Mandatory Retirement & ‘young people time now’

Studies have shown that, in general, an employee is most productive when he is in his 30s and 40s. Contrast that with data that shows that most employees reach their highest earning potential in their 50s and you start to see why some businesses are aiming for a younger workforce. Some businesses openly prefer to hire young people, while others implement mandatory retirement policies. As noble as it is to want to give young people a chance, employers must be careful that they don’t discriminate against old folks.

Many job listings give a minimum and a maximum age for eligibility. There was a time when you had to be female and under 35 years old to be an air hostess (as they were then called). That is no more, especially with some American airlines. Anti-discrimination laws in the United States undoubtedly had something to do with that. Since the passage of the Charter of Rights last year, it’s only a matter of time before similar changes take off in Jamaica.

Age discrimination in the workplace occurs most often when a senior citizen is denied a position that he or she is qualified to occupy, but which is offered to a younger, and arguably less qualified candidate. Older employees are easy targets because they are generally more expensive to the organisation and are perceived as being less flexible. Younger workers tend to accept lower salaries and benefits packages, tend to be less jaded and are considered more likely to deliver higher productivity for a longer period. Whenever the experience that comes with age isn’t a major factor, a more mature candidate is at a comparative disadvantage in the job market. Hence, there are jobs that are considered to be ‘young people work’ which typically don’t pay well but also don’t require those 3 words that recent graduates despise the most – post qualification experience. But what about the cases where the employee is already qualified and working in the position?

Age discrimination can also take the shape of forced retirement. Retirement ought to be something that we look forward to. In an ideal world, our statutory pensions would allow us to retire with comfort and dignity. In an ideal world, our children would support us instead of living with us in their 30s. In an ideal world, we’d all get our life savings back from Olint and Cash Plus. In the real world, however, many of us will need to work for as long as our bosses will permit. For some of us, that may not be long enough. In the real world, many businesses will want employees who, as one former prime minister phrased it, are more in sync with 21st century realities, whose vision can have a longer scope and who can bring new energy to enormous tasks. What happens, then, when the company wants a “21st century employee” to replace a 20th century one? Typically, it asks the older employee to retire and make way for the next generation.

An employer should not, however, compel a worker to retire unless there is either an agreement between them as to the retirement age or the appropriate retirement age may be inferred from the circumstances of the case. If there is an agreement or common understanding, it would be wise to put it in writing, in either the employment contract or the company’s policies. If not in writing, then either the employer or the employee may rely on established practice within the organisation to support the existence (or non-existence) of a normal retirement age. And if there is no contract, understanding or practice, then one could look to the industry norms to fill the gap. It is a mistake to believe that the normal retirement age as expressed in the National Insurance Act is automatically implied as the retirement age in every contract of employment. More significant, however, is the retirement age that is expressed in the Trust Deed and Rules of the company’s pension fund. This is especially so if participation in the pension fund is a term of the employment contract.

The normal retirement age for certain professions can also be influenced by industry regulations. If, for example, the Civil Aviation Authority will not license a pilot who has passed 60 years of age, it’s reasonable to infer that that’s the maximum retirement age for both male and female pilots at Air Jamaica. But the executive in Air Jamaica’s offices who is not subject to Civil Aviation regulations would be in a different position and may be able to retire at 65. This type of uncertainty is undesirable to employers and employees alike. All companies should therefore ensure that they specify the retirement age(s) in their contracts or in their policy documents.

If there is no agreed mandatory retirement age, an employer may expose itself to claims for wrongful dismissal and/or unjustifiable dismissal if it tries to force the employee to retire. In wrongful dismissal cases, the issue that the Court will have to determine is whether the employee was entitled to have received notice. It’s natural for employers to scoff at the suggestion that they should give notice of retirement. Some would say that the only notice a retiring employee would need is his or her own birth certificate. But the reason that notice may be required is that, in the absence of a policy on mandatory retirement, the employee may be blissfully unaware that he or she is expected to retire at a particular age. In other words, retirement parties make terrible surprise parties.

In unjustifiable dismissal cases, the Industrial Disputes Tribunal (IDT) may, in addition to examining normal retirement ages within the industry, also consider the ability and competence of the particular employee to perform the job in question. In that respect, the IDT may find that a company was justified in retiring a 65 year old labourer who was shown to have difficulty with the physical demands of the job, but not justified in retiring the 70 year old telephone operator whose mind was as sharp as ever. This underscores the need for employers to do frequent performance appraisals for all staff members, including those ‘rock of ages’ employees who believe they own the place. Without a record of the declining abilities, whether physical or otherwise, the task of justifying a forced retirement may be unnecessarily challenging.

Some say age is just a number, but so too is the much larger number of young people looking to replace each of us.

This article is for general information purposes only and does not constitute legal advice.

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