Róisín O’Donoghue
Hello and welcome to the Arthur Cox Podcast. My name is Róisín and I’m an associate in the Employment Law Group and I’m joined today by my colleague Melissa.

Melissa O’Sullivan
And today we’re going to look at the Contractual Retirement Ages Act 2025 and the Revised Code of Practise on Longer Working, both of which came into effect on the 29th of June, 2026. The new legislation introduces a consent based framework for employees who are subject to a contractual retirement age, which is below the state pension age and so there are important new obligations for employers to consider.

Róisín O’Donoghue
And with the Act now in force, it’s time for employers to get up to speed. So today we’re going to chat through what has changed, the key issues and the practical steps that can be taken. So Melissa, we’ll start with the basics. What is it that the Act is actually trying to achieve?

Melissa O’Sullivan
So the Act addresses the gap where an employee’s contractual retirement age is below the state pension age, which is currently age 66. And it basically allows employees in this position to notify their employer that they do not consent to retire at the contractual retirement age. Crucially, it specifically focuses on this gap. It doesn’t allow employees to remain in employment indefinitely, and it doesn’t apply to retirement ages set out in statute.

Róisín O’Donoghue
And it’s important to say that contractual retirement ages haven’t disappeared and employers can still have them. But what has changed is that employers can no longer assume that retirement will automatically happen at the contractual retirement age, because if an employee invokes their right under the legislation, the employer needs to engage accordingly. So while the Act raises the bar, it doesn’t make the enforcement of contractual retirement ages impossible in every situation.

Melissa O’Sullivan
Exactly. And it’s also worth mentioning that the Act does not apply to employees who are on their probationary period. So it’s not a right as of day one but once an employee is established in their role and is approaching a contractual retirement age below 66, that is where the Act kicks in.

Róisín O’Donoghue
And what does the notification process look like?

Melissa O’Sullivan
So the employee must notify their employer that they do not consent to retire at the contractual retirement age, and they must set out the basis under Section 5(1) of the Act. The notification must generally be made at least three months, but not more than one year before an employee’s contractual retirement date. But where an employer’s notice period is longer than that, they must give at least this period or six months, whichever is shorter.

Róisín O’Donoghue
And it’s worth noting that given the minimum three month notification period, the earliest contractual retirement date the Act applies to is the 29th of September, 2026. And if there’s a situation where an employee changes their mind, they can withdraw their notification in line with their contractual or statutory notice period, whichever is the shorter but they can’t notify more than twice in any six month period. So what the Act actually does is that it gives eligible employees the right to seek to remain in employment until the age of 66, and any request to work beyond 66 falls to be considered outside of the Act and will be dealt with, with the organisation’s normal retirement arrangements, the Code of Practise and the Employment Equality Acts.

Melissa O’Sullivan
So employers should really expect to start receiving these notifications now, and they need processes in place to deal with these notifications.

Róisín O’Donoghue
Exactly. And that brings us to what actually happens once these notifications come in.

Melissa O’Sullivan
Yeah, so employers can no longer just simply proceed with retirement. They must consider whether enforcing the contractual retirement days is objectively and reasonably justified by legitimate aim, and the means of achieving that aim are appropriate and necessary.

Róisín O’Donoghue
And objective justification as a concept isn’t new, but there’s an important distinction under the 2025 Act. The test must be applied to the individual employee, so it’s not enough to point to a general policy rationale. The employer has to show why enforcing retirement in respect of that individual employee is justified.

Melissa O’Sullivan
Yeah, this is really important. So the code introduces two distinct objective justification tests. Where an employee falls within the 2025 Act, an individual objective justification test applies. So that’s specific to that employee and it’s on a case by case basis. Whereas where an employee is age 66 or over, the objective justification test that applies is the class based objective justification test under the Employment Equality Acts and employers really need to know which one applies in each case because there are different processes for each one.

Róisín O’Donoghue
And with those class based justifications, the code lists the familiar examples that we all aware of intergenerational fairness, succession planning, motivation through the prospect of promotion, health and safety in those safety critical roles, maintaining a balanced aid structure and personal and professional dignity. But for requests that come in under the 2025 Act, simply pointing to one of these general rationales isn’t going to be sufficient and employers need to demonstrate with evidence why enforcing retirement for that particular employee is appropriate and necessary. So in summary, the generic rationales won’t do. So Melissa, we’ll turn to the response requirements. So where an employer proposes to enforce the contractual retirement age, they need to provide a reason written reply to the employee within one month of receiving that notification. And this is a strict deadline.

