In December 2017, a Code of Practice on Longer Working (S.I 600 of 2017) was published. This was developed in response to the rising number of older workers and to facilitate those workers who would like to continue working beyond what is considered the traditional retirement age of 65. Currently the statutory retirement age is 66. This will rise to 67 in 2021 and 68 in 2028 and many workers will want to continue their employment for a variety of reasons, one of which may be that they cannot afford to retire until they are eligible for the state pension.
Employers need to be mindful that they cannot discriminate on the grounds of age so informing an employee that they are being retired solely on their age could be seen as age discrimination. However, employers do need to balance the needs of the business, the safety of the work environment and their succession planning so how do they strike a balance?
The Code of Practice on Longer Working was developed as a best practise tool to address these issues using the following:
• Using the skills and experience of older workers
• Objective justification of retirement
• Standard retirement arrangements
• Requests to work longer
Using the skills and experience of older workers
The code encourages employers to develop age friendly work policies and create a culture that embraces employees of all ages. To help achieve this the code suggests that employers and/or management should avail of training on diversity in the workplace that includes age, exploring flexible working patterns, proof policies and procedures for age bias and create a work culture that appreciates the continuing need for relevant training and development for all age groups.
This section reminds businesses that there is no statutory retirement age in the private sector, that the retirement age within the private sector is set via one of the following:
- An express term in the employee’s contract of employment;
- An implied term in the employee’s contract of employment;
- Relevant policies, for example a staff handbook; and
- Custom and practice generally arising from the pension date set out in the relevant occupational pension scheme
Under the Employment Equality Acts it is prohibited to discriminate on nine grounds which includes age. The Equality (Miscellaneous Provisions Act) 2015 which came into effect on 1 January 2016, made a number of amendments to the Equality Act. This means that compulsory retirement ages set by employers must be capable of objective justification both by the existence of a legitimate aim and evidence that the means of achieving that aim is both appropriate and necessary.
The code sets out examples of a legitimate aim which includes:
• Intergenerational fairness (allowing younger workers to progress)
• Motivation and dynamism through the increased prospect of promotion
• Health and safety (generally in more safety critical occupations)
• Creation of a balanced age structure in the workforce
• Personal and professional dignity (avoiding capability issues with older employees)
• Succession planning.
What is essential in using one or more of the above legitimate aims is that the business can show documentary evidence that it uses and avails of one or more of the above legitimate aims for retiring its employees.
Standard retirement arrangements
This section of the code gives best practice recommendations on workplace planning for longer working. It is fine and appropriate for employers to prepare for retirement including asking if they would like to retire especially if there is no contractual retirement date in place. The code lists the types of supports and guidance that employers can offer to their employees in preparation for retirement such as the introduction of flexible working arrangements or pre-retirement courses. The aim of these steps is to help older employees make the transition into retirement.
The code concludes by giving guidance to employers on how they can best manage the retirement process with their employees and manage employee requests to work longer in the workplace beyond their contracted retirement age. It does this through a series of questions for the employee and employer as well as setting out a best practice procedure for these requests.
In the coming weeks SFA will provide a sample longer worker procedure document for its members to use as a template but in the meantime you can download the Code of Practice for Longer Working here.
If you would like more information on longer working practices or equality in general, please contact Helen at SFA on 01 605 1668 or at email@example.com or visit our HR and Employment Law advice section on www.sfa.ie/advice