Employer Update: New Employment (Contractual Retirement Ages) Act 2025

Overview

The Employment (Contractual Retirement Ages) Act 2025 (the “Act”) has passed through both Houses of the Oireachtas and was signed into law by the President on 16 December 2025. A commencement order will be required before the provisions of the Act come into force.

This update sets out the key provisions of the Act and the practical steps employers should be taking to prepare.

Consent-Based Approach to Contractual Retirement Ages

The Act introduces a consent-based approach to contractual retirement ages. Once commenced, employees who are subject to a contractual retirement age that is below the state pension age (currently 66 years of age) may notify their employer in writing that they do not consent to retire at the contractual retirement age. The employer will then be required to engage with that notification.

Employee Notification Requirements

• An employee’s written notice of non-consent must be provided at least three months, but not more than one year, before the date on which the employee would reach the contractual retirement age.
• Where an employer has set a specific notification period that exceeds three months, the employee must give notice which is not less than this notification period or six months, whichever is shorter
• In practice, employers may specify an internal window of up to six months, provided it is clearly communicated in their policies or contracts.

Employer Response

Once an employee has submitted a non-consent notice, employers cannot enforce the contractual retirement age before providing a reasoned written reply.

This reply must be provided within one month of the notification. An employer may only enforce a contractual retirement age where it is objectively and reasonably justified by a legitimate aim of the employer. The means of achieving the aim must also be proportionate.

The written reply must set out this justification and the reasons for the contractual retirement age. Employers may not penalise employees for issuing or proposing to issue a non-consent notice.

Offences and Penalties

A failure to provide a reasoned written reply to an employee’s non-consent notice will be punishable by a Class A fine of up to €5,000, up to 12 months’ imprisonment, or both. If the offence is committed by a company with the consent of a responsible officer, there is potential liability for both the company and the responsible officer.

In addition to the criminal offence, the WRC may award compensation of up to two years’ gross remuneration or €40,000, whichever is greater, for breaches of the legislation. Employers should also remain mindful that any enforced retirement age must be capable of objective justification to mitigate exposure to age discrimination claims, which remain a live risk.

Next Steps for Employers

Employers should take the following steps now to prepare for commencement of the Act:

1. Identify employees who are subject to a contractual retirement age below 66 and who are due to reach this age in the next 12 months. This will ensure employers are aware of which employees may commence the notification process.
2. Review retirement policies and procedures. If an employer has a contractual retirement age in place, now is the time to ensure it is clearly documented and any employer notification windows are set out clearly.
3. Prepare procedures and templates for acknowledging and issuing reasoned written replies to non-consent notices. As noted above, failure to provide a reasoned written reply is a criminal offence, and having a template and a clear process in place is essential.
4. HR teams and managers should be trained on the new requirements with particular emphasis on the prohibition of penalisation.