Retirement Age Reform, What Irish Employers Need to Know About the Employment (Contractual Retirement Ages) Bill 2025
The Irish government has taken a significant step forward in reshaping retirement policy in the workplace with the publication of the Employment (Contractual Retirement Ages) Bill 2025. Once enacted, this legislation will introduce a new employment right, allowing, but not obliging, employees to remain in work until they reach the State Pension age.
So, what does this mean for employers, whose employment contracts include a mandatory retirement age?
Currently in Ireland, while retirement ages in employment contracts are common, they are subject to equality legislation, meaning employers can only set them if it's objectively justified by a legitimate aim and the means are appropriate and necessary. This objective justification requirement ensures that retirement ages are not used to discriminate based on age.
Key Changes Under the 2025 Bill
The headline change is this: employers will no longer be able to enforce a contractual retirement age below the State Pension age, unless the employee agrees to retire.
This represents a clear shift in the balance of decision-making around retirement. The Bill applies to any employee with a specified retirement age in their contract, whether explicitly written or implied by company practice. However, it does not apply to:
- Employees still in probation ,
- Roles governed by a statutory retirement age (e.g. certain public sector roles or positions with service limits).
It is of note that those on Probation, although not covered by this Bill, are still be governed by protections under the Equality Acts.
A New Right to Request to Stay
The Bill sets out a structured process for employees who wish to continue working past their contractual retirement age. They must:
- Submit a written notification to their employer,
- Do so at least three months and no more than one year before the contractual retirement date.
Employees will then have three options:
- Retire at the age specified in their contract;
- Work until the State Pension age;
- Retire at any point in between.
Once notified, employers can only enforce retirement if they can objectively justify it, using a legitimate aim and demonstrating that their approach is proportionate and necessary.
Obligations for Employers
If an employer plans to enforce retirement despite receiving a valid notification from an employee, they must:
- Respond in writing within one month,
- Clearly outline the objective justification for doing so.
Failure to meet these obligations could result in serious consequences. Under the Bill, non-compliance may amount to a criminal offence, with penalties including:
- A Class A fine of up to €5,000,
- Up to 12 months’ imprisonment,
- Or both / for both the organisation and any managers involved.
Employees can submit such requests on up to two occasions within a six-month period, offering flexibility for those planning their future.
Protection from Penalisation
Section 8 of the Bill also provides strong protections against penalisation. This includes any negative treatment; dismissal, demotion, threats, or disciplinary action, linked to an employee’s decision to remain in work beyond the contractual retirement age.
Employees can bring a claim to the Workplace Relations Commission (WRC) where:
- They did not receive a justified written response,
- The justification provided was not proportionate,
- Or they believe they were penalised for asserting their rights.
If the WRC upholds the complaint, it can award remedies including reinstatement, re-engagement, or compensation up to €40,000 or two years’ pay—whichever is higher.
What Should Employers Do Now?
Although the Bill is still making its way through the legislative process and may be amended, Irish employers—particularly those with established retirement practices below State Pension age—should begin preparing by:
- Reviewing existing employment contracts and retirement policies;
- Ensuring retirement processes are fair, documented, and justifiable;
- Training managers on how to handle requests to stay on past retirement age;
- Seeking advice if uncertain about how the changes may apply.
At MSS The HR People, we’re already working with clients to get ahead of this shift. If you need help reviewing your contracts and policies, or understanding how this legislation could impact your business, get in touch. We are here to support you through every stage of employment compliance.
PH: 01 8870690 / info@mssthehrpeople.ie
