The Employment (Contractual Retirement Ages) Act 2025

New legislation introduces a framework wherein employees can inform their employers if they do not consent to retire at the mandatory retirement age in their contract and instead, wish to work until they are 66. Our Employment Law & Benefits team sets out the key takeaways for employers, along with a practical checklist to help prepare for the Act's commencement.

What you need to know

• Notification requirements: Where the employee does not consent to retire at their contractual retirement age, they must inform their employer in writing and in accordance with the notification requirements set out in the Act.
• Justification requirements: An employer who receives a notification cannot enforce the contractual retirement age unless it is objectively and reasonably justified by a legitimate aim of the employer. The means of achieving the aim must be appropriate and necessary. The employer must provide a reasoned written reply within one month of the notification.
• Penalties for non-compliance: An employee may bring a claim under the Act to the WRC if the employer does not comply with their obligations under the Act.

The Employment (Contractual Retirement Ages) Act 2025 was enacted in December 2025. At the time of writing, no commencement date has been set, but one is expected following publication of a Code of Practice anticipated later this year. It should be noted that the provisions of the Act are not yet in force until a commencement order is made.

The Act provides that an employee may notify their employer if they do not consent to retire at the mandatory retirement age provided for in their contract. Instead, they may indicate their wish to work to the State pension age of 66. This applies in situations where the contractual retirement age is less than 66 years of age.

Some employees are deemed to be out of scope of the Act, for example:

• Those that have not completed their probationary period, or
• Those subject to a maximum retirement age/ maximum service limit, as set out by law

Our Employment Law & Benefits team outlines five important takeaways every employer should know about the new legislation, along with a practical roadmap of next steps.

1. Notification requirements

If the employee does not consent to retire at the contractual retirement age, they must notify their employer, in writing:

• Not less than three months and not more than one year before the date on which the employee is due to reach the contractual retirement age, or
• Where the notification period provided in the employee’s contract for termination of their employment is greater than three months, not less than this period or the period of six months, whichever is the shorter

An employee may not notify the employer more than twice in any six-month period.

2. Justification requirements

An employer who has received a notification from the employee cannot enforce the contractual retirement age before providing a reasoned written reply. The written reply must be provided within one month of notification. This written reply must set out the reasons for the contractual retirement age. These must be objectively and reasonably justified by a legitimate aim by the employer. In addition, the means of achieving the aim must be appropriate and necessary. If the employer does not provide a reasoned written reply, the employee can only be retired on a date they agree to, or the date on which they reach the age of 66, whichever comes first.

The Minister of State at the Department of Enterprise, Tourism and Employment, Niamh Smyth, underscored at the Second Stage debate in the Seanad in November 2025, that an employer “must be capable of justifying the retirement age for the individual worker as distinct from a general class of worker”. She commented that in this way, the threshold that needs to be met is higher than that provided for in the Employment Equality Acts, which will continue to have effect more generally.

Minister Smyth indicated that “This is not a general test” and that “it requires an individual assessment of the type of work involved and the employee’s continued ability to carry out that work. If an employer refuses and the employee challenges the decision, the WRC will examine all relevant factors, including the nature of the work, health and safety considerations and whether the employer’s justifications meet the legal standard.”

The parameters of an individual assessment should become clearer upon the publication of a Code of Practice.

3. Penalties for non-compliance

An employee can bring a complaint to the Workplace Relations Commission (WRC) where an employer does not comply with its obligations under the Act. The WRC may:

• Declare that the complaint is or is not well founded
• Require the employer to take a specified course of action, including re-instatement or re-engagement
• Require the employer to pay the employee compensation of maximum 104 times the employee’s weekly salary or €40,000, whichever is greater

A number of criminal offences are also set out in the Act for non-compliance. An employer who fails to provide an employee with a reasoned written reply will be guilty of an offence. This offence is punishable by a fine not exceeding €5,000 or a maximum 12-month prison term, or both. Where this offence is committed by a company with the consent or connivance of a director, manager, secretary or other officer of the company, that person shall also be guilty of an offence.

4. Protection against penalisation

Employers are not permitted to penalise or threaten to penalise employees that inform them of their wish to work until the age of 66. The Act also prohibits any threat of penalisation for taking or proposing to take this step. Penalisation includes suspension, dismissal, demotion, transfer of duties, discipline, harassment, discrimination and other similar detrimental acts and omissions.

5. Employer checklist

In light of the obligations introduced by the Act, employers should consider taking the following steps:

• Conduct a retirement audit: Identify employees subject to a contractual retirement age below 66 and who are due to reach this age in the next 18 - 24 months. This helps ensure employers know which employees may trigger the notification process and are not caught off guard by requests to remain in employment.
• Engage early with employees: Where appropriate, encourage early, informal discussions with employees approaching retirement age to manage expectations and reduce the likelihood of disputes.
• Review policies and procedures: Update retirement-related policies and procedures to reflect the significant changes introduced by the legislation.
• Informing and training staff: Ensure HR and management teams are aware of the legislative changes and that appropriate training is planned in advance of the Act’s commencement.
• Assess the objective justification: Review the rationale for any contractual retirement age below the State pension age of 66. Where such an age is enforced, ensure it is supported by an objectively and reasonably justified legitimate aim, and that the means of achieving that aim are appropriate and necessary.
• Ensure consistency of decision-making: Apply retirement ages and justifications consistently across comparable roles to mitigate discrimination risk.
• Review pension and benefits alignment: Check how extended employment may interact with occupational pension schemes, insurance cover and other age-related benefits, and take advice where necessary.

Conclusion

The Act requires employers to take proactive steps ahead of its commencement later this year. We are already seeing, and expect to see further, an increase in requests from employees to work beyond the age of 65, even though the legislation has not yet commenced. Employers should seek expert legal advice to understand their obligations and manage potential legal risks.

For more information and expert advice, contact a member of our Employment Law & Benefits team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.