Complainant

Respondent

Anonymised Parties

Marine Pilot

Port Company.

Representatives

Solicitors.

 Ibec

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 77 of the Employment Equality Act, 1998

CA-00006567-001

22/08/2016

The Complainant was employed as a Marine Pilot from 4th October 2004 to 15th March 2016. He was paid €7,201.00 per month.

This complaint was originally heard by an Adjudication Officer in the Workplace Relations Commission on 11/04/2017 and a Decision issued on 31/05/2017. This Decision was then appealed to the Labour Court and was the subject of a hearing on 20/02/2018. The Determination of the Labour Court, issued on 22/02/2018, set aside the Decision of the WRC Adjudication Officer and the matter was referred back to Workplace Relations Commission for hearing by an Adjudication Officer.

The termination of his employment by way of retirement is not expressly regulated by his contract but by statutory provisions contained in the Harbours Act 1996 as in force at the time of his recruitment and after 3rd July 2010 as amended on that date by section 93 of the Merchant Shipping Act 2010 which provides for the “Medical Fitness of pilots and repeal [of section 69 of the Harbours Act 1996]”.

The Complainant was employed as a temporary pilot on and from 4th October 2004.   He was enrolled in the superannuation scheme and he believes he was given a copy of the pension scheme documentation at that time. There was never any suggestion made to him at that time, or at any time, that the terms of the pension scheme affected his contract of employment other than to confer the benefits of the scheme on him.

On 8th February 2007 he was offered a position as a permanent pilot under terms and conditions set out in a collective agreement between the company and the pilots dated 1st June 2006 and an overall agreement between the trade unions and the company dated 18th June 2002.

On 27th April 2007 he accepted this offer. He suffered a serious reduction in pay on becoming a permanent pilot and brought an application to the Labour Court who decided that the terms and conditions of his temporary contract did not continue into his permanent contract.   There was no retirement age expressed in his permanent contract. He continued as a member of the superannuation scheme.

The Complainant acknowledges that from time to time he would have received a statement of his accruing pension benefits but he did not notice the discrepancy between the statement, which apparently specified a normal retirement age of 60, and the pension scheme documentation which defined “normal retirement age” of 65 for the purpose of pension calculations.

The Complainant was aware at that time the Harbours Act 1996 specified that a pilot shall retire from such employment on reaching 60 years of age.

As a member of the Association of Marine Pilots of Ireland (a non-union professional organisation) he was aware that the law regarding retirement age for pilots in Section 69 of 1996 Harbours Act was repealed by Section 93 of the Merchant Shipping Act 2010 enacted on 3rd July 2010 which replaced the mandatory retirement age of 60 with the new requirements for medical fitness of pilots based on the international standards of training certification and watchkeeping convention (STCW). This repeal followed lobbying by the AMPI that a mandatory retirement age was discriminatory.

On 15th March 2011, he turned 60 however despite numerous requests to his line manager, the Harbour Master and the HR Department it was not until the week before 15th March 2011 that he was verbally advised by the Harbour Master that his employment would continue.

The Complainant acknowledges that from time to time he would have received benefit statements such as that dated 22nd May 2015. He will say that he is now aware that his statement specified a normal retirement age of 65 but as he has already told the Workplace Relations Commission adjudicator, this change in the benefit statements after the change in legislation was not brought to his attention and there was never any agreement made with either him or his union which would have established a new retirement age of 65. As far as he was concerned his retirement would now be regulated by the medical fitness provisions of the Harbours Act which has replaced the mandatory retirement age of 60.

The Complainant will refer to the provisions of the pilotage agreement and say that when a pilot is retiring by agreement or by ill health, his replacement can be effected by the arrangements in place in the existing pilotage agreement (that is from the pool of temporary pilots provided for in the agreement).

He will say that in January 2016 he was awaiting a letter from the Port Company fixing an appointment with the company’s doctor prior to his return to work from sick leave when he received the letter dated 29th January 2016 telling him that “As you will have reached the age of sixty five years on Tuesday, the 15th March 2016, the Company has decided to retire you on that date”.

