€15,000 Age Discrimination Award: Why Allowing an Employee to Work Beyond Retirement Age Changes the Legal Position
A recent Labour Court decision highlights the risks employers face when retirement arrangements are handled informally or inconsistently.
A warehouse worker who was required to retire six months after his 65th birthday was awarded €15,000 after the Labour Court found that his employment had been terminated on the ground of age.
Although the employee’s contract contained a mandatory retirement age of 65, the employer had permitted him to continue working beyond that date without putting a new agreement or retirement date in place.
For employers, the decision reinforces an important principle:
A contractual retirement age cannot always be relied upon after an employee has been allowed to continue working beyond it.
Background to the case
The employee had worked for the logistics company since 2003.
His contract reportedly provided for a mandatory retirement age of 65. However, before reaching that age in December 2023, he asked whether he could continue working.
The company agreed.
No formal fixed-term contract was issued and no revised retirement date was confirmed.
Several months later, the employer informed the worker that his employment would end. The possibility of moving to a three-day week had been discussed, but the employee did not want to reduce his hours.
The company subsequently relied on the retirement clause in his original contract and informed him that his employment would cease because he had reached 65.
The employer’s position
The employer argued that:
- the employee’s contract contained a mandatory retirement age;
- employees were sometimes permitted to work beyond 65 where operationally possible;
- health-related restrictions affected the roles available to the employee;
- the loss of a commercial contract meant his existing role was no longer required;
- he did not have the necessary skills for some alternative positions.
The company maintained that it had attempted to explore whether alternative duties could be identified.
What the Labour Court found
The Labour Court overturned the earlier WRC decision and found in favour of the employee.
It concluded that, by allowing him to work beyond his 65th birthday, the employer had effectively waived its entitlement to rely on the original contractual retirement age.
The company had not:
- Placed the employee on a fixed-term contract;
- Specified a new retirement date;
- Clearly documented the basis on which he was continuing to work.
The Labour Court found that the employer ultimately relied on the employee’s age to terminate his employment after the loss of the commercial contract.
That amounted to age discrimination under the Employment Equality Acts.
The employee was awarded €15,000.
Why this decision matters for employers
Mandatory retirement ages can be lawful in Ireland, but they must be managed carefully.
Employers should not assume that the existence of a retirement clause automatically protects every retirement decision.
The difficulty in this case arose because the employee was permitted to remain in employment after the contractual retirement date without a clear new arrangement.
Once that happened, the employer’s ability to rely on the original retirement clause was significantly weakened.
Key employer lessons
1. Do not allow post-retirement employment to continue informally
Where an employee is permitted to work beyond the contractual retirement age, employers should document the arrangement before the original retirement date passes.
The agreement should clarify:
- Whether the continuation is temporary;
- Whether it is under a fixed-term contract;
- The reason for the extension;
- The revised end date;
- Whether any duties or hours will change.
An informal verbal arrangement can create uncertainty and increase discrimination risk.
2. Retirement and redundancy are separate legal issues
The evidence suggested that the loss of a client contract affected the availability of work.
If the real reason for ending employment is that a role no longer exists, the employer should consider whether the situation is properly dealt with as a redundancy rather than retirement.
Using retirement to address a business restructuring may lead to a finding that age was the true reason for dismissal.
3. Mandatory retirement ages must be consistently applied
The employee knew of colleagues who had worked beyond 65.
Where some employees are allowed to remain while others are required to retire, employers should have objective and documented reasons for the difference in treatment.
Inconsistent application can undermine the legitimacy of a retirement policy.
4. Fixed-term arrangements must be genuine and clearly recorded
Irish equality legislation permits certain post-retirement fixed-term arrangements, provided they are objectively justified.
However, the arrangement must actually be put in place.
Employers should not assume that allowing an employee to continue working automatically creates a lawful fixed-term extension.
5. Health concerns should be handled separately
The employer referred to the employee’s health and previous adjustments to his duties.
Employers should avoid combining retirement, capability and redundancy issues into one unclear process.
Where health affects the work an employee can perform, employers should separately consider:
- Medical evidence;
- Occupational health advice;
- Reasonable accommodation;
- Available alternative duties.
Practical steps for employers
Before an employee reaches the contractual retirement age, employers should:
- Review the employment contract and retirement policy;
- Confirm whether the retirement age remains objectively justified;
- Meet with the employee well in advance;
- Consider any request to remain in employment;
- Document the decision and reasons;
- Use a properly drafted fixed-term agreement where employment continues;
- Avoid relying on retirement where redundancy or capability is the real issue;
- Apply the policy consistently across the workforce.
The wider message for employers
This decision demonstrates that retirement arrangements cannot be left to assumption.
A company may have a valid contractual retirement age, but its conduct can affect whether that clause remains enforceable.
Allowing an employee to work beyond retirement age without a clear written arrangement can expose the employer to an age discrimination claim later.
A structured and documented process protects workforce planning while reducing legal risk.
How Ormonde Solicitors can help
Ormonde Solicitors advises employers on:
- Mandatory retirement policies;
- Requests to work beyond retirement age;
- Fixed-term post-retirement contracts;
- Age discrimination;
- Redundancy and restructuring;
- Reasonable accommodation;
- WRC and Labour Court representation.
Early advice can help employers distinguish between retirement, redundancy and capability issues before decisions are made.
📞 Contact us today for confidential guidance.
Disclaimer: This article is for general information purposes only and does not constitute legal advice.
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