The Employment (Contractual Retirement Ages) Act 2025 (No. 16 of 2025) (the “Act”) was enacted on 16 December 2025. The Act does not automatically take effect and will commence by Ministerial commencement order, employers should use this opportunity as a “near-term compliance” project as the Act will materially change how contractual retirement ages below state pension age are managed, potentially exposing employers to criminal sanctions, litigation and enforcement risks.
A Department of Enterprise, Tourism and Employment (DETE) update indicates the Act is expected to commence during 2026.
Purpose of the Act
The Act will allow, but not compel, an employee to remain in employment until the state pension age of 66 which will assist in bridging the income gap for employees retired before they are eligible for the state pension, as many private sector employers rely on a contractual retirement age often below the pensionable age of 66.
Irish law currently permits mandatory retirement ages provided they are objectively justified under the Employment Equality Acts 1998 (as amended). The Act introduces a specific statutory right and process for employees who do not consent to retire before they are eligible for state pension, providing employees with an additional avenue of complaint and redress beyond an equality claim.
Who will be covered?
Once commenced, the Act will apply where:
- the employee’s contract specifies a contractual retirement age below pensionable age; and
- the employee has completed a probationary period (if applicable).
The “non-consent” notification right: the core change
If an employee does not consent to retire at the contractual retirement age (below 66), they must notify the employer in writing:
- not less than 3 months and not more than 1 year before the contractual retirement date; or
- where the contract requires a longer notice period, not less than the employer notice period or 6 months, whichever is shorter.
(The Act limits the frequency of such notices to no more than twice in any 6‑month period).
Once a valid notice is issued to the employer:
- the employer must not enforce the contractual retirement age before providing a reasoned written reply within one month (failure to do so without reasonable constitutes a criminal offence); and
- the employer must not enforce the retirement age, before either:
- the date the employee consents to; or
- the date the employee reaches pensionable age,
whichever happens first.
Simply put, where the retirement age is below 66, the default position becomes: the employee stays (up to 66) unless the employer can objectively justify enforcing retirement at the earlier age.
Practical point for HR: your current retirement “runway” communications and timetable (often 6–12 months out) will need to align with these statutory timelines and the new one-month employer response obligation.
Can employers still enforce a retirement age below 66?
The Act preserves the concept of objective justification to uphold a retirement age, but only if the employer can demonstrate that:
- the retirement is objectively and reasonably justified by a legitimate aim, and
- the means of achieving that aim are appropriate and necessary.
The “reasoned written reply” obligation (and a new criminal offence)
If the employer proposes to enforce the contractual retirement age despite the employee’s non-consent notice, the employer must provide a reasoned written reply within one month setting out the justification.
Failure (without reasonable cause) to provide that reply is a criminal offence, exposing the employer (and, in certain cases, relevant officers of a corporate employer) to prosecution, with penalties including a class A fine and/or up to 12 months’ imprisonment on summary conviction.
Legitimate aims: evidence beats assumptions
The WRC’s Code of Practice on Longer Working remains a key practical reference point as it provides examples of potentially legitimate aims such as succession planning, intergenerational fairness, health and safety in safety‑critical roles, and maintaining a balanced age structure – while emphasising that retirement decisions require careful handling and objective justification.
The importance of substantiating such aims was shown in the WRC’s landmark decision published in December 2025, which upheld Eircom Limited’s (trading as Eir) right to enforce a mandatory retirement age of 65 where evidence was presented at the hearing to show that 60% of Eir’s field technicians were over 60. The company used this figure to rationalise the argument that in the absence of a fixed retirement age, it would be impossible to plan the hiring of apprentices to replace the aging workforce.
HR reality check: “workforce planning” as a label and vague justifications are not enough. Employers should expect to show role-specific reasoning, and why less intrusive alternatives would not achieve the stated aim.
The Act further points to a high burden on employers to justify the contractual retirement age in relation to the “the employee concerned”. An inference can therefore be drawn there that individual assessment by an employer appears to be necessary, which is contrary to the recent supreme court authority of Mallon v The Minister for Justice and others which determined that an individual assessment was not required to justify a mandatory retirement age under Employment Equality Acts.
Remedies
The WRC route is engaged once an employee has validly notified the employer that they do not consent to retire at a contractual retirement age below pensionable age.
From that point onwards, the Act imposes strict statutory obligations on the employer. A failure to comply with those obligations constitutes a stand-alone breach, regardless of whether the employer might otherwise have an arguable age-based justification.
In summary, the WRC-enforceable breaches under the Act fall into three clear categories:
- Procedural breaches following employee notification: Enforcing or progressing a retirement at the contractual age after a valid non-consent notification, without first complying with the statutory process (including delaying or bypassing engagement, setting a retirement date without consent, or acting before pensionable age).
- Substantive justification failures: Enforcing a contractual retirement age below pensionable age without being able to demonstrate a legitimate aim and that retirement at that age is appropriate and necessary, supported by evidence and consideration of less intrusive alternatives.
Process and treatment breaches: Failing to issue a timely, reasoned written reply within one month where enforcement is proposed, and/or penalising or disadvantaging an employee because they exercised their statutory right to refuse consent to retire (note that the scope of penalisation is broad, encompassing dismissal, demotion, intimidation, withheld training, negative performance assessment, and other detriments).
Where either of the above breaches are found to have occurred, remedies can include:
- a declaration,
- an order to take a specified course of action (including reinstatement or re-engagement), and/or
- compensation up to the greater of 104 weeks’ remuneration or €40,000.
WRC complaints/disputes are generally statute barred after 6 months, with scope (in many cases) to extend up to 12 months where there is “reasonable cause” for delay.
As dual or parallel claims are restricted, where the same conduct gives rise to a complaint under the Employment (Contractual Retirement Ages) Act 2025 and a claim under the Employment Equality Acts (including an age discrimination claim), relief cannot be obtained under both regimes for the same conduct, and the employee must ultimately elect their avenue of recourse.
Key Takeaway
Once commenced, the Act will mean that a contractual retirement age below 66 will not be enforceable by default where an employee notifies that they do not consent to retire. If an organisation intends to maintain a retirement age below State Pension Age, it should implement a clear retirement and longer working workflow aligned to the Act – covering notification handling, internal decision-making, the one-month reasoned reply, and a consistent approach to extensions.
The most effective way to minimise the compliance and litigation risk is to either remove the contractual retirement age if suitable to your business, or, align the contractual retirement age with (or beyond) the State pensionable age. In any scenario, employers should review and stress test their objective justification position, so it is evidence-led, role-specific and capable of being defended if scrutinised.
