Employees and retirement

The first thing to say is that there is no single retirement age in Ireland, although 65 is generally the age most people retire at.

In some jobs, there is a statutory retirement age.

This means that the retirement is set out in law.

There is a statutory retirement age for civil servants, like Judges for example.

Some contracts of employment have a mandatory retirement age (i.e. the age at which employees must retire).

However, a word of caution here.

Though your employment contracts may state a mandatory age you may still have to objectively justify this age if an employee wishes to work beyond this age.

If you have employees that are around retirement age, you may want to know if and when you’ll need to be prepared for any changes to your workforce.

However, there are strict rules around what is and isn’t acceptable when discussing an employee’s retirement plans.

Talking to employees about retirement

During your appraisals, it’s perfectly ok to ask your employees (regardless of age) what their future plans are.

This will give you a good insight into your employees’ career intentions and level of satisfaction with their current role within your business; it might also reveal whether any employees are planning on leaving for any number of reasons, including retirement.

What’s not acceptable, however, is asking an employee outright when they are going to retire, as this can be seen as pressurising behaviour, which may lead to discrimination claims being made against you.

When compulsory retirement is allowed

While employees are generally free to retire at any age they decide to, a compulsory retirement age can be imposed within a business, if the employer has strong evidence that it’s justified.

The reasoning must be based on an objective criterion that’s in the public interest, rather than to only benefit the employer and their business.

The employer must be able to show

1. how compulsory retirement is essential for the business to meet this justifiable objective, and

2. that there isn’t any other way they can do so.

Any employees that are dismissed based on compulsory retirement are entitled to benefit from your dismissal procedure, including a notice period, and the right to appeal.

If an employee decides to retire…

You may first hear of an employee’s decision to retire during an appraisal meeting or perhaps a less-formal conversation.

But, until formal notice has been given to you in writing, detailing the date they intend to leave, the employee is entitled to change their mind.

When an employee retires (voluntarily or compulsorily), calculate their final payment and any entitlements from employee share schemes, and ensure you know and follow the rules of their pension scheme.

You’ll also need to collect any business-owned items from them and reset/disable their passwords when they leave, just as you would do for any other employee who’s leaving the business.