Complainant

Respondent

Parties

Denis O'Keeffe

Pat O'Donnell & Co

Representatives

Colleen Minihane SIPTU

Leman Solicitors Owen Keany BL

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-00034542-001

10/02/2020

The Complainant asserts that he was discriminated against on age grounds when his employment was terminated upon reaching the age of 65. The Complainant submits that he commenced employment as a Construction Plant Fitter (later called Service Engineer) on the 1st September 1989. The employment was terminated by the Respondent on the 21st January 2020 when he had reached the age of 65. The Complainant asserts that his gross pay was €1140.96 for a 48-hour week. The Respondent denies the Complainants claim of discrimination on age grounds.

Preliminary Application by the Respondent:

The Respondent submits that the Complainant’s initial submission to the Workplace Relations Commission (WRC) has provided no detail of the basis upon which the Respondent’s actions, in refusing to grant him a fixed term contract, amounted to discrimination. The Respondent submits that the sole wording upon which the Complainant’s representative was basing the case was as follows: “Our member sought a fixed term contract for 12 months as an objectively justified legitimate aim to bridge the pay gap until he can obtain his state pension at age 66. The employer refused this reasonable request.” The Respondent submits that no such discriminatory ground can be extracted from such a wording. The Respondent further submits that the Complainant’s representative did not abide by the terms of WRC’s guideline document “Procedures in the Investigation and Adjudication of Employment Equality Complaints” regarding timely submission of the details of the claim. The Respondent further submits that when the Complainant’s representative eventually forwarded the submission on the Friday before the hearing on the following Monday, the claim had fundamentally changed to one of direct attack on the established retirement age of the Respondent company.

The Respondent submits the onus rests squarely on the Complainant, in cases such as, this to provide “a clear statement setting out the details of the complaint”. In addition, the onus rests on the Complainant to identify relevant comparators in support of his claim. The Respondent submits that the Complainant has failed to adhere to this requirement and as such he has failed to meet the burden placed on him. The Respondent submits that the Complainant’s claim must be dismissed based on the above arguments.

The Complainant’s representative rejects the argument that she had not filled out the form properly and contends that she had abided by all the legal norms in the submission of the claim.

The Complainant submits that he commenced employment with the Respondent company  on 1st September 1989 as a Service Engineer and had an excellent record with the company. He submits that he never took a sick day in his 31 years with the Respondent and considered himself fit and active, with full capacity to carry out his duties beyond his 65th birthday. The Complainant’ contract expired on 21st January 2020, the date of his 65th birthday.

The Complainant submits that the custom and practice with the Respondent is to allow all categories of workers to work beyond the age of 65, if they so wished. He relied particularly on a comparator “X”, who, he submits was employed, to carry out similar work to himself for a number of years after his 65th birthday, until approximately September 2018.

The Complainant submits that he wrote to the respondent in July 2019 seeking to work beyond his 65th birthday. The HR manager, Ms A, responded on 16th July 2019 denying the request and relying on a policy stating a mandatory retirement age. The Complainant submits that there is no such company policy and furthermore an attempt by the company to bring in a handbook, with, amongst other things a fixed retirement age, was rejected by the trade union.

The Complainant submits that the Union made representations on behalf of the Complainant on 19th December 2019 reiterating the complainant’s wish to work beyond his 65th birthday and at least until he reached the qualifying age for the state pension at 66, also quoting the Equality Acts and the fixed term contract option.

The Complainant submits that the Respondent first mentioned succession planning in January 2020 but there was no qualified engineer to step into the Complainant’s shoes; the Respondent instead had to recruit from outside the company.

Legal Argument:

The Complainants’ case is that the decision to terminate his employment because he reached the age of 65 discriminates against him on the ground of age. The Complainant submits that this decision is contrary to the provisions of Section 6(1)(a) of the Employment Equality Acts 1998-2015 which, when read in conjunction with Section 6(2)(f), provides that discrimination occurs when a person is treated ‘less favourably than another person is, has been or would be treated’ because of their age.

The Complainant submits that in Neilon v Longford County Council (UD/19/36) the complainant contended that at no stage of his employment was there an express or implied term in a contract nor was there a custom and practice in the workplace to the effect that he was bound to retire at 65.

The Complainant submits that in the case of Dr Paul Quigley and the HSE [2018] 29 E.L.R. an injunction on termination of employment at age 65 was granted as the contract of employment did not state a retirement age.

The claimant’s case is that he has never received a contract of employment, stating a mandatory retirement age. On this basis, there is no age of retirement which is legally binding and/or enforceable upon him.

