Retirement age codes clarify the options for employers, employees

New codes introduced into the Irish workforce have given clear definitions, answering people’s questions around the retirement age choices open to employers and employees.

Employers should review their existing workforce succession strategies in the likely event of more workers wanting to stay in their jobs beyond the retirement date stated in their work contracts.

Employment law experts at the Lewis Silkin firm of solicitors note that newly updated codes governing workplace practices mean that employees in Ireland now have a much stronger legal framework to support their decision to continue working up to age 66, should they so choose, while at the same time they are not obliged to do so.

Joanne Hyde, partner at Lewis Silkin, and Jacqueline Ho, managing knowledge lawyer.

In this Q&A interview, Joanne Hyde, partner at Lewis Silkin, and Jacqueline Ho, managing knowledge lawyer, outline the key details of these latest employment law updates, and explain what these changes will mean to both employers and employees.

What are the key changes contained in the laws governing how contractual retirement ages are managed in Ireland?

The Employment (Contractual Retirement Ages) Act 2025 and the updated Code of Practice on Longer Working introduce a two-track framework:

(i) Employees approaching a contractual retirement age below 66 are covered by the 2025 Act’s new consent-based regime; and 

(ii) Employees aged 66 and over remain subject to the previous request-based procedure which has also been included under the updated Code.

Under the 2025 Act, employees with a contractual retirement age below 66 have a new statutory right to notify their employer that they do not consent to retire at that age.

Crucially, if an employer wishes to reject such a notification, it must justify enforcing the lower retirement age by reference to the individual employee, their role, capabilities and circumstances. Previously, an employer did not have to conduct an individual assessment and it was legitimate for an employer to apply objective justifications that were based on the wider organisation. For example, a health and safety justification may not be applicable to an employee covered by the 2025 Act where that employee is not in a safety-critical role.

The new regime also introduces strict procedural requirements, namely, that employees must give at least three months’ written notice of their non-consent to retirement and employers must provide a reasoned written reply within one month if they wish to reject the employee notification. Failure to do so is a criminal offence, punishable by a fine of up to €5,000, imprisonment for up to 12 months, or both.

The 2025 Act also introduces anti-penalisation protections. Breaches of the legislation may result in reinstatement, re-engagement and/or compensation of up to 104 weeks’ remuneration or €40,000 (whichever is greater).

Employees aged 66 and over remain covered by the age discrimination framework under the Employment Equality Acts 1998–2021. Employees cannot pursue parallel claims under both Acts.

What do the new rules mean for employers and employees in practice?

Employees now have a much stronger statutory mechanism to remain in work up to age 66 although they are not obliged to do so. The effect of this new right is that it will be harder for employers to enforce a retirement age under the State pension age.

Employers wishing to enforce a contractual retirement age below 66 will require an individualised assessment of the employee’s role, capabilities and circumstances rather than reliance on broad justifications such as health and safety. The absence of a standardised retirement age may create operational challenges for employers in workforce management and succession planning.

There are also practical implications for benefits. Employers should check whether pension contributions, health insurance, life assurance and death-in-service benefits can continue beyond the contractual retirement age and whether any conditions or underwriting criteria apply.

For employees aged 66 and over, they may continue to request to work beyond the State pension age but have no statutory right to do so.

What actions should employers should take in relation to these changes?

Employers should revisit succession planning and workforce management strategies to accommodate the likelihood that more employees will wish to remain in employment beyond their contractual retirement date.

Contracts and retirement policies should be updated to reflect the new statutory rights. A clear triage process, documented decision-making and early consultation with affected employees will be important safeguards.

Training is essential for persons who will be handling retirement notifications, particularly on the need for individualised justification under the 2025 Act and the strict one-month deadline for a reasoned written reply.

Is there potential for conflicts, particularly where employees do not consent to retire?

The 2025 Act shifts the power balance by giving employees the right not to consent to retirement below the State pension age, whereas previously employers could grant or refuse extension requests subject to general objective justification. Since justification must now be individualised, disputes may arise where employers consider retirement necessary for succession planning, workforce management or health and safety but cannot demonstrate (or the employee disagrees) that the rationale applies to the particular employee.

Conflict risk is heightened by the newly introduced anti-penalisation protections. Penalisation is broadly defined under the 2025 Act to include dismissal, demotion, suspension, harassment, discrimination or any other detriment to terms and conditions. Any adverse treatment connected to a non-consent notification could give rise to a separate penalisation complaint.

A further source of tension arises with those employees who have retirement dates prior to 29 September 2026 and therefore cannot serve sufficient statutory notice to be covered under the 2025 Act. While the notification period is mandatory under the 2025 Act, we expect that these employees may insist on the 2025 Act applying to their situation and it may ultimately be a matter of interpretation before the Workplace Relations Commission.