26 January 2026
In December 2025, the Employment (Contractual Retirement Ages) Act 2025 (the ‘Act’) was signed into law, introducing significant reforms to the management of contractual retirement ages in Ireland. For background on this new legislation, see our earlier analysis: Employment (Contractual Retirement Ages) Bill 2025 - KPMG Law LLP
The Act provides for employees to request to continue working up until the state pension age (66), where the contractual mandatory retirement age stipulated by the employer is below 66. If an employment contract specifies a mandatory retirement age below 66, the employee may now choose to retire at that age or at any point up to age 66.
The Act applies to any employee who has completed probation and whose contract of employment prescribes a mandatory retirement age that is below the pensionable age. The aim of the Act is to ensure employees have an option not be left without income between the end of their employment and the beginning of their state pension.
Under the Act, an employee who wishes to work beyond their contractual retirement age must notify their employer no less than 3 months and no more than one year before the date they will reach the contractual retirement age. Where the employer requires a notification period of more than 3 months’ notice, the employee can either adhere to the period of notice provided by the employer or provide 6 months’ notice, whichever is less.
Where an employer receives notice from an employee to continue working beyond the contractual retirement age, the employer cannot enforce the contractual retirement age unless it is objectively and reasonably justified by a legitimate aim. Any means used by the employer to enforce the contractual retirement age must be appropriate and necessary.
Where an employer elects to enforce the contractual retirement age, they must provide a reasoned written reply to the employee within one month of receipt of notification. An employer who, without reasonable cause, fails to provide an employee with a reasoned written reply shall be guilty of an offence under the Act.
The Act prohibits employers from penalising employees for exercising their right to remain in employment. Penalisation includes suspension, demotion, intimidation, loss of opportunity for promotion and a change of location of place of work.
Employees can file a complaint with the Workplace Relations Commission, if they believe there has been a contravention of the Act, such as being forced to retire at a contractual age without objective justification. An adjudication officer can decide on the complaint and may:
In the event of a party being dissatisfied with the adjudication officer’s decision, they may appeal the decision to the Labour Court.
The Act also provides a number of criminal offences. Failure to provide an employee with a reasoned written reply may attract a fine of up to €5,000 or a term of imprisonment of up to 12 months (or both).
While the Act has not yet commenced, employers should review their mandatory retirement ages. If the retirement age is below 66, employers should be ready to respond to written requests from employees to stay in employment beyond the contractual age within one month of receiving such a request.
Employers should review their current justifications for enforcing contractual retirement ages and ensure that they are reasoned and objective, and that the aims of such are legitimate, appropriate and necessary. HR staff and relevant management may need to be trained on the impact of these changes to ensure that all requests are responded to appropriately, in time, and that the employer is acting in a consistent and objective manner in dealing with employees working beyond their contractual retirement ages.
At KPMG Law LLP, our Employment Law team led by Aoife Newton, provides comprehensive advice on all matters relating to employment contracts and the most effective strategies for employers in light of recent changes to retirement practices in Ireland. Please contact a member of the team for more information.
