Commencement of new statutory framework to govern contractual retirement ages in Ireland

At a glance

• The Employment (Contractual Retirement Ages) Act 2025 (Act) came into effect on 29 June 2026.
• This gives employees a statutory basis to challenge a contractual retirement age (CRA) below the state pension age (66).
• The Workplace Relations Commission (WRC) has published a revised Code of Practice on Longer Working, providing guidance in relation to the new provisions under the Act.

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Overview

The Act provides for a process which allows employees to give notice that they do not consent to their CRA, if their CRA is below the state pension age. While the Act is significant, it does not prohibit contractual retirement ages. Employers can enforce a CRA where it is objectively justified by a legitimate aim, which is appropriate and necessary.

Notification procedure

Employees who do not wish to retire at the CRA must notify their employer in writing that they do not consent to this:

• not less than three months and not more than 12 months before the CRA; or
• within the same timeframe as their contractual notice period, subject to a maximum period of six months. Employees may not submit more than two notifications in any six-month period.

Upon receipt of a valid notification, employers must either:

• agree to not enforce the CRA; or
• provide a written response within one month objectively justifying the CRA by reference to a legitimate aim.

If the employer agrees not to enforce the CRA, the employee is entitled to retire at a later date agreed between the employer and the employee or upon reaching the state pension age. The right to this notification procedure does not apply to employees who are within their probationary period.

WRC code of practice on longer working

A revised Code of Practice on Longer Working has also been published to account for the introduction of the Act. The revised code takes account of the new statutory changes, as well as addressing circumstances where an employee aged above the state pension age wishes to continue working.

As mentioned, an employer cannot enforce the contractual retirement age unless it is objectively and reasonably justified by a legitimate aim and the means of achieving that aim are appropriate and necessary. The WRC code of practice provides examples of what may constitute legitimate aims, including:

• Intergenerational fairness.
• Motivation and dynamism through the increased prospect of promotion.
• Health and safety (generally in more safety critical occupations).
• Creation of a balanced age structure in the workforce.
• Personal and professional dignity.
• Succession planning.

Enforcement and penalties

Complaints may be brought to the Workplace Relations Commission by an employee where their employer fails to adequately respond to the notification procedure, or if an employee considers they have been penalised due to having submitted a notification under the Act. The maximum award is up to two years' remuneration, or EUR40,000, whichever is higher.

Additionally, failure to provide a reasoned response may constitute a criminal offence by the company, punishable by a Class A fine (up to EUR5,000) and / or imprisonment for up to 12 months. If committed with the 'consent or connivance' of any director, manager, secretary or officer of the company, or anyone purporting to act in those capacities, that person may also be found guilty of a criminal offence.  

Impact on employers

The approach to CRA's is unlikely to change significantly, as the fundamental position remains the same: if an employer wishes to enforce a retirement age, it must be able to objectively justify that.

It is important for employers to stay on top of the statutory response timeframe as failure to comply can amount to civil and criminal liability.

Employers may wish to amend their contracts and policies to increase their contractual retirement age to 66, in order to eliminate the risk of claims under the Act.