Key Contacts: Cian Moriarty – Partner | Bláthnaid Evans – Partner | Catriona Walsh – Senior Associate |
The Employment (Contractual Retirement Ages) Act 2025 (the “Act”) reforms the regulation of retirement ages in Irish employment contracts. Enacted on 16 December 2025, it strengthens employee rights where contracts specify a retirement age below pensionable age (currently 66) and provides a framework for employers seeking to rely on such clauses.
The Act will not come into operation until the making of a commencement order(s),which is expected during 2026. Employers should therefore prepare now – particularly by reviewing retirement clauses and HR processes, while monitoring the commencement order(s).
Scope and Application
The Act applies where:
- the employee is subject to a contract of employment (express or implied) that specifies a contractual retirement age below pensionable age (currently 66); and
- the employee has completed their probationary period.
It does not apply to an employee who is subject to a maximum retirement age or service limit required by law.
The Act only applies where the contract specifies a contractual retirement age which is less than the pensionable age (currently 66).
Right to Refuse Contractual Retirement Age
Where an employee does not consent to retire at the contractual retirement age, they may notify the employer in writing:
- at least 3 months (and not more than 1 year) before reaching the prescribed contractual retirement age; or
- where the contractual, employer notification period is more than 3 months, not less than that period or 6 months (whichever is shorter).
An employee may give such notification no more than twice in any 6‑month period.
An employee may withdraw the notification, subject to notice requirements (the shorter of the employer notification period or statutory minimum notice period).
Employer Obligations and Justification
Once a valid notification is received, the employer:
- must not enforce the contractual retirement age before providing a suitable reasoned written reply (see further detail below); or
- must not retire the employee before a date to which the employee consents, or the date the employee reaches pensionable age, whichever occurs first.
If the employer proposes to enforce the contractual retirement age, it must provide a reasoned written reply within one month of the employee notification, setting out the justification.
That justification must demonstrate that:
- the retirement of the employee concerned, at his or her 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.
Process Timeline
In practical terms, the Act creates a notice-and-response process. The timeline below summarises the key steps.
| Timeframe/Rule 1 | Description |
| T–12 to T–3 months | Employee may notify the employer in writing that they do not consent to retire at the contractual retirement age. |
| Contract notice rule (where applicable) | If the contract’s employer notification period is greater than 3 months, the employee must notify not less than that period OR not less than 6 months (whichever is shorter). |
| Within 1 month of notification | If the employer proposes to enforce the contractual retirement age, it must issue a reasoned written reply within one month, setting out objective justification and the legitimate aim for doing so, which must be appropriate and necessary. |
| Default position after notification | The employer must neither enforce the contractual retirement age before the reasoned reply; OR retire the employee before a date the employee consents to, or the date the employee reaches pensionable age, whichever occurs first. |
| WRC route | An employee can bring a claim under the Act to the WRC (within 6 months of the breach), and on appeal to the Labour Court. |
1 T = date employee reaches the contractual retirement age
Protection Against Penalisation
Employers must not penalise (or threaten penalisation of) an employee for proposing to exercise, or having exercised, the notification right under the Act. Penalisation is defined broadly and includes dismissal, demotion, pay reduction, change of location, coercion/harassment, discrimination, withholding training and negative references, among other detriments.
Enforcement and Remedies (WRC/Labour Court)
If an employer has contravened the Act, an employee can bring a claim before the WRC within 6 months of the breach.
An adjudication officer may, when hearing a claim for contravention of the Act:
- declare the complaint well‑founded or not;
- order a specified action (including reinstatement or re‑engagement); and/or
- award compensation up to the greater of 104 weeks’ remuneration or €40,000.
Where the employer’s conduct constitutes both a contravention under the Act and the Employment Equality Acts 1998 – 2021, the employee cannot seek relief under both pieces of legislation.
Offences and Penalties
Failure (without reasonable cause) to provide the required reasoned written reply is a criminal offence, punishable on summary conviction by a class A fine or by imprisonment of up to 12 months (or both).
Corporate officer liability may arise where an offence is committed with consent/connivance of a director/manager/secretary or similar officer. The WRC may prosecute and the court may order costs to be paid to the it.
Practical Steps for Employers
Employers with retirement clauses should review their contracts of employment now:
- assess whether existing contracts require updating if retirement age is below pensionable age (for example, older contracts may specify a previous pensionable age):
- audit contracts and or retirement policies for stated retirement ages, to reinforce the legitimate aim for having the retirement age;
- create a documented process for handling notifications and issuing reasoned replies within 1 month;
- build an evidence pack for “legitimate aim / proportionality” analysis; and
- train managers on penalisation risk and consistent communications.
Conclusion
The Act changes how employers can apply contractual retirement ages below pensionable age, combining a consent‑based mechanism with objective justification, strict timelines and significant remedies. Employers should review retirement arrangements and prepare operationally ahead of commencement.
For further information, please contact Cian Moriarty, Bláthnaid Evans, Catriona Walsh or your usual Employment team contact.
