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| 8 Sep 2026 | |
| Charity Sector News |
Employers must review how they handle requests from employees who wish to work beyond their contractual retirement age. New rules affect how these requests must be considered and when a decision to enforce retirement will require objective justification. Our Employment Law & Benefits team examines the Employment (Contractual Retirement Ages) Act 2025 and the new Code of Practice on Longer Working. We outline the key steps employers should now take.
The Employment (Contractual Retirement Ages) Act 2025 allows eligible employees to formally notify their employer that they do not consent to retire at their contractual retirement age and instead wish to work until the State Pension Age of 66.
The 2026 Code of Practice on Longer Working will replace the 2017 version. Its principle aim is to add to existing best practice guidance on the 2025 Act. While not legally binding, the Code is admissible in legal proceedings and serves as an important reference in disputes. From 29 June 2026, the 2025 Act is actionable by employees. Employers should expect greater scrutiny of the reasons relied on to justify retirement at a contractual retirement age.
The changes also represent a documentation challenge. Employers should be aware of the penalties under the Act and the higher threshold relating to the ‘the objective justification test’ as set out in the Act and elaborated upon in the Code.
The law as it relates to retirement in Ireland has changed significantly since 29 June 2026. The Employment (Contractual Retirement Ages) Act 2025 commenced on that date, introducing the right for employees to inform their employers if they do not consent to retire at the mandatory retirement age in their contract and instead, wish to work until they are 66. The new Code of Practice on Longer Working 2026 replaces the 2017 version and updates it to support the changes introduced by the 2025 Act. With the commencement date for both changes now passed, employers must action some key preparatory steps.
The Employment (Contractual Retirement Ages) Act 2025 allows eligible employees to formally notify their employer that they do not consent to retire at their contractual retirement age and instead wish to work until the State Pension Age of 66.
Employees must provide notice:
Employers are required to carefully consider any notification made under the Act. Where they decide to enforce a contractual retirement age, they must respond in writing to the employee’s notification within one month, providing a reasoned reply setting out the justification for the decision. Otherwise, an employer shall not be permitted to retire the employee before the date to which the employee consents or the date on which the employee attains pensionable age, whichever occurs first. The Act also provides that an employer cannot enforce a contractual retirement age after receiving a notification unless retiring that particular employee is objectively and reasonably justified by a legitimate aim. The decision must also be appropriate and necessary.
Employees who believe their rights have been breached can bring a claim before the WRC. The adjudication officer has a number of options for relief available including compensation up to 104 times the employee’s weekly salary or €40,000.
The Act provides for offences under the legislation. Significantly, an employer who, without reasonable cause, fails to provide an employee with a reasoned written reply in response to a notification, as described above, shall be guilty of an offence. Consequently, the employer shall be deemed liable on summary conviction to a class A fine or imprisonment for a term not exceeding 12 months or to both.
Read more on the Act in our previous insight.
Alongside the commencement of the 2025 Act, the Code of Practice on Longer Working 2026 has become the relevant code of practice for the purposes of the Industrial Relations Act 1990 from 29 June 2026 onwards. The 2026 Code replaces the 2017 version and its principal aim is to add to existing best practice, guidance on the 2025 Act. While not legally binding, the Code is admissible in legal proceedings and serves as an important reference in disputes.
It provides, for example, that where an employer accepts an employee’s notification request or agrees a new date for retirement, whichever is the earlier, arrangements should be made to reflect the employee’s continuation in employment in their contract of employment, as appropriate.
The Code also provides guidance to employers and unions on updating contractual retirement ages clauses in company policies and employment contracts. It also advises organisations to develop “clear internal procedures and templates to handle notification requests and company responses”. The Code provides that as a matter of best practice, employers should provide information about the relevant provisions in the 2025 Act to their supervisors and staff through awareness sessions and training courses.
Critically, the Code provides clarity on the scope of the objective justification test under the 2025 Act. It states that: “The 2025 Act requires the objective justification test to be applied to the retirement of the employee concerned”. In this way the test is a subjective objective justification test. An employer who receives a notification cannot enforce the contractual retirement age unless retiring that employee is objectively and reasonably justified by a legitimate aim. The decision must also be appropriate and necessary. The Code provides a list of questions that an employer should consider once a notification from an employee to work longer than their contractual retirement age is received to determine whether that employee comes within the scope of the 2025 Act or is an employee who wishes to work beyond 66 years. These include:
From 29 June 2026, the 2025 Act is actionable by employees. Employers should expect greater scrutiny of the reasons relied on to justify retirement at a contractual retirement age.
The changes also represent a documentation challenge. Employers should ensure that managers and HR teams understand when the statutory process is triggered, what response is required and how to record the reasons for any decision.
The risk is not limited to an employment relations dispute. The Act expressly provides for an offence where an employer, without reasonable cause, fails to provide the required reasoned written reply.
In light of the obligations introduced by the Act, employers should consider taking the following steps:
Employers should seek expert legal advice to understand their obligations and manage potential legal risks.
Contact Mason Hayes Curran's Employment Law & Benefits team
The content of this article is provided for information purposes only and does not constitute legal or other advice.
Article reproduced by Charities Institute Ireland with the kind permission of Mason Hayes & Curran
