New Legislation: The Employment (Contractual Retirement Ages) Act 2025

Overview

The Employment (Contractual Retirement Ages) Act 2025 (the "Act") was signed into law on 16 December 2025 and is expected to enter into force during 2026. Once commenced, it will change how employers manage contractual retirement ages that are less than the State pension age, which is currently 66. Employers should be aware of the changes.

The Act provides that where the employee's employment contract contains a contractual retirement age that is lower than the State pension age, the employee may notify the employer that they do not consent to retire at the contractual retirement age.

The Act does not apply to employees who:

• Are still in a probation period; or
• Are subject by law to a maximum service limit or a maximum retirement age; or
• Have a contractual retirement age that exceeds the State pension age.

Notification to Employer

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

• At least three months, but less than one year before the employee's contractual retirement age; or
• Where the employer notification period is more than three months, not less than the employer period specified or six months, whichever period is shorter.

Employer Response to Notification

An employer who has received a valid employee notification shall not enforce the contractual retirement age unless:

• The retirement of the employee concerned at the contractual retirement age is objectively and reasonably justified by a legitimate aim by the employer, and
• The means of achieving that aim are appropriate and necessary.

Where an employer wishes to enforce the contractual retirement age despite receiving an employee notification, they must provide a reasoned written reply within one month.

Employer Offences

It is an offence for an employer to fail to provide an employee with a reasoned written reply without reasonable cause. In those circumstances, the employer shall be liable on summary conviction to a fine not exceeding €5,000 or imprisonment for up to 12 months or both. Where the employer is a body corporate, both individual officers of the employer as well as the employer itself can be prosecuted.

Employee Redress

An employee may bring a claim under the Act to the Workplace Relations Commission where the employee believes the employer is not in compliance with their obligations under the Act. An adjudication officer may:

• Declare that the complaint was not well founded;
• Require the employer to take a specified action, including re-instatement or re-engagement;
• Award compensation of up to 104 times the employees' weekly salary or €40,000, whichever is greater.

Employee Protection from Penalisation

Employers are prohibited from penalising or threatening to penalise an employee for exercising their right to not retire at the contractual retirement age. 'Penalisation' under the Act may include suspension, dismissal, demotion, transfer of duties, change of location or working hours and discrimination, as further detailed in the Act.

Conclusion

Once the Act is commenced, it will impose new obligations on employers where employees choose to work beyond their contractual retirement age and up to the State pension age.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.