He will give evidence of the very substantial loss which he has suffered by the loss of his salary which has only been mitigated by the payment of his pension.   This loss amounts to €138,981 calculated to the end of March 2018.

Since his retirement he has attempted to mitigate his loss by holding himself out as a marine consultant. This has not worked out so far and he is considering returning to sea. However this would require him to revalidate his certificate of competency at an estimated cost of some €17,565 and €3,090.

Background

The complainant commenced employment with the respondent in October 2004 and retired on 15th March 2016. The complainant had 11.44 years’ service with the respondent.

On 29th January 2016 the complainant was informed that his retirement would take effect on 15th March 2016.   This letter sets out his benefits as an annual pension of €8,888 in addition to a lump sum payment of €37,037.

On 4th February 2016, a solicitor on behalf of the complainant alleged in a letter to the respondent that requiring the complainant to retire was discrimination on grounds of age. There was no response to this letter by the respondent.   The complainant was still employed with the respondent at the time. The letter also states that it was the complainant’s “intention to file a claim with the Workplace Relations Commission in relation to the imposition of the Company of a mandatory retirement age …”.

On 22nd August 2016 this complaint under the Employment Equality Acts was registered with the WRC. Whilst disability is listed as a ground, it is understood that this is only relevant if this is used by the respondent to support a retirement age of 65 years. This alleged disability is not relevant in this case. The retirement age for all staff in the respondent is 65 years and this was the basis on which the complainant’s employment terminated with the respondent.

The respondent recruited a replacement for the complainant in advance of his retirement. In the collective agreement of 2006 negotiated with the respondent it is stated in paragraph 2.15 that

“When a Pilot is due to retire on a specific date, his/her replacement will be recruited in sufficient time to have completed his/her 3 months training prior to that pilot’s departure”.

The complainant signed a statement accepting the terms of that agreement and that he had read and fully understood its contents.

The Law

Under the Employment Equality Acts section 34(4) states

“…. 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”

Thus, it is not in breach of the legislation to retire an employee on reaching 65 years where the above test is satisfied. There are numerous decisions from both the Court of Justice of the European Union (CJEU) and the Labour Court upholding a retirement age of 65 years.

Retirement Age

Established Retirement Age

The complainant had no expectation that he would be permitted to remain in the employment after reaching his 65th birthday.   He never made a request to remain prior to reaching 65 years. No other member of staff has ever remained on in the employment beyond this age.   The complainant is a member of the defined benefit pension scheme and annual reports issued to him clearly state that a pension is payable on reaching 65 years of age.

The respondent’s pension scheme booklet states that normal retirement date “means your 65th birthday”.

The case Transdev Light Rail Limited v Michael Chrzanowski (EDA 1632) concerned the retirement of a Luas driver. The complainant’s contract did not have an express term stating his retirement age.   However, the Court referred to another case – Eargail Eisc Teoranta v Richard Lett (EDA 1513) stating that

“.. as a matter of general principle, a termination of employment by way of retirement should be distinguished from a dismissal on grounds of age. A retirement occurs where the employment comes to an end pursuant to a condition of employment which limits an employee’s tenure to the point at which they attain a specific age. It held that a term of employment regarding a retirement age, with the provision of Section 34 (4) of the Act, can be provided in an employee’s contract of employment either expressly or by implication”.

In the Earagail case the Labour Court also stated

“The terms of a pension scheme may also be relied upon as either implying a term as to retirement or by incorporating the terms of the scheme into the contract”.

In the Transdev case the Court referred to provision of the statement of pension contributions which specifically referred to age:

“It is clear to the Court from at least the date he joined the scheme (pension) he was aware of the existence of the retirement age: he was furnished with statements of his pension contributions on an annual basis which clearly specified the retirement age.”

Furthermore, in a report concerning the complainant’s last visit to the respondent’s Occupational Health Physician on 15th December 2015, it is stated that complainant’s own GP had advised him to consider retirement and that the complainant “is 65 in March but tells me that he could continue on working beyond 65 subject to medical fitness”.

The respondent’s medical advisor stated in writing

“I am inclined to agree with his GP that he should give some consideration to retirement at this stage and perhaps management …..

Therefore, there can be no doubt that the complainant was aware that his retirement age was 65 years.

In the CJEU case Rosenbladt v Oellerking Gebaudereigungsges (C-45/09) which involved a retirement age of 65 years the CJEU stated

“By guaranteeing workers a certain stability of employment and, in the long term, the promise of foreseeable retirement, while offering employers a certain flexibility in the management of their staff, the clause on automatic termination of employment contracts is thus the reflection of a balance between diverging but legitimate interests, against a complex background of employment relationships closely linked to political choices in the area of retirement and employment ….. It does not appear unreasonable for the social partners to take the view that a measure such (the provision containing the retirement age) may be appropriate for achieving the aims set out above”.

The CJEU went on to say in this case

“The authorisation of clauses on automatic termination of employment contracts on the ground that an employee has reached retirement age, cannot, generally, be regarded as unduly prejudicing the legitimate interests of the workers concerned. Legislation such as that at issue in the main proceedings is not based only on a specific age, but also takes account of the fact that the persons concerned are entitled to financial compensation by means of a replacement income in the form of a retirement pension at the end of their working life”.

Workforce Planning

Having a retirement age facilitates workforce planning. The respondent needs to be able to plan when Pilots are retiring in order to plan for recruitment of a replacement.

Physical & Safety Aspect of the Work

In the case Irish Ferries Limited v Martin McDermott (EDA 1631) the Labour Court again upheld a retirement age of 65 years.   This case referred to the retirement of a Docker. It was accepted that the job was ardous and physically demanding and that this becomes increasing difficult with age. The Labour Court stated that

“the setting of a maximum working age of 65 at this time ensures staff are not exposed to the embarrassment of finding themselves incapable of discharging their duties and being retired in that context rather than with dignity and respect”.

The role of a Pilot is a physically demanding one.   This is reflected in the nature of the work. The physical aspect of the work is reflected in the accident that the complainant had at work some years ago. The CJEU and the Labour Court have accepted the people’s physical capacity deteriorates as they age.

Article 6 (1)(a) of the Council Directive 2000/78/EC states that dismissal can be justified on grounds of age in certain circumstances. One of the grounds to justify dismissal on grounds of age is listed “to ensure their (i.e. workers) protection”.

The complainant’s role requires that he guide the ships into the Port. The Port operates 24 hours per day and 365 years per annum. The ships can be up to 6 kilometres out at sea when the Pilot boards the ship. Access to a ship requires the Pilot to travel in a pilot boat travelling alongside a ship at the same speed as the ship. The Pilot then jumps from the pilot boat on to a rope ladder on the side of the ship and climbs up on to the ship. There would also be further ladders to climb when on board the ship.

This is a hazardous task as it must be undertaken in all weathers and can also be in the dark. In fact, the complainant had fallen previously when trying to access a ship. However, his retirement was not impacted by any alleged disability he claims to have.   (The complainant is currently pursuing a personal injury claim against the respondent following an accident in 2011). At the time of his retirement he was absent from work and had been out of work since October 2015. The complainant had exhausted his sick pay entitlement under the terms of the respondent’s sick pay scheme but the respondent continued to pay him up to his date of retirement.

The Job Description

The job description for the role of Pilot specifically refers to the health of the job holder. A provision states that a person will not be eligible for the role of Pilot unless

“…the person produces a medical certificate from a medical practitioner approved by the Harbour Master that he is free from any disease or infirmity liable to interfere with his duties as a Pilot.”

This reflects the safety critical nature of the role.

In the CJEU case Colin Wolf v Stadt Frankfurt am Main (C-229/08) which concerned age in relation to the recruitment to the fire service in Germany it was stated that

“… it must be ascertained whether physical fitness is a characteristic related to age and whether it constitutes a genuine and determining occupational requirement for the occupational activities in question or for carrying them out” …

The role of Pilot is a physically demanding one.   This is obvious from the fact that the complainant must board ships at sea, often in adverse conditions. The physical nature of the work is reflected in the fact that the complainant had a serious accident trying to board a ship.   Following that he did have conversations with medical people about retirement and was advised by his own GP to seriously consider this option.

