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The Employment (Contractual Retirement Ages) Act 2025 Commencement Order 2026 has been published, confirming that the Act will commence on 29 June 2026.
The Act adopts a consent based approach to the issue of contractual retirement ages. It provides that where an employee is subject to a contractual retirement age (‘CRA’) that is less than the pensionable age and does not consent to retire at the CRA, they must notify their employer in writing:
- at least 3 months but not more than 1 year before the date on which they would reach the CRA; or
- where the employer notification period is greater than 3 months, not less than the employer notification period or the period of 6 months, whichever is shorter.
Significantly, the Act introduces a new offence in respect of which both bodies corporate and inpiduals can be prosecuted. The Act provides that an employer who, without reasonable cause, fails to provide an employee with a reasoned written reply will be guilty of an offence and liable on summary conviction to a class A fine (i.e. a fine not exceeding €5,000) or imprisonment for up to 12 months or both. The offences apply to both the body corporate itself and, where proven to have been committed with the consent or connivance of any person, to directors, managers, secretaries or other officers of the body corporate and anyone purporting to act in any such capacity.
As we prepare for the commencement of the Act later this month, the revised Code of Practice on Longer Working (the “Code”) has been published and will also come into effect on 29 June 2026.
The purpose of the updated Code is to provide guidance to employers, employees and their representatives, on the best principles and practices to follow during engagement between employers and employees in the run up to retirement. The Code now offers guidance on:
- employees who are approaching their CRA for their job which is less than the qualifying age for the State pension (currently 66 years) but wish to continue working beyond this date and to whom the Act applies; and
- those employees aged 66 and older who wish to continue in employment.
It is important to note that the objective justification test for contractual age-related retirements is differentiated in the Code between the treatment of workers who come within the scope of the Act and those who are aged 66 and older who wish to request longer working. The Act requires the objective justification test to be applied to the retirement of the employee concerned while the application of the objective justification test for workers aged 66 and older relates to fixing different retirement ages for various classes or descriptions of employees.
For a detailed consideration of the Act, see our Insights Blog post here: Changes to retirement ages on the way: The Employment (Contractual Retirement Ages) Bill 2025 is published
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.
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