Stay ahead of the curve with our exclusive Q&A series, brought to you by leading law firm, A&L Goodbody, LLP, designed to answer your most pressing legal questions. These expert insights provide clear guidance to ensure your HR practices remain compliant and protect your organisation.  

In this Q&A, Aoife Brady provides guidance on what to expect...
 

What does the “Employment (Contractual Retirement Ages) Bill 2025” mean for employers with a mandatory contractual retirement age of 65?

The Employment (Contractual Retirement Ages) Bill 2025 published on 1 April 2025 introduces measures that allow, but do not compel, employees to stay in employment until the State pension age, regardless of whether there is a mandatory retirement age in place (the Bill).  
 

When does the Bill come into force?

The Bill is currently not in force as it is making its way through the legislative process. Once the Bill has passed through all Houses of the Oireachtas, it will be signed into law by the President. 
 
What is the current law?

Under existing EU and Irish employment equality law, employers are already prohibited from enforcing mandatory retirement ages (of any age) upon employees unless it can objectively justify the retirement age both by the existence of a legitimate aim and evidence that the contractual retirement age (CRA) is an appropriate and necessary means of achieving that aim.  

In the 2024 Supreme Court decision of Seamus Mallon -v- The Minister for Justice, Ireland, and the Attorney General it was confirmed that there is no general requirement for individual assessment by employers for a mandatory retirement age to be lawful pursuant to the Employment Equality Acts.

What does the Bill say?
 
The Bill applies to situations where an employee has a CRA which is less than the State pensionable age (currently 66) and has completed their probationary period (if any). The Bill only applies to contractual mandatory retirement ages and not those set by statute. 

A key difference introduced by the Bill is the requirement to justify the CRA at the level of the individual employee. Employers will need to be in a position to do this in respect of the retirement of an employee who issues a notification, but where the employer nonetheless wish to enforce the CRA. 

The key provisions of the Bill are as follows: 

• Where an employee has a CRA which is less than the State pensionable age, they may notify their employer that they do not consent to retire at that age. The notification must issue (i) not less than three months, but not more than one year, before the employee will reach the CRA; or (ii) if their contractual notice period is greater than three months, within that timeframe or six months, whichever is shorter. The employee may not issue more than two such notifications in any six-month period.
   
• The employer must not enforce the CRA of the employee concerned unless it is objectively and reasonably justified by a legitimate aim and the means of achieving that aim are appropriate and necessary.
   
• An employer who, notwithstanding the notification, proposes to enforce the CRA, must give the employee a written reasoned reply within one month of the date of notification.
   
• Penalisation or threat of penalisation of an employee for exercising or proposing to exercise their entitlements will be prohibited.
   
• An employee has the right to refer a complaint to the WRC relating to the employer’s non-compliance with the provisions in the Bill. The WRC may award reinstatement, reengagement and/or an award of compensation of up to two years’ remuneration (or €40,000, whichever is greater). The WRC’s decision may be appealed to the Labour Court.
   
• In circumstances of non-compliance by the employer, relief may not be granted under both the Bill and the Employment Equality Acts.
   
• Significantly, the Bill provides that an employer who, without reasonable cause, fails to provide a reasoned reply may be guilty of a criminal offence.  

Impact for employers

Where employers wish to rely on a CRA which is below 66 they will need to be prepared to document employee notifications and ensure reasoned replies issue within one month. They will need to be prepared to demonstrate the CRA is objectively and reasonably justified by a legitimate aim and that it is appropriate and necessary to achieve that aim. 
In situations where there is a CRA of 66 or above, the provisions of the Bill will not apply and there will be no requirement to receive employee notifications and provide written reasoned replies. Employers may therefore wish to give thorough consideration and weigh up the pros and cons of increasing any CRAs, which are below the State pensionable age of 66, while bearing in mind that the Employment Equality Acts still apply irrespective of the age set as the CRA. 

Takeaways

The effect of the proposed legislation for employers, is that there will be more risk when enforcing mandatory retirement ages below the age of 66. It is very probable that more employees will question or challenge situations where their employer is requiring them to retire before the State pensionable age where they seek to remain in employment.

While some employees may be pleased to embark on a new stage of life on reaching a mandatory retirement age after many years in the workforce, employees have demonstrated an increasing appetite to remain working beyond what would have been regarded as the traditional retirement age of 65 as we have seen by the high volume of age-based discrimination claims filed with the WRC under the Employment Equality Acts in recent years.   

This trend is expected to continue as average life expectancy increases and employees reflect on whether they have made adequate pension provision to fund their retirement.

Ahead of the enactment of the Bill, it would be prudent for employers to consider what policies and guidelines it will need to put in place for managers and Human Resources on how to handle requests to work beyond the mandatory retirement age once the Bill comes into force. On a broader note, it may be worth considering increasing the company mandatory retirement age, at least to bring it in line with the State Pension Age. 

The Bill has completed Dáil Éireann, First Stage. 

For further information in relation to this topic, please contact Aoife Brady, Solicitor or any member of the ALG Employment team.