At a glance
- On 1 April 2025, the Employment (Contractual Retirement Ages) Bill 2025 (Bill) initiated its progress through the legislative stages.
- The Bill, once enacted, will allow employees who are subject to contractual retirement ages below the State Pension Age (which is currently 66) to notify their employer that they do not consent to retirement at the contractual retirement age.
- Employers who receive such notification must not enforce the contractual retirement age unless they can objectively and reasonably justify the retirement of the individual employee concerned.
The Bill is part of the Irish government's commitment to the implementation of pension reforms for a sustainable pensions system. The Bill proposes measures which will allow employees to stay in employment until the State Pension Age, ensuring they have adequate and predictable income on retirement.
We set out below the main changes which will be introduced if the Bill is enacted as currently drafted.
Notification procedure
Employees who are subject to a contractual retirement age that is below the State Pension Age and do not consent to retirement at the contractual retirement age must notify their employer of that.
The notification must be provided in writing and should be given no less than three months and no more than one year before the employee reaches the contractual retirement age. If the employment contract specifies a longer notice period, the employee must adhere to that period, or six months, whichever is shorter.
An employer who has received a notification in accordance with the notification procedure set out in the contract (or above) must not enforce the contractual retirement age unless the retirement of the individual employee concerned is objectively and reasonably justified by a legitimate aim, and the means of achieving that aim are appropriate and necessary.
Employers proposing to enforce the contractual retirement age notwithstanding the employee's written notification must, within a month of the notification, provide a reasoned written reply setting out the justification for the proposed enforcement.
Other relevant proposed changes
Employees will be protected from penalisation for exercising or proposing to exercise their rights under the legislation.
Employees who believe their employer has not complied with the legislation will be able to refer a complaint to the Workplace Relations Commission (WRC). The WRC may award compensation just and equitable in the circumstances of up to two years' gross remuneration or EUR40,000, whichever is greater.
Finally, if, without reasonable cause, an employer fails to provide an employee with a reasoned written reply in response to the employee's written notification will be an offence liable on summary conviction to a fine not exceeding EUR5,000 or imprisonment for up to 12 months, or both.
Next steps
We continue to monitor the developments around contractual retirement ages whilst the Bill progresses through the legislative stages. Employers are advised to consider whether their contractual retirement ages are objectively and reasonably justifiable to achieve a legitimate aim and be prepared to comply with the proposed requirements.
If you require further information in relation to contractual retirement ages, please contact a member of DLA Piper’s Irish Employment team.
More to explore
