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New legislation designed to support employees who wish to remain in work beyond their contractual retirement age has formally entered the statute books, although key guidance on how it will operate in practice has yet to be published.

The Employment (Contractual Retirement Ages) Act 2025 was signed into law on 16 December and introduces a new employment right. It allows employees to seek to continue working until age 66, which aligns with the current qualifying age for the State pension, even where their contract specifies an earlier retirement age. The law permits this option but does not require employees to remain in work.

While the Act is now law, it cannot take effect until a formal commencement order is made. No confirmed start date has been announced, although employers are being advised to prepare in advance rather than wait for the final trigger.

What the new law changes

Many employment contracts in Ireland still specify a retirement age of 65 or, in some cases, younger. Under the new framework, employees who wish to work beyond that contractual age will be able to notify their employer of their intention, provided they do so at least three months and no more than one year before their planned retirement date.

This marks a shift in how retirement is approached, although it stops short of creating an automatic right to stay on indefinitely.

Employer responses and objective justification

Employers will be required to respond to such requests within one month and must do so in writing. If a request is refused, the employer must clearly set out the reasons for that decision.

Those reasons must be objectively justified, linked to a legitimate business aim, and proportionate in how that aim is achieved. Historically, case law has accepted broad organisational grounds such as health and safety, succession planning or workforce planning as valid justifications.

What remains uncertain is whether those justifications will now need to be assessed on a more individual basis. If an employee can demonstrate they are fit and capable of continuing in their role, employers may be expected to justify refusal with reference to that specific employee rather than relying on general policy arguments. This raises the bar for decision-making and may increase the risk of disputes if refusals are poorly reasoned or inconsistently applied.

Awaited code of practice

Further clarity is expected through an accompanying code of practice, which has yet to be published. This guidance is widely seen as critical for helping employers understand what will and will not constitute objective justification under the new law, and how requests should be assessed and documented.

Until that code is available, there is a risk that employers either take an overly cautious approach or proceed on assumptions that later prove unsustainable.

Timing and next steps

The Act will only come into force once a commencement order is made by the Minister. While no fixed date has been set, indications suggest this is likely later in the year, with a lead-in period promised to allow employers and employees time to adjust.

The Department of Enterprise, Tourism and Employment has confirmed it is working with the Workplace Relations Commission to develop clear communications on the new rights and obligations. The stated aim is to ensure the legislation is introduced in a consistent and fair manner once all preparatory work is complete.

For employers, the absence of final guidance means preparation now should focus on reviewing retirement policies, documenting objective criteria, and considering how individual assessments may be handled in practice, rather than assuming existing approaches will remain sufficient.

Disclaimer: This article is based on publicly available information and is intended for general guidance only. While every effort has been made to ensure accuracy at the time of publication, details may change and errors may occur. This content does not constitute financial, legal or professional advice. Readers should seek appropriate professional guidance before making decisions. Neither the publisher nor the authors accept liability for any loss arising from reliance on this material.