Adequate Income on Retirement

The complainant’s income on retirement amounted to €8,888 per annum from the respondent’s pension scheme in addition to a lump sum of €37,073. This total amount compares favourably with the level of contributory State pension scheme. The complainant will qualify for the state contributory pension in addition to his annual pension from the respondent’s pension scheme on reaching 66 years of age.   He is also entitled to benefit from the respondent’s medical and welfare scheme after retirement. The Labour Court in the Irish Ferries case did refer to the fact that an employee should not be “retired into poverty or penury at age 65 some years before they qualified for state pensions”. This issue was not deemed to be material in the Irish Ferries case and neither is it relevant in this case.

Comment on Complainant’s Submission

The complainant is alleging that there is no retirement age in his contract of employment and therefore no retirement age applies in this case.

However, the complainant is a member of the respondent’s pension scheme. He received an annual benefit statement each year. When the retirement age was 60 years of age his annual benefit statement reflected that fact. This refers to a “normal retirement age 60 on March 15th 2016 for the complainant.

Clearly the complainant was aware of his retirement age given the receipt of these annual reports.

Cases Referred to by the Complainant

In Aoife McCarthy v Health Service Executive the High Court rejected the argument that the complainant was not aware of a retirement age of 65 years even though she had never been issued with a contract of employment ie “.. in addition to the board awareness of the retirement age among most working adults, the applicant may be deemed to be “on notice” that there was an applicable retirement age by virtue of the superannuation scheme”.

In the case O’Meara v College Freight there was no pension scheme in place and there were inconsistencies in the application of a retirement on reaching 65 years. In its conclusion the EAT stated “Based on all of the evidence adduced the Tribunal is not satisfied that the company had a retirement policy or even a comprehensive custom and practice in relation to retirement. The claimant’s terms and conditions of employment were silent on the issue, no staff handbook existed and if a policy document did exist it was not put in evidence nor was it ever given to the claimant”.

In the case Patrick Reilly v Drogheda Borough Council, the claimant was not a member of a pension scheme and had never been informed about any change to his retirement age from 65 years to 55 years.

In Connaught Airport Development Limited v John Glavey the claimant was not a member of the company pension scheme and thus was not aware of the retirement age which was set out in the terms of that pension scheme. The Labour Court stated in this case that “The terms of a pension scheme may also be relied upon either as implying a term as to retirement or by incorporating the terms of the scheme into the contract”.

These last three cases are in contrast to the complainant’s situation ie he is a member of the pension scheme and thus aware of the retirement age applicable to him.

Conclusion

The retirement age of 65 years is justified in this case.

The complainant was aware at all times that the retirement age was 65 years. He never sought to challenge this at any time prior to notification of his impending retirement. Thus, it is reasonable to assume he accepted that he would retire on reaching 65 years of age.

A retirement age in an organisation assists workforce planning and prevents disputes on whether or not a person is fit to perform the work.

The role of a Marine Pilot is a physically demanding role and can be hazardous. Safety of employees is important, and the retirement age of 65 years is justified to meet this objective. The complainant’s own experience of an accident in 2011 demonstrates this fact.

The complainant has been provided with a pension and tax-free lump sum which ensures that he does have an income greater than the income from the State contributory old age pension prior to qualifying for the State pension. He will retain a Company pension of almost €9,000 per annum in addition to the contributory State pension on reaching 66 years of age.

For all of these reasons the respondent requests that the Adjudicator reject this complaint.

In recent years, the issue of mandatory retirement ages or forced retirement has come to the fore, in particular given the clear desire on the part of older employees to work post retirement age for practical or financial reasons. In addition, given the increase in the qualification age for the state pension. This qualification age for the state pension rose from 65 to 66 in 2014 and will rise to 67 in 2021 and 68 in 2028. The retirement age for civil servants has been removed for new entrants to the public service posts 1 April 2004. However, employers will also wish to impose retirement ages to allow for intergenerational fairness.

