Commencement of the Employment (Contractual Retirement Ages) Act 2025

The Employment (Contractual Retirement Ages) Act 2025 (Commencement) Order 2026 has now been published. After a period of delay pending a review of the existing Code of Practice on Longer Working, the Order confirms that the Employment (Contractual Retirement Ages) Act 2025 (“the Act”) will come into operation on 29th June 2026.

The Act adopts a consent-based approach to retirement in circumstances where an employee’s contractual retirement age is lower than the State pension age (currently aged 66). This gives employees a statutory mechanism to seek to remain in employment beyond their contractual retirement age.

Where an employee does not consent to retire at the applicable Contractual Retirement Age, they may notify their employer in writing of their intention to continue working. This notification must be provided:

• no less than 3 months and no more than 12 months before the contractual retirement date; or
• where the employer’s notification period is greater than 3 months, not less than the period specified or 6 months (whichever is shorter).

A key feature of the legislation is the obligation on the employer to engage with such requests. Where an employer receives a notification:

• they should not enforce the contractual retirement age unless doing so can be objectively and reasonably justified by a legitimate aim, and the means of achieving that aim are appropriate and necessary; and
• where the employer intends to enforce the contractual retirement age, they must provide a reasoned written response within one month of receipt of the notification. Failure to do so, without reasonable cause, may be a criminal offence.

On summary conviction, this may result in a fine of up to €5,000 and/or imprisonment for up to 12 months. Liability may attach not only to the employer entity itself, but also to directors, managers and other officers, where it can be shown that the offence was committed with their consent or connivance. An employee can also refer a complaint to the WRC for an employer’s failure to meet its obligations under the Act. In the case of well-founded claims, the WRC can order compensation up to 104 weeks remuneration or €40,000, whichever is greater.

In parallel with the Act, a revised Code of Practice on Longer Working will also come into effect on 29th June 2026. The Code is intended to guide employers and employees in engaging constructively in advance of retirement, including where employees wish to continue working beyond a contractual retirement age or beyond age 66. The Code draws an important distinction in how the objective justification test is applied.

Takeaway for Employers:

This legislation represents a material shift in the operation of contractual retirement ages and increases the level of scrutiny on employer decision-making in this area.

Employers should:

• Review contracts and policies to ensure that retirement provisions are consistent with the new regime;
• Ensure that there is a clear internal process for handling requests to work beyond a contractual retirement age;
• Prepare to give reasoned and documented responses to requests, supported by objective justification where retirement is being enforced; and
• Be mindful of the potential for criminal liability arising from a failure to engage appropriately with employee requests.

Given the legal and practical complexities, and the potential exposure arising from non-compliance, employers should seek legal advice at an early stage when dealing with requests to extend employment beyond a contractual retirement age.

Links:

Employment (Contractual Retirement Ages) Act 2025
Code of Practice on Longer Working

29th May 2026

Authors – Jane Holian and Ethna Dillon

AOC Solicitors
19–22 Baggot Street Lower
Dublin 2

www.aocsolicitors.ie