Melissa O’Sullivan
Yeah, exactly and this is where enforcement comes in. So where an employer does not respond within that one month period without reasonable cause, it may constitute a criminal offence and on summary conviction, employers may face fines of up to €5,000 and/or imprisonment for up to 12 months. And liability can also extend to directors, managers and officers where the offence is committed with their consent or connivance. Employees can also bring claims before the WRC, and the WRC can direct compliance and award compensation of up to €40,000 or 104 weeks’ remuneration, whichever is greater. The Act also introduces robust anti-penalisation provisions. So, for example this covers dismissal, demotion, loss of promotion opportunity, change to work duties or work hours. So it really covers any form of unfair treatment.

Róisín O’Donoghue
Exactly. So I think it’s clear that there’s a compliance dimension to this at both an organisational and an individual level, which emphasises the importance of having clear procedures in place before the notifications actually start to arrive. So this brings us to the practical steps that employers should be taking now.

Melissa O’Sullivan
Yeah, so the first step really is for employers to identify the contractual retirement ages that apply and determine which employees come within the scope of the 2025 Act and which employees fall outside that scope. So, for example, employees aged 66 or over. It’s also worth highlighting that employers should notify employees of their intention to retire them at their contractual retirement age within 6 to 12 months of that date. The initial notification should be in writing, but should be followed up by a face to face meeting.

Róisín O’Donoghue
And employers should then turn to reviewing their retirement policies, their handbooks and their internal procedures and what they need to identify is whether these policies now cater for the two processes. So the first process is the statutory process, which we’ve discussed, which applies where an employee has a contractual retirement age below 66. This process triggers the written notification, the one month response deadline, the individual objective justification test, and the enforcement provisions. Separately then is the non-statutory process. So this is provided for under the Revised Code of Practise and it applies to requests from employees who are aged 66 or over. These requests don’t engage the Act but are governed the Code and the employment equality legislation with the class based objective justification test. And the code is quite clear that it recommends that organisations develop clear procedures for handling both types of requests and makes that distinction quite explicit.

Melissa O’Sullivan
And that distinction really just can’t be overstated. Employers could be dealing with two processes simultaneously. So for example, if an employee has a contractual retirement age of 63, they’ll be under the 2025 Act. And then for employees who are aged 66 or over, they’ll be outside of that Act. So both requests may look similar on their surface, but there’s different rules and consequences and mixing them up could be quite costly.

Róisín O’Donoghue
Exactly and I think what is clear is that a generic retirement policy is unlikely to be sufficient going forward. What is actually needed is a framework which identifies which process applies depending on the employee’s age and circumstances. The framework then needs to set out the correct procedure for each and ensure that managers and HR personnel understand the difference between the two and getting ahead of this now will obviously make managing the individual situations as they come in a lot easier to navigate.

Melissa O’Sullivan
Exactly, Róisin and employers should also revisit the objective justifications that underpin their contractual retirement age, just to make sure that they’re ready to respond to requests when they come in.

Róisín O’Donoghue
And finally, record keeping is really important. So employers should maintain clear records of all notifications, all individual meetings that are held and any decisions or communications that are issued. And as you mentioned, Melissa, those meetings with the individual employees should really be held in person where possible and detailed notes should be kept because if an employer finds themselves in a situation where a decision is later challenged, having a clearly documented process will be invaluable.

Melissa O’Sullivan
Yeah Róisín, and it’s also worth mentioning that the code has two helpful template documents. So a template policy guideline for employers on contractual retirement ages and a template notification letter for employees also.

Róisín O’Donoghue
So the Contractual Retirement Ages Act of 2025 represents a fundamental shift in how contractual retirement ages are going to operate in Ireland going forward. The consent-based framework, the response deadlines, and the enforcement provisions make it really essential that employers are prepared.

Melissa O’Sullivan
Exactly Róisín, and my key takeaway really is that retirement can no longer be treated as an automatic process. There are now two distinct processes that employers must have in place, both of which can run in parallel. So there’s the statutory regime under the 2025 Act that applies to employees below 66. And that objective justification test is individualised, specific and on a case by case basis. And then there’s the non-statutory regime under the Code of Practise, which applies to employees aged 66 or over. And this objective justification test is a class based test under the Employment Equality Acts. So really understanding which test applies and having clear procedures in place to deal with both is crucial.

Róisín O’Donoghue
So I think the message is quite clear. Organisations should review their retirement policies now, ensure that they address both scenarios, train their teams on the distinction between the two and review their objective justifications. And by putting these measures in place now before the notifications start to arrive, employers will be in the strongest position to navigate the new regime. And of course, if you have any questions about the legislation, the Code of Practise, or your organisation’s retirement arrangements, please contact a member of the Arthur Cox Employment Law Group or your usual Arthur Cox contact. Thank you for listening today.