In order for employers to have an established retirement age, generally a retirement age has to be expressly provided in the written contract of employment, or else be implied or established by way of custom and practice or be contained in pension documentation. In Molloy v Connaught Gold although there was no contractual retirement age, the bulk of employees left at age 65 which established a custom and practice of a normal retirement age of 65. If employees had specialist skills, they were re-engaged on a new temporary or part time contract. No employee had remained working past age 65 in the claimant’s division and two requests to remain working had been refused. This demonstrates the onus proofs an employer has to meet in order to prove a normal retirement age is in place within the employment in the absence of written documentation.

The recent Labour Court decision of Transdev Light Rail Limited v Michael Chrzanowski concerned an employee who was retired as a Luas driver in circumstances where his contract was silent on a retirement age. In finding for the employer the Labour Court held that although there was no express term set out in the contract of employment, there was deemed to be an implied term of a mandatory retirement age as a result of an established custom and practice evidenced by; a consistent application of the mandatory retirement age since 2010, its inclusion as an express term in the Company pension scheme, its inclusion as an express term in more recent contracts of employment and the incorporation of the term in a collective agreement entered into between the union representing the employee and the employer.

In deciding Chrzanowski the Labour Court placed emphasis on the principles set out in the case of Earagail Eisc Teo v Richard Lett where it held that a term of employment regarding a retirement age can be provided in an employee’s conditions of employment, either expressly or by implication.

The Court of Justice has made it quite clear in Palacios de la Villa v Cortefiel Servicios SA that a measure which permits the compulsory retirement of workers when they reach a certain age can encourage recruitment and not unduly prejudice the rights of workers. The broad discretion afforded to member states was also accepted in this judgment. The Court of Justice examined the objective justification of the Spanish authorities in relation to the compulsory retirement in contention within the case.   Evaluating the position as to whether the national law in that case had a “legitimate aim” The Court held that “[P]laced in its context, the … provision was aimed at regulating the national labour market, in particular, for the purposes of checking unemployment”. The Court of Justice further in concluding held:

In the light of all the foregoing considerations, the answer to the first question must be that the prohibition on any discrimination on grounds of age, as implemented by Directive 2000/78, must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, pursuant to which compulsory retirement clauses contained in collective agreements are lawful where such clauses provide as sole requirements that workers must have reached retirement age, set at 65 by national law, and must have fulfilled the conditions set out in the social security legislation for entitlement to a retirement pension under their contribution regime, where the measure, although based on age, is objectively and reasonably justified in the context of national law by a legitimate aim relating to employment policy and the labour market, and it is not apparent that the means put in place to achieve that aim of public interest are inappropriate and unnecessary for the purpose.

The Court of Justice further examined the proportionality aspect of the decision and held that the decision was in fact proportionate given the pension entitlements of the applicant in this case. It is noted from paragraph 73 of the Judgment that the Court held:

Furthermore, the measure cannot be regarded as unduly prejudicing the legitimate claims of workers subject to compulsory retirement because they have reached the age-limit provided for; the relevant legislation is not based only on a specific age, but also takes account of the fact that the persons concerned are entitled to financial compensation by way of a retirement pension at the end of their working life, such as that provided for by the national legislation at issue in the main proceedings, the level of which cannot be regarded as unreasonable.

In this instant case we heard that the Respondent company did not continue to employ employees once they had reached their 65th birthday and it was therefore ‘custom and practice’ that employees retired on reaching their 65th birthday.

As per current pension legislation the Complainant would have received an annul statement of benefits from the Respondent company’s pension provider, this would clearly state that retirement age was 65. The Complainant could not be under any doubt as to the question of retirement at 65.

The question of disability does not exist in the complaint.

I have given this complaint considerable thought and now conclude that the complaint is not well founded and therefore fails.

I have given this complaint considerable thought and now conclude that the complaint is not well founded and therefore fails.

Retirement age.