Ireland's retirement landscape is about to get a major shake-up! A new law has been signed, empowering employees to potentially work beyond their contractual retirement age. But here's the twist: it's not a mandatory change for employers.
The Employment (Contractual Retirement Ages) Act 2025, signed by the President on December 16, 2025, introduces a groundbreaking employment right. It enables workers to stay in their jobs until age 66, matching the State pension eligibility age. However, it's not an obligation for employers to retain these employees.
The current scenario: Many employers set a contractual retirement age, often at 65 or even younger. This new law is a game-changer for employees who wish to continue working past that age.
Legal Perspective: Joanne Hyde, a partner at the international law firm Lewis Silkin, sheds light on the impact. She explains that employees can now choose to work beyond their contractual retirement age by notifying their employer between three months and a year before the scheduled retirement date.
But here's where it gets controversial: Can employers refuse such requests? Absolutely, but they must respond in writing within a month, providing objective and reasonable justifications. These justifications must align with legitimate business aims, and the means to achieve them must be proportionate.
The Legal Grey Area: Ms. Hyde points out an intriguing aspect. Until now, case law has established that objective justification could be at an organizational level, such as general health and safety or succession planning. However, as this new legislation takes effect, there's a shift towards employee-specific justifications.
The Debate: If health and safety is cited as a reason, an employee might argue that they are fit and healthy, requiring the employer to provide an objective justification specific to that individual. This interpretation adds a layer of complexity and raises questions about fairness and practicality.
Clarity on the Horizon: Anticipation builds around an expected code of practice to accompany the legislation. This code will provide much-needed clarity on what constitutes an objective justification for refusing extended employment.
The Countdown: While the law is signed, it won't take effect until a commencement order is issued by the Minister. Although no specific date is set, it's expected to happen later this year. The Minister assures a suitable lead time before commencement.
Preparing for Change: The department of Enterprise, Tourism, and Employment is collaborating with the Workplace Relations Commission to ensure clear communication about the new rights and responsibilities for both workers and employers. The goal is a smooth transition and consistent implementation of this groundbreaking legislation.
What are your thoughts on this upcoming change? Do you think the code of practice will provide sufficient clarity? Share your opinions and join the discussion on this evolving retirement landscape!