Section 34(4) of the Equality Acts permits different treatment based on age if it is ‘objectively and reasonably justified by a legitimate aim’ and ‘the means of achieving that aim are appropriate and necessary. The Complainant submits that as position was advertised nationally, rather than filled by an apprentice, the company’s position of succession planning and hence the necessity for him to retire at 65 is not legitimate, or justifiable.

In addition, the Complainant submits that section 6(3) of the Equality Acts permits an employer to offer an employee a fixed term contract, so long as it can be objectively justified by a legitimate aim. The Complainant submits that the legitimate aim in his case would be to allow him work for one year to allow him to reach the social welfare pension age of 66. The issuing of the fixed term contract would be appropriate and necessary as there was no one qualified to take up the service engineer role at the time of the claimant’s retirement and he had a perfect record with the company and customers.

The Complainant submits that the Respondent did not refer to SI 600/2017, the Code of Practice on Longer Working which provides guidance to employers and employees.   It, likewise, states an employer must provide an objective justification for the claimant’s retirement at 65. The Complainant submits his proposal to stay for a further year to bridge the income gap could not be described as disproportionate or beyond what is necessary.

The Complainant submits that the Respondent has not been consistent in its application of the so called ‘requirement to retire at age 65’ with both administrative staff and service engineers staying beyond this age.

In conclusion the Complainant submits that the Respondent is in breach of the Employment Equality Acts by failing to show that compelling the Complainant to retire at 65 corresponds to a real need and legitimate objective and failing to demonstrate that compelling him to retire was appropriate and necessary means to achieve that objective.

The Respondent submits that it is a family owned and operated business. It is Ireland’s largest supplier of plant machinery and equipment. The Respondent currently employs in the region of 94 employees, including approximately 30 Service Engineers and 6 Apprentice Service Engineers, who are responsible for providing specialised after-sales service to clients of the Respondent throughout Ireland.

The Respondent submits that the Complainant’s annual salary was €45,689.28 gross, amounting to a gross weekly wage of €878.64 which conflicts with the Complainant’s figures.

As a Service Engineer, The Respondent submits that the Complainant’s duties included the servicing and overhaul of complex heavy construction equipment. This required the Complainant to be physically fit in order to complete the above responsibilities in line with the Respondent’s health and safety practices.

The Respondent submits that it has always been the practice that Service Engineers are required to retire at the age of 65. Whilst this is not expressly provided for in the Complainant’s written contract of employment, it has been a universally applied and accepted custom and practice within the Respondent throughout the period of the Complainant’s employment. The Respondent further submits this practice is reflected in the Respondent’s Handbook, including its Retirement and Death Benefits Plan, initially compiled in 2004 and further updated versions of which were circulated to all staff of the Respondent in 2006, 2016 and 2020. The Respondent submits that in each version of the Employee Handbook, the Respondent’s Retirement and Death Benefit Plan specifically provides that the normal pension date for participating employees is the date of their 65th birthday. The Respondent submits that whilst the Complainant’s union made representations in respect of certain changes which were implemented to the Employee Handbook in 2016, at no stage was any objection or concern expressed the Complainant’s Union in respect of this provision.

The Respondent submits that the Complainant understood it was company policy to have a fixed retirement age at 65 as he had engaged with the pension planner and sought to enhance his pension with Additional Voluntary Contributions (AVCs). Furthermore, The Complainant wrote to the HR manager on 1 July 2019 stating the following:

“I wish to extend my employment with Pat O’Donnell & Co past my 65th birthday up to the time at which I will qualify for my statutory old age pension. I trust this is acceptable to the Company.”

The Respondent submits that the above note makes clear that the Complainant was fully aware of the Respondent’s retirement policy. The Respondent considered the Complainant’s request but ultimately determined that it would not be appropriate to deviate from the policy which has applied in respect of all Service Engineers.

LEGAL ARGUMENT:

The Respondent submits that It would appear from the Complainant’s WRC complaint form that his claim is premised upon the mistaken assumption that the Respondent was under a legal obligation to provide the Complainant with a fixed term contract at the time of his retirement. The Complainant asserts that his request for such a fixed term contract is supported by an “objectively justified legitimate aim”. It is respectfully submitted that the Complainant’s position is misconceived and without legal foundation. The Respondent submits whilst the Acts specifically provide at section 6(3)(2) for the possibility of an employee being granted a fixed-term contract after their compulsory retirement, it is not the case that the Respondent is under any legal obligation to do so.

