– by Joe Redmond, HR Consultant at Insight HR
Working Longer in Ireland: What Every Employer Needs to Know About the Employment (Contractual Retirement Ages) Act 2025
The Employment (Contractual Retirement Ages) Act 2025 represents one of the most significant developments in Irish employment law in over a decade. While the legislation has received considerable attention for giving employees the right to request to remain in employment beyond their contractual retirement age, its wider significance lies in the way it reshapes workforce planning, retirement management and employer decision-making.
Mandatory retirement has not been abolished. However, employers who operate contractual retirement ages below the State Pension Age (66) must now navigate a new statutory process before requiring an employee to retire. Combined with the revised Workplace Relations Commission (WRC) Code of Practice on Longer Working, the legislation places a clear emphasis on transparency, consultation, objective justification and procedural fairness.
For employers, this is no longer simply an HR issue. It is a governance issue, a workforce planning issue and a legal risk issue.
For employees approaching retirement this is a deeply personal experience, and there is no single pathway that reflects everyone’s circumstances. While some employees look forward to retirement as an opportunity to pursue hobbies, spend more time with family, or simply enjoy a slower pace of life, others may feel they are entering one of the most fulfilling stages of their career. Many people in their sixties and seventies remain healthy, motivated, and eager to continue making meaningful contributions in the workplace.
For example, a 66-year-old nurse may still find immense satisfaction in caring for patients and mentoring newly qualified colleagues, while preferring to reduce night shifts rather than retire completely. A university lecturer may be passionate about teaching and research and wish to continue supervising students well beyond the traditional retirement age. An engineer with decades of specialist knowledge may want to remain involved as a consultant or mentor, helping to develop the next generation of professionals while working fewer hours.
Equally, there are employees whose priorities change as they approach retirement. A manufacturing employee who has spent forty years in physically demanding work may be looking forward to retirement because of the physical impact of the job. Another employee may wish to retire to care for an ageing spouse, support grandchildren, or pursue long-delayed personal ambitions such as travelling or volunteering. Others may want to continue working, not only because they enjoy their role, but because of financial commitments or concerns about pension adequacy.
There are also those who fall somewhere in between. Because these experiences vary so widely, assumptions based on age can be damaging. Asking someone, “When are you planning to retire?” may be interpreted as suggesting they are no longer valued or that their age is influencing perceptions of their capability. Instead, conversations should focus on future career plans, personal goals, and the support available to help employees make choices that are right for them.
Sensitivity is therefore essential. Discussions about later-career planning should take place in an atmosphere of trust and respect, where employees feel they have control over the conversation. Questions such as, “How do you see your career developing over the next few years?”, “Are there any changes to your role or working pattern that would better support your future plans?”, or “How can we help you achieve your goals?” are more inclusive and encourage open dialogue without making assumptions about retirement intentions.
For most employees, these conversations begin with their line manager. Managers therefore play a crucial role in shaping employees’ experiences, yet many may feel uncertain about how to approach discussions on retirement because of concerns about age discrimination or simply a lack of confidence. Without appropriate guidance, some managers may avoid the conversation altogether, while others may unintentionally ask questions that employees perceive as insensitive.
Organisations have an important responsibility to equip managers with the knowledge, confidence, and communication skills needed to navigate these discussions effectively. Training should cover age-inclusive communication, legal considerations, flexible working options, phased retirement arrangements, and the importance of focusing on the individual’s aspirations rather than assumptions linked to age. When managers are supported to have thoughtful, respectful conversations, employees are more likely to feel valued, organisations can retain critical knowledge and experience, and workforce planning becomes more effective and person-centred.
Those organisations that prepare now will be best placed to minimise disputes, retain valuable talent and demonstrate compliance.
Why does this legislation matter?
Ireland’s workforce is changing. Longer life expectancy, an ageing population, persistent skills shortages and evolving attitudes towards retirement mean that many employees are choosing or needing to work beyond traditional retirement ages.
Historically, many employment contracts provided for retirement at age 65. Although employers were already required under the Employment Equality Acts to objectively justify mandatory retirement ages, retirement often remained a largely administrative process.
The Employment (Contractual Retirement Ages) Act 2025 fundamentally changes that position.
Instead of retirement occurring automatically at a contractual age, eligible employees now have a statutory right to notify their employer that they do not consent to retiring before reaching the State Pension Age. Employers must then actively engage with that notification, consider it carefully and provide a reasoned written response.
The legislation therefore shifts retirement from being an automatic contractual event to a structured legal process.
Understanding the new statutory framework
The Act applies where:
- An employee has a contractual retirement age;
- That retirement age is below the State Pension Age; and
- The employee wishes to continue working until reaching State Pension Age.
An employee who does not consent to retiring at the contractual retirement age may serve formal notice on the employer within the statutory timeframe. This must be done between 3 to 12 months before their contractual retirement date, or according to their contract’s notice period (up to a max of 6 months).
Once that notification has been received, employers must carefully consider whether they intend to:
- Permit the employee to remain in employment; or
- Require retirement in accordance with the contractual retirement age.
If retirement is to proceed, the employer must communicate its decision in writing, together with the reasons supporting that decision.
This procedural obligation significantly increases the importance of documented decision-making.
Mandatory retirement is still lawful but more difficult to defend
One of the most common misconceptions surrounding the Act is that it abolishes mandatory retirement. It does not.
Employers remain entitled to operate contractual retirement ages where they can demonstrate that doing so pursues a legitimate aim and that the chosen retirement age is proportionate.
However, the burden of demonstrating that justification now becomes much more visible. Simply, pointing to a contractual clause will rarely be enough.
Instead, employers should be prepared to demonstrate why retirement at that age remains necessary in the circumstances.
Objective justification: the legal test remains central
The concept of objective justification has existed within Irish equality law for many years.
The legislation does not replace that test it reinforces its importance.
Common examples of legitimate aims may include:
- workforce planning;
- succession planning;
- creating promotion opportunities;
- maintaining a balanced age profile;
- preserving employee dignity;
- ensuring health and safety;
- maintaining operational effectiveness.
However, identifying a legitimate aim is only the first stage.
Employers must also demonstrate that contractual retirement is:
- appropriate;
- necessary; and
- proportionate.
In practical terms, decision-makers should ask:
- Is retirement at age 65 genuinely required to achieve this objective?
- Could the same outcome be achieved through less restrictive measures?
- If the answer is uncertain, the employer’s position becomes considerably weaker.
The revised WRC Code of Practice
Alongside the legislation, the updated WRC Code of Practice on Longer Working provides detailed practical guidance for employers. Although the Code is not legislation, it is likely to carry significant evidential weight before the Workplace Relations Commission and Labour Court.
The revised Code reinforces several key principles.
- Start conversations early
- Treat requests individually
- Document every stage
Practical implications for HR
The legislation requires many HR & leadership teams to rethink existing retirement procedures. Areas requiring immediate review include:
- Employment contracts
- Retirement policies
- Manager capability
The strategic opportunity
Forward-thinking employers may view the legislation differently. Rather than asking:
“How do we manage requests to work longer?”
they may instead ask:
“How do we benefit from employees who wish to work longer?”
Older workers often bring:
- institutional knowledge;
- technical expertise;
- mentoring capability;
- customer relationships;
- leadership experience.
At a time when many sectors continue to experience recruitment challenges, retaining experienced employees can provide a significant competitive advantage.
A practical compliance checklist
Every employer should consider the following actions.
✔ Review contractual retirement ages.
✔ Update retirement policies.
✔ Review template employment contracts.
✔ Develop standard correspondence.
✔ Train HR and managers.
✔ Identify employees approaching retirement.
✔ Prepare an objective justification framework.
✔ Review succession plans.
✔ Ensure board-level awareness where appropriate.
Common employer mistakes
- Waiting too long
- Assuming contractual clauses are sufficient
- Applying blanket decisions
- Poor record keeping
- Inconsistent treatment
The Employment (Contractual Retirement Ages) Act 2025 reflects broader societal changes rather than simply legal reform. People are living longer, many wish to continue working.
Organisations increasingly need experienced talent. The legislation therefore encourages employers to move beyond traditional retirement models towards more flexible workforce planning.
For some organisations this may involve retaining experienced employees. For others it may mean introducing phased retirement, mentoring roles or flexible working arrangements.
Whatever approach is adopted, employers should ensure that retirement decisions are transparent, evidence-based and consistently applied.
In Summary…
The Employment (Contractual Retirement Ages) Act 2025 represents a significant evolution in Irish employment law.
While mandatory retirement remains lawful in appropriate circumstances, employers can no longer rely solely on contractual provisions. Instead, they must demonstrate fair process, meaningful engagement and objective justification.
The revised WRC Code of Practice reinforces this message by placing communication, consultation and documentation at the centre of retirement decision-making.
Organisations that review their contracts, update policies, train managers and prepare for the new statutory process will be well positioned to reduce legal risk while making better strategic use of an increasingly experienced workforce.
The question is no longer whether retirement at a particular age is possible.
The real question is whether the employer can demonstrate that, in the circumstances of the individual employee, it is justified, proportionate and fair.
