‘Retirement can be a controversial topic’
Retirement has become an increasingly complex issue and the question of whether an employer should be able to impose a mandatory retirement age is a controversial topic.
In December 2015, a report on the ‘Employment Equality (Abolition of Mandatory Retirement Ages) Bill 2014’ concluded that a mandatory retirement age was an outdated concept. The default retirement age (65) is being phased out and people want to work as long as they like.
A surprisingly large number of employers do not have a clearly defined policy on retirement but rely on the States Pension age to determine the retirement age. The potential impact on public finances has led to recent changes in the State Pension age – the current retirement age is 66 rising to 67 by 2021 and 68 by 2028.
The controversy will intensify as an increasing number of people expect to have to work beyond the normal retirement age. Up to now the majority of employees have accepted 65 as the norm but there is evidence that this assumption is being challenged. Employment Tribunals have established that compulsory retirement ages and ‘fixed term contracts based on age’ may in some cases be considered to be ‘age discrimination’.
‘8 out of 10 businesses expect to award pay increases in 2016’
Employers will face sustained pressure for increases in pay in 2016, as it looks like you may be facing the perfect storm – economic growth forecast 6 – 7%; unemployment is falling creating increased competition for staff; and politicians are making election promises.
The low Pay Commission has recommended that the National Minimum Wage be increased from €8.65 to €9.15 effective the 1st January 2016.
ICTU have been promoting the concept of the Living Wage (€11.50 per hour) and some private sector businesses – IKEA, Lidl and Aldi – have declared support for the concept.
Private sector pay deals
Pay increases in the private sector will be determined by local wage negotiation, with high performing export sectors (pharmaceutical & electronics) agreeing deals of 2 to 5%. At the other end of the spectrum many expect deals below 2.0% and some companies that are still in difficulties trying to maintained pay freezes that have been in place since the economic crisis began in 2008.
Trade Union position
TU leaders have proposed that pay increases should be between 2.5% to 5.0% for 2016. This is to be expected but the evidence suggests that there will only be a small number of deals at the high end.
The Trade Union – SIPTU – recorded 170 wage agreements in the past 18 months with an average annual increase of 2.0%.
However, there was a wide variation in the terms and duration of the agreements;
- Agri-food sector 1.76% per year / (3.59% over 25 months
- Electronics and engineering 2.07% per year / (3.44% over 20 months)
The duration of the agreements varied widely with the longest reported deal of 6.0% over 48 months in the Agri-food sector.
I am an accredited mediator with extensive experience of negotiating pay deals for private sector firms in unionised and non-unionised environments.
Contact me if you are under pressure to do a pay deal in 2016!