6th March 2024
Minister for Enterprise, Trade and Employment, Simon Coveney TD has announced that Government has approved the drafting of the Employment (Restriction of Certain Mandatory Retirement Ages) Bill 2024.
- The Bill will implement a key commitment included in the government’s response to the Pensions Commission Recommendations and Implementation Plan.
- It will deliver a statutory provision which will allow, but not compel, an employee to stay in employment until the State Pension age, which is age 66.
- The Bill provides that in general an employer cannot set a compulsory retirement age below the State Pension age if the employee does not consent to retire. This element of consent reflects the fact that many employees may want to retire at the contractual retirement age.
- It also provides for certain exemptions, particularly in relation to retirement ages which are set out in law, or in limited circumstances where the employer can provide objective justification for the retirement age.
Following Tuesday’s Cabinet meeting, Minister Coveney said:
“I am very pleased that government has agreed to the drafting of this important legislation. We know that people are living longer and healthier lives which is hugely positive. The series of landmark reforms the government committed to in response to the Pensions Commission report, which are being led by my colleague Minister Heather Humphreys, will ensure the pensions system is sustainable in the face of demographic change and that people relying on the State Pension have adequate and predictable income in retirement.
“In addition to these reforms, the introduction of this legislation is a crucial step in improving adequacy of income for older workers and effectively creates a new employment right.
“This Bill will reaffirm our long-standing policy to encourage and support longer and fuller working lives, where older people are facilitated in continuing in employment, if they wish to, until the age at which they can first access the State Pension.”
Notes to Editors:
The Pensions Commission was established in November 2020 to examine the sustainability of the State Pension system and the Social Insurance Fund. The Commission’s Report was published on 7 October 2021. It is a comprehensive and authoritative report based on various analyses of population, labour force and expenditure projections; an examination of international approaches; and responses to an extensive consultation process.
In September 2022, in response to the Pensions Commission Recommendations and Implementation Plan, the Government committed to a range of pension reforms which will ensure the pensions system is sustainable in the face of demographic change and that people relying on the State Pension have adequate and predictable income in retirement. The majority of the commitments relate to significant reform of the State Pension System and are being led by the Department of Social Protection.
One key commitment relates the introduction of measures that allow, but do not compel, an employee to stay in employment until the State Pension Age.
Currently there is no general retirement age for employees in Irish legislation. In certain public sector employments, statutory retirement ages may apply. Under equality legislation, an employer is currently permitted to set a retirement age, but only in circumstances where it can be objectively and reasonably justified by a legitimate aim, and the means of achieving that aim are appropriate and necessary.
The Employment (Restriction of Certain Mandatory Retirement Ages) Bill 2024 will deliver a statutory provision which will preclude enforceability of contractual mandatory retirement ages before the age at which an employee may first become entitled to the State Pension, subject to certain exemptions. The legislation will apply to existing and new contracts.
The main provisions of the Bill will provide that:
- A clause in a contract of employment which sets a mandatory retirement age which is below the age at which a person can first access the State Pension will not be enforceable without the consent of the employee.
- Certain exemptions are included, particularly in relation to retirement ages which are set out in law and apply to some public servants, or in relation to contractual retirement ages for physically demanding or public-safety critical professions - but only in situations where the employer can objectively justify the retirement age.
- In line with other employment rights legislation, employees will have the right to redress if their employer imposes a mandatory retirement age which is lower than the State Pension Age without their consent.
- There is no impact on employment equality legislation which will continue to operate as normal.
ENDS
Back to Department News