The Respondent exhibits a table outlining the employment commencement and departure dates of other Service Engineers whose records are retained by the Respondent. The Respondent submits that each Service Engineer who reached the age of 65 whilst in the Respondent’s employment, has ceased employment as a Service Engineer on that date.

The Respondent submits that the person relied upon by the Complainant as his comparator retired as a Service Engineer in 2017 and was engaged by the Respondent on an ad hoc basis as an independent contractor to provide holiday cover for the Branch Manager and Parts Administrator in the branch where the Complainant worked. The Respondent asserts that prior to his retirement he had not carried out the duties of Service Engineer for 10 years, rather he had worked in an administrative capacity.

The Respondent submits that a long-established custom and practice existed within the Respondent company concerning the mandatory retirement of Service Engineers at the age of 65. The Respondent submits the Complainant was always aware of the fact. In support of its position, the Respondent relies on the decision of the WRC in A Traffic Warden v A Local Authority ADJ-00009096 in which a dispute arose in relation to the existence of a mandatory retirement age in the employee’s employment. In that case the employee alleged that the employer had introduced a mandatory retirement age where no such provision was set out in the employee’s contract of employment. In finding that the employer’s policy in respect of retirement age had been implied into the employee’s contract, the Adjudication Officer placed specific reliance on the fact that documentation in relation to the employee’s pension (which had been presented to the employee at a Superannuation Information Talk) referred to the retirement age in operation within the employer.

The Respondent also relies upon Earagail Eisc Teoranta v Richard Lett EDA1513 where it submits that the Labour Court held 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 specified age. The Respondent submits the Court  held that a term of employment regarding a retirement age, within the provision of Section 34 (4) of the Act, can be provided in an employee’s conditions of employment either expressly or by implication.

The Respondent further submits that the existence of a mandatory retirement age of the kind in place within the Respondent company is and was always objectively justified by a legitimate aim and the means of achieving that aim are both appropriate and necessary.

The Respondent submits that it has objective justification for having a fixed retirement age when it comes to succession planning and enabling younger service engineers to come through the ranks. The Respondent submits that it has had to invest very significantly in the education and training of existing employees and apprentices to ensure a consistent flow of new Service Engineers for the future.

The Respondent submits, in addition, that the role of Service Engineer is in many respects a physically demanding one. The Respondent submits that this manual nature of the role also amounts to a legitimate consideration which supports the rationale for a mandatory retirement age of the kind in place within the Respondent company. The Respondent relies upon the case of Paul Doyle v ESB International Limited DEC-E2012-086 wherethe employee was deemed by the Equality Tribunal to have been bound by a retirement age which, despite not being stipulated on his contract of employment, was an established practice within the company. The company put forward two arguments by way of objective justifications for the mandatory retirement age in question. The company’s main argument was that fixing a retirement age of 65 was necessary to provide promotional opportunities and career pathways and thus retain younger employees. The company was able to show that it allocated extensive resources to training its staff. The Tribunal accepted that the notion of “sharing employment between generations” has been found to be objectively justifiable by the European Court of Justice. On this basis, Mr Doyle’s claim failed. In addition, the Company argued that work involving electricity is of such a nature that legitimate health and safety concerns in respect of older staff may arise. It was submitted that increasing the retirement age would necessitate physical examinations that might cause embarrassment and humiliation to employees.

The Respondent also relies on the case of Irish Ferries v McDermott EDA 1631 where the Labour Court held that the company had established good grounds that objectively justify the selection of a retirement age of 65 years of age in respect of an employee employed as a docker within the company. In reaching this conclusion, the Labour Court placed reliance on the physical nature of the work of a docker which became increasingly difficult with age.

The Respondent called two witnesses, the HR manager and a company director. Both gave further detail on the nature of the work carried out by the Complainant as well as to why the fixing of a retirement age by the Respondent was objectively justified.

The Respondent submits that having regard to all the above, the retirement age in place within the Respondent company is objectively justified by a legitimate aim and the means of achieving that aim are both appropriate and necessary.

Preliminary Issue:

The Respondent submitted that the Complainant’s WRC complaint form provided no details of the basis upon which the Respondent’s actions amounted to discrimination and therefore the Respondent was at a disadvantage in defending a claim of discrimination. The Respondent further   submitted that the Complainant’s representative did not abide with the terms of the WRC’s guideline document “Procedures in the Investigation and Adjudication of Employment Equality Complaints” regarding timely submission of the details of the claim.

In assessing the preliminary issue, I am minded by two overarching fundamental points (1) The WRC Complaint form is not a statutory complaint form and (2) the WRC “Procedures in the Investigation and Adjudication of Employment Equality Complaints” does not yet enjoy legal endorsement by Statutory Instrument. I have also considered the later evidence submitted at the hearing which shows that there was detailed correspondence between the Complainant’s union and the Respondent prior to the submission of the complaint, where the details of the alleged discriminatory action were adequately identified. Furthermore, the Respondent’s detailed verbal and documentary evidence on the day pointed to a clear understanding of the complaint made against the Respondent, including reference to a purported comparator. Therefore, I do not accept the preliminary objection of the Respondent and I accept full jurisdiction to investigate the complaint.

The law applicable:

The Employment Equality Acts 1998 and 2008 transposed Directive 2000/78, which, via Article 2(2), prohibits discrimination on four grounds (including age). The Directive, however, permits direct discrimination on the age ground, where justified. Addressing the justification of differences of treatment on grounds of age, article 6(1) provides “Notwithstanding Article 2(2), 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.”

Section 6 of the Employment Equality Acts 1998-2015 (The Act) provides that discrimination shall be taken to occur where a person is treated less favourably than another person on one of the discriminatory grounds which ‘exists, existed but no longer exists, may exist in the future, or is imputed to the person concerned.’ Section 6(2) sets out the age discriminatory ground as ‘between any 2 persons … that they are of different ages, but subject to subsection (3) (in this Act referred to as “the age ground”)’.

Section 34 of the Act provides for savings and exceptions. The provisions relevant to age discrimination are contained in subsections (4) and (5). Section 34(4) addresses retirement age:

“(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.”

Existence, or otherwise, of a contractual retirement age:

Section 34(4) of the Act, prima facie, allowed the respondent to fix a retirement age without contravening the prohibition of discrimination on grounds of age.

In Earagail Eisc Teoranta v Richard Lett EDA1513, which was opened at the hearing, the Labour Court held 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 specified age. It held that a term of employment regarding a retirement age, within the provision of s.34(4) of the Act, can be provided in an employee's conditions of employment either expressly or by implication, or it can be provided by incorporation where some other document or instrument”… of which the employee had notice, can be read in conjunction with the formal contract of employment. The court further accepted that an employer's employment policy in relation to retirement can take effect as a contractual condition of employment which is prima facie protected by s.34(4) of the Act. However, in the Court's view that could only arise where the policy is promulgated in such a manner that the employees to whom it applies either knew, or ought to have known, of its existence.

The Court further elaborated on a situation where a complainant might have knowledge of an  implied term that stipulated a fixed retirement age: “It seems to the court that this custom and practice test can appropriately be applied in considering if the policy of an employer took effect as a contractual term or a condition of employment. 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. A crucial consideration in addressing the question of incorporation or implication is whether the employee knew, or ought to have known, of the term contended for.”

The evidence is clear, in this instant case, that there was no reference to a fixed retirement age in the Complainant’s contract of employment. The Complainant gave evidence that he had no knowledge of a fixed retirement age nor did he proclaim any knowledge of a custom and practice within the Respondent company of retiring Service Engineers at the age of 65 years. He asserted further that he had no knowledge of a requirement within the pension scheme of there being a fixed retirement at age of 65.

In uncontested evidence, a copy of the wording of a note sent to the Respondent HR manager was exhibited. This note was sent by the Complainant on 1 July 2019, eleven months before the Complainant’s 65th birthday and read: “I wish to extend (my emphasis) my employment with Pat O’Donnell & Co past my 65th birthday up to the time at which I will qualify for my statutory old age pension. I trust this is acceptable to the company.” It is clear to me from this wording that the Complainant had knowledge of the contended term of retirement, despite his evidence to the contrary at the hearing. Any reasonable reading of the request to ‘extend’ employment points to a clear acknowledgement by the Complainant that there was an expectation that the contract came to an end at age 65.

The Complainant further submitted that it was not established custom and practice for outdoor Service Engineers to retire at age 65. He cited the case of ‘X’ as comparator whom he said was a colleague Service Engineer who worked for the Respondent for a number of years after his 65th birthday. The Respondent submitted that ‘X’ had not worked as a Service engineer for approximately 10 years prior to his retirement at age 65 years but had worked instead in an administrative role. Furthermore, the Respondent exhibited documentation to show that ‘X’ had returned as a contractor, not as an employee, and that this contractual role remained administrative in nature. The Respondent submitted further documentation to show that all the relevant previous Service Engineers had retired either before, or upon, reaching the age of 65

The Complainant opened Neilon v Longford County Council (UD/19/36) and Dr Paul Quigley and the HSE [2018] 29 E.L.R. in support of his claim. Both cases can be distinguished on the facts from this instant case, on how custom and practice is implied into the employment contract. Clear evidence was adduced in both cases to show that the custom and practice at the respondent employments showed that the relevant comparable employees worked beyond the contended fixed retirement age. However, in this instant case convincing evidence was presented to show otherwise i.e. without exception, Service Engineers retired upon reaching the age of 65.

The Complainant submitted that he had no sight of a retirement age in pension documentation nor in employee handbooks which, the Respondent contends, clearly pointed to a retirement age. The Respondent submitted that  copies were distributed to employees in 2004, 2006 and 2016. The Complainant contends that the 2016 and 2020 handbooks were handed back to the Respondent by employees on the basis that terms within were not agreed with the trade union. The Respondent accepted in evidence that there was no agreement with the trade union but that the items at issue concerned terms and conditions of employment other than the retirement age which, the Respondent contends, never became an issue for dispute. The Respondent gave further evidence that there had been engagement between the Complainant and the Respondent’s chief financial controller for purchasing AVCs in anticipation of retirement and that there had been discussion on retirement planning. I prefer the Respondent’s evidence on this point and I conclude that Complainant should have known and become aware of a retirement age when purchasing AVCs. Furthermore, I was not convinced by the Complainant’s evidence that he could not make out a retirement age from the documentation available to him.

In conclusion on the issue of incorporation of a retirement age into the contract, I note that there was no retirement age in the Complainant’s contract when he first signed it. However, I am satisfied that having considered the full facts of this case that the Respondent had a contractual retirement age in respect of the Complainant and that the Complainant knew, or ought to have known, of its existence. I was not convinced by the Complainant’s argument and evidence that he had a valid expectation of working beyond age 65. Therefore, I find that the Respondent can avail of Section 34(4) of the Act.

Objective Justification for a fixed retirement age:

The Respondent opened Paul Doyle v ESB International Limited DEC-E2012-086. In that case the Equality Officer stated that she was “satisfied that the respondent had carefully considered the reasons as to why the retirement age is capped at 65 and that there is a clear employment policy supporting such a cap.” On the facts before her, the Equality Officer was prepared to accept that the respondent had objective reasons for the retirement age of 65 which, amongst other things included the need to establish an age structure among its younger and older employees and that this notion of “sharing employment between generations” has been found to be objectively justifiable by the European Court of Justice.

The Respondent in this instant case relied significantly on evidence that showed significant investment in the education and training of existing employees and apprentices to plan for the succession of Service Engineers within the business. The Complainant contended that when he retired there was an external recruitment process because there was no younger qualified Service Engineer in situ to fill his vacancy. The Respondent asserted that this was due to an exceptional circumstance where the person earmarked for the position had left the Respondent company. It is clear that the planned succession did not take place in this instance. I conclude that the fact that the employee who had been selected to take up the local position of the Complainant was not available does not, in itself, negate, the legitimacy of a national company policy.

The Respondent also submitted that the role of Service Engineer is a physically demanding one and submitted detailed oral and documentary evidence on the physicality as well as the potential health and safety hazards in support of its argument for fixing a retirement age. In Irish Ferries v McDermott EDA1631 Mr McDermott, a docker who had challenged the imposition of a retirement age of 65, argued, amongst other things that he was in good health and capable of discharging his duties. The Labour Court, when considering this point, found that the arduous work of a docker becomes increasingly difficult with age. It further stated that: “The setting of a maximum working age of 65 at this time ensures that 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 Complainant in this instant case asserted that he was in the best of health and was more than able to continue to carry out his duties, but I conclude that the position of Service Engineer for heavy construction equipment to be physically demanding and that capacity for such work diminishes with age.

Conclusion:

I find that there is no merit in the Complainant’s argument that he had an expectation of working beyond age 65. I believe that the Complainant knew or ought to have known of the existence of the retirement age. I conclude he had misinterpreted the circumstances surrounding the retirement of his comparator and other colleague Service Engineers who had retired before him.

I find accordingly that the Respondent acted in compliance with Section 34(4) of the Act in that the compulsory retirement age of 65 as applied to the Complainant was necessary, reasonable and proportionate and accordingly amounted to objective justification for that maximum retirement age. I therefore find that the Complainant was not discriminated against because of his age.

I find that the Respondent acted in compliance with Section 34(4) of the Employment Equality Acts 1998-2015 in that the compulsory retirement age of 65 as applied to the Complainant was necessary, reasonable and proportionate and accordingly amounted to objective justification for that maximum retirement age. I therefore find that the Complainant was not discriminated against because of his age.

Employment Equality Act, Retirement Age,