Ireland: New Obligations under the Employment (Contractual Retirement Ages) Act 2025

The Employment (Contractual Retirement Ages) Act 2025 (the Act) represents a major shift in how employers manage retirement. Although signed into law on 16 December 2025, the Act will not take legal effect until a ministerial commencement order is made. Once commenced, employers with contractual retirement ages of 65 or lower will face new compliance requirements when responding to requests from employees seeking to continue working.

 

Scope of the Act

The Act introduces a new default position: Employees may remain in employment until they reach the State Pension age (currently 66) unless an employer can objectively justify retirement at an earlier contractual age.

The Act applies to any employee who:

• has a contract (express or implied) specifying a retirement age below the State Pension age; and
• has completed their probationary period.

The Act does not apply to employees whose employment is subject to a statutory maximum retirement age or a statutory maximum service limit.

 

Process for Employee Notifications

An employee who wishes to work beyond the contractual retirement age may write to their employer notifying them that they do not consent to retiring. This written notification must be received no earlier than 12 months and no later than 3 months before the contractual retirement date.

Upon receiving a valid notification, employers must provide a reasoned written reply within one month, setting out:

• the legitimate aim relied upon in justifying retirement at the contractual age, and
• why the means of achieving that aim are appropriate and necessary for the employee concerned.

An employer shall not enforce the contractual retirement age before providing the response as set out above.  Otherwise, the employee shall not retire before a date to be agreed with the employer or once the employee reaches the State pension age (which occurs first).

 

Remedies and Employee Protections

The Act expressly prohibits employers from penalising or threatening to penalise employees for issuing (or proposing to issue) a notification.

Where an employer has breached their obligations under the Act, the employee may lodge a complaint with the Workplace Relations Commission (“WRC”). An Adjudication Officer of the WRC may require the employer to take a specific course of action such as re-instatement or re-engagement of the employee, or award compensation to the employee which is just and equitable, but not exceeding an amount up 104 weeks’ pay or €40,000, whichever is greater.   The Act also includes a number of criminal offences for non-compliance. An employer who fails to provide an employee with a reasoned written reply will be guilty of an offence punishable by a fine not exceeding €5,000 or a maximum 12-month prison term, or both.

Crucially, senior personnel — including directors, managers, secretaries and other officers — may be personally liable where offences occur with their consent or connivance. A defence is available where an individual can demonstrate that they exercised due diligence and took reasonable precautions to ensure compliance.

 

Conclusion

The Act has the potential to reshape employer approaches to longer working. The Act therefore signals a heightened standard for employers seeking to uphold earlier retirement ages.

Mandatory retirement below the State Pension age is not prohibited outright, but the pathway for doing so will be significantly narrower. Employers should anticipate updates to the WRC Code of Practice on Longer Working and should begin reviewing their retirement policies, notification procedures, and justification frameworks to ensure readiness once the Act is commenced.