knowledge 26 June 2026 |

Working Beyond Retirement: New Law Comes Into Effect

The Employment (Contractual Retirement Ages) Act 2025 (the “2025 Act”) takes effect on 29 June 2026, following the very recent publication of an updated Code of Practice on Longer Working (S.I. No. 246 of 2026) (the “Code of Practice”). The 2025 Act amounts to a very real and significant change in how employers deal with employees approaching retirement, and this briefing considers what the new rules will mean in practice.

The effect of the 2025 Act will be to introduce a two-tiered system when considering requests from employees to work beyond retirement. The rules under the 2025 Act, which are more individual to the employee concerned, will apply to any retirement ages below the State pension age (currently 66); the existing employment equality framework will apply to any retirement ages at or beyond it.

When will the new rules apply?

The 2025 Act applies only where an employee is subject to a contractual retirement age below the State pension age and wishes to continue working beyond that age. The 2025 Act does not apply where a maximum retirement age is mandated by statute, such as those applicable to members of the Defence Forces and An Garda Síochána. Provided that the eligible employee has completed any applicable probationary period, they may, under the 2025 Act, notify their employer in writing that they do not consent to retire at their contractual retirement age and wish to remain in employment until the State pension age or an earlier identified date to which they do consent. Such notifications must generally be submitted no later than three months before the contractual retirement date, albeit employers can mandate longer notice periods.

Because a minimum of three months’ notice is required and the 2025 Act will commence on 29 June 2026, the Department of Enterprise, Tourism and Employment has stated that a contractual retirement date of 29 September 2026 is the earliest to which the Act will apply.

The Code of Practice provides practical guidance on the application of the 2025 Act, including template policies, notification forms and certain procedural recommendations for employers and employees. While the Code of Practice is not legally binding, it is admissible in legal proceedings and will serve as a reference point in disputes.

Implications for Employers with Retirement Ages Below 66

For employers who maintain a contractual retirement age below the State pension age, the practical impact of the 2025 Act is significant. Once a valid notification is received, the contractual retirement provision no longer operates automatically. Instead, any employer wishing to compel retirement is required to demonstrate that any such retirement age pursues a legitimate aim through means that are necessary and proportionate. Crucially, the employer must also carry out an individualised assessment of whether the retirement policy’s objectives apply to the particular employee in question and the Code of Practice confirms this. Within one month, the employer must then provide a reasoned written reply setting out the aim being pursued and explaining why retirement at that age remains an appropriate and necessary measure for that individual. Failure to furnish such a written response without reasonable cause amounts to a criminal offence for which directors, managers, secretaries, and other officers who consent to or connive in the commission of the offence can be personally liable.

Where an employee’s request is accepted, or where no adequate objective justification can be demonstrated, the employee’s existing contract of employment continues in force up to the State pension age or such earlier date as the employee consents to. As the Code of Practice notes, for such workers, “they will see no change in the status of their contracts of employment”.

The Two-Track Process

An important feature of the new regime is the introduction of a two-track framework. The requirements where an employee requests to work beyond a contractual retirement age differ materially depending on whether that retirement age is below 66 or not. As the Code of Practice puts it, “the 2025 Act only applies to the employment gap between when an employee reaches the contractual retirement age for their job but has not yet reached the qualifying age for the State pension”.

This distinction is critical, as it affects the rights, procedures and remedies available to employees, and the nature of the assessment that employers must undertake. Employers who operate different retirement ages across their workforce may need to manage both tracks simultaneously.

Track 1: Contractual Retirement Age Below 66 (The 2025 Act)

Where an employee’s contractual retirement age is below the State pension age of 66, the 2025 Act applies. The key distinction is that the assessment of objective justification for retirement by the employer must be an individualised one. In such cases, upon receiving a longer working request, a general policy justification will not suffice. Instead, the employer must demonstrate that retiring the individual concerned, in their specific role and circumstances, is proportionate. For example, if a retirement policy is generally justified by reference to health and safety concerns, the employer must establish that those concerns apply to the retirement of the employee in question, having regard to their role and capabilities.

Remedies under the 2025 Act are significant and can elicit awards of compensation of up to 104 weeks’ remuneration or €40,000 (whichever is greater). The 2025 Act prohibits penalisation of an employee for exercising or proposing to exercise their rights.

Track 2: Contractual Retirement Age at or Above 66

Where an employee’s contractual retirement age is 66 or above, the 2025 Act does not apply and employers can use the existing procedures for longer working requests. Employees who wish to continue working beyond their retirement age are covered by the existing age discrimination framework under the Employment Equality Act 1998 (the “Equality Act”), on which there is guidance in the updated Code of Practice. The latter recommends that employers make a request to work longer no less than three months from the intended retirement date. A follow-up meeting should then take place and the Code requires that the request be “considered carefully” by the employer, including whether there may be flexible working options available, in light of the duration of the extension and the pension implications on the employee.

The justification standard, however, is broader and, while objective justification must be demonstrated, it is not required at an individualised level, provided the age is justified in general. Examples of what might amount to legitimate aims pursued by mandatory retirement ages include intergenerational fairness, health and safety, balanced age structure throughout the workforce, and succession planning. Where an employer does agree to longer working, this is typically having regard solely to the case made by the employee, and is typically on the basis of a fixed-term contract, which must itself be objectively justified. Decisions should be made on fair and objective grounds. Employees may pursue claims of age discrimination under the Equality Act although no criminal penalties arise.

Age Discrimination Risks

Employers should be aware that the 2025 Act and the Equality Act are not mutually exclusive; however, the 2025 Act provides that relief cannot be granted under both the 2025 Act and the Equality Act 1998 in respect of the same conduct. Employers should bear in mind that retirement age policies remain subject to scrutiny under the Equality Acts, irrespective of whether the contractual retirement age falls above or below 66. The Code of Practice recommends that any complaints should be sought to be resolved at local level in the first instance, including through established grievance procedures.

Practical Steps for Employers

With the 2025 Act effective from 29 June 2026, employers should take immediate steps to ensure compliance. These include reviewing contractual retirement age provisions in employment contracts and policies, assessing the business rationale supporting any retirement ages they intend to retain, updating retirement and longer-working procedures, developing clear internal processes for receiving and responding to employee notifications, and ensuring that record-keeping and decision-making processes are robust enough to withstand scrutiny.

For some employers, a key challenge will be to demonstrate that the application of a retirement age can be objectively justified in respect of the individual employee concerned. Employers who operate a retirement age below 66 should consider whether the objective justifications available within their organisation can in fact be sustained on an individualised basis, and should ensure that those who handle requests are trained on the applicable processes, particularly the strict one-month response deadline. Employers will necessarily be mindful that granting requests to work beyond the contractual age can raise murky questions regarding pensions and benefits, on which the Code of Practice is curiously vague.