Bridging the Retirement Gap: Employment (Contractual Retirement Ages) Act 2025

Introduction

The Employment (Contractual Retirement Ages) Act 2025 (the “2025 Act”), which comes into force on 29 June 2026, represents a significant shift in Irish Employment law.

It limits employers’ ability to enforce retirement ages below the State pensionable age (currently 66) and strengthens employees’ rights to remain in work.

A Shift Towards Longer Working Lives

Traditionally, employers were permitted to enforce a contractual retirement age even where it fell below the State pensionable age. The 2025 Act seeks to bridge this gap by allowing employees to elect to continue working until pensionable age, subject to a formal process.

Employers may still impose a contractual retirement age, but only where it is “objectively and reasonably justified” by a legitimate aim, and the approach taken is “proportionate and necessary”.

Scope and Application

The Act applies where:

• An employee’s contract includes a retirement age below the pensionable age, and

• The employee has completed their probationary period

Importantly, the legislation does not extend to roles where a maximum retirement age is set by law, such as members of An Garda Síochána or the Defence Forces.

Notification Process

Central to the operation of the Act is a formal notification process that enables employees to elect their intention to work beyond their contractual retirement age.

Where an employer has not specified a notification procedure, the employee must:

•  Notify the employer in writing indicating that they do not consent to retire at that age, and

• The notification must be between three and twelve months before reaching the contractual retirement age

Where an employer has implemented a notification policy, the employee must comply with it or provide no more than six months’ notice, whichever is the shorter period.

Employer Obligations and Justification Requirements

Once an employee submits a valid notification, the employer’s obligations are significantly heightened. An employer cannot immediately enforce retirement and must first engage meaningfully with the request.

If the employer intends to uphold the contractual retirement age, they must, within one month, provide a reasoned written response outlining:

•  The legitimate aim relied upon, and

• How the decision is objectively justified, proportionate and necessary

While these principles align with existing discrimination law, the 2025 Act introduces an important additional requirement: employers must conduct an individualised assessment tailored to the specific employee. A generic or policy-based justification will no longer suffice.

Employers may find practical guidance in the Code of Practice on Longer Working, which has been updated to reflect these developments.

Flexibility for Employees

The 2025 Act also recognises that circumstances may change. Employees who have submitted a notification may subsequently withdraw it, provided they comply with:

• The employer’s contractual notice provisions, or

• The statutory minimum notice requirements under the Minimum Notice and Terms of Employment Act 1973, whichever is shorter

For more details, see our previous article: Contractual Retirement Ages Bill 2025: Implications for Employers and Employees

Workplace Relations Enforcement  

The Workplace Relations Commission (“WRC”) will play a central role in enforcing compliance with the Act. Employees may bring claims where an employer:

• Fails to engage with the notification, or

• Does not follow the prescribed process

An Adjudication Officer may grant a range of remedies, including:

• A declaration that the complaint is well or not well founded

• Reinstatement or re-engagement, and

• Compensation of up to 104 weeks’ remuneration or €40,000, whichever is greater

Protection Against Penalisation

The Act also introduces explicit protections against penalisation. Employers are prohibited from penalising or threatening to penalise employees who exercise their rights under the legislation. Any such conduct may give rise to a separate claim before the WRC.

Criminal Liability for Non-Compliance

In addition to civil remedies, the 2025 Act introduces criminal sanctions for certain breaches. Employers who fail to provide a reasoned written response to an employee’s notification may face:

• A Class A fine (up to €5,000)

• Imprisonment for up to 12 months, or both

Notably, liability may extend beyond the organisation itself to directors, managers, secretaries, or other officers who were involved in the contravention.

Conclusion: A Significant Change for Employers and Employees

The Employment (Contractual Retirement Ages) Act 2025 represents a significant evolution in Irish employment law, reinforcing the principle that retirement decisions must be fair, justified and increasingly driven by employee choice.

For employers, the Act introduces new procedural and evidential burdens, particularly the requirement for individualised justification.

For employees, it offers greater autonomy and protection in determining when their working life should end.

Now that the Act is in force, organisations should review their retirement policies and procedures to ensure compliance with this new legislative framework.

Further Information

For expert legal guidance on contractual retirement ages and the required obligations, please contact Partner Marc Fitzgibbon or Solicitors Nikita Kelly or Ernesta Staponkute in our Employment Team.

For more details, see our previous article: Contractual Retirement Ages Bill 2025: Implications for Employers and Employees