearing retirement. There was strong cross-party consensus on the core principles of the Bill in relation to enhancing the rights of older workers and the choices available for those nearing their contractual retirement age. These discussions have helped to ensure that the balance between worker and employer perspectives have been rigorously considered. The constructive engagement of Deputies was very much appreciated.

During discussions on the Bill in the Dáil Deputies broadly welcomed the measures that allow employees to remain in work until the State pension age. Issues which arose in the course of the debates included giving full access to the State pension at 65. This falls outside the scope of this Bill and is a matter for the Minister for Social Protection. This legislation deals exclusively with contractual retirement ages. I recognise the challenges posed by the income gap faced by employees who are required to retire before they can access the State pension. Addressing that gap by giving employees the choice to remain in work until the State pension age is a core objective of the Bill.

Deputies also raised the issue of abolishing contractual retirement ages in their entirety. This would substantially exceed the objective of this Bill and would potentially create a significant difficulty for employers in managing their workforce. It would make succession planning and providing career opportunities for other employees much more difficult. That said, I am strongly in favour of supporting workers who want to extend their working lives.Rather than them abolishing contractual retirement ages, I encourage employers and employees alike to have regard to the code of practice on longer working of the Workplace Relations Commission, WRC.

The Department has also worked alongside the WRC to develop a comprehensive information campaign for both workers and employers on the new rights and obligations arising from this Bill, once enacted. In addition, I expect that a new WRC code of practice will be developed clearly setting out the obligations arising under this legislation. This approach will support a smooth commencement of the Bill and ensure that the new right is implemented consistently and fairly.

I will now outline the main provisions of the Bill, which consists of ten sections, divided into four Parts. An explanatory memorandum has been published and provides a summary of the provisions. Part 1 of the Bill deals with preliminary and general matters. Sections 1 and 2 set out the Short Title of the Bill, commencement provisions and necessary definitions. Section 3 provides that the Bill applies to employees with a contractual retirement age that is below the State pension age and who have completed their probation. This section also explicitly excludes employees with a retirement age set out in law, such as members of the Garda or the Defence Forces, from the Bill’s effect. Section 4 is a standard provision relating to expenses incurred in the Bill’s administration.

Part 2 of the Bill sets out how this new employment right operates. Section 5 provides that employees may give notice to their employer that they do not consent to retire at a contractual retirement age below the State pension age. This notice period must be a minimum of three months but no greater than one year. An employer’s handbook may require a longer minimum notice period but this cannot be more than six months. Employees also have the right to change their mind. They can choose to withdraw the notification and retire. However, they must give the employer notice in accordance with their contract or minimum notice legislation, whichever is the shorter. When employers receive this notification, they cannot enforce the retirement age, except in limited circumstances. If the employer wants to enforce the contractual retirement age, it must give the employee a written reply that sets out an objective and reasonable justification for applying the retirement age to that individual employee. This exception recognises that there may be limited circumstances where it is necessary that a retirement age below the age of 66 applies. This fact was recognised by the Pensions Commission in its report. I want to make an important point here. The employer must be capable of justifying the retirement age for the individual worker as distinct from a general class of worker. The threshold to be met is, therefore, higher than is provided for in the Employment Equality Acts, which will continue to have effect more generally.

Part 3 sets out how employees can enforce their rights under this Bill. Section 6 sets out the complaints procedure, which is in line with other employment rights legislation. Employees will be able to refer a complaint and seek redress through the WRC if their rights under this Bill are breached. Where a complaint is well founded, the WRC may require the employer to take a specific course of action, including reinstatement or re-engagement. The WRC can also award compensation, with an upper limit of the greater of 104 weeks’ remuneration or €40,000. This is aligned with the compensation set out in the Employment Equality Acts for offences under that legislation. These compensation levels are designed not only to benefit an employee whose rights are breached, but to be sufficient and dissuasive to encourage employer compliance with the legislation. Section 7 makes technical changes to the Workplace Relations Act 2015 to provide for this complaint mechanism.

Part 4 relates to penalisation and offences. Section 8 protects employees from penalisation for exercising, or proposing to exercise, their entitlements. Section 9 states that employees’ existing rights under employment equality legislation are retained but redress cannot be granted by the WRC under both pieces of legislation. Section 10 makes it an offence for an employer to retire an employee having failed to provide a written, reasoned reply in response to the employee’s written notification.

In summary, the aims of this Bill are multiple. It will facilitate employees who wish to continue working beyond the normal retirement age of 65. It will bridge the income gap for those workers who may experience a significant drop in their income when they are required to retire before they can access the State pension. It will improve adequacy and predictability of income for older workers. I look forward to hearing Senators' views and to continuing our work on this important Bill.