A significant shift in retirement policy is on the horizon, as new legislation designed to empower employees wishing to extend their careers beyond the standard retirement age has recently been enacted. Signed into law by the President on December 16, 2025, the Employment (Contractual Retirement Ages) Act 2025 introduces a pivotal employment right that permits—though does not mandate—workers to remain in their jobs up to the age of 66, which aligns with the eligibility for the State pension.
While the exact date for the implementation of this law has yet to be determined, employers are encouraged to begin preparations in anticipation of its formal launch.
What’s Changing in Retirement Practices?
Currently, the official retirement age stands at 66, but many companies maintain a contractual retirement age, often set at 65 or even younger. This new law aims to provide robust support for individuals eager to continue working past their designated retirement age. Joanne Hyde, a partner at the international law firm Lewis Silkin in Ireland, elaborated on the implications: "This legislation enables employees to opt out of retiring at their contractual age, provided they notify their employer between three months and one year prior to their planned retirement."
Can Employers Deny Requests to Work Longer?
Employers are indeed allowed to deny such requests; however, they are required to respond within one month, delivering their rationale in written form. This reasoning must be based on objective criteria and should align with a legitimate business aim, ensuring that the methods used to achieve this aim are proportionate.
"What remains somewhat ambiguous—clarified through case law—is that acceptable objective justification can include organizational factors like general health and safety or considerations around succession planning and age balance within the organization," Ms. Hyde noted. "However, there have been discussions suggesting that any objective justification must now be tailored specifically to the individual employee requesting an extension."
To illustrate, if a company cites health and safety concerns as a general reason for not allowing an employee to work longer, they may have to provide specific evidence showing that the individual in question, despite being 65 years old, is not fit for continued employment.
Will There Be Further Clarification on Objective Justification?
An upcoming code of practice, expected to accompany this new legislation, aims to clarify what constitutes an objective justification for denying a request to work beyond the contractual retirement age. Ms. Hyde is hopeful that this guidance will be released shortly, as it is essential for elucidating employer responsibilities in this domain.
When Will This New Law Take Effect?
The new provisions can only take effect following a commencement order, which will be issued by the Minister responsible. Although no specific timeline for this decision has been established, there is a tentative expectation that it will occur later this year. A spokesperson from the Department of Enterprise, Tourism, and Employment indicated that throughout the legislative process, the Minister has committed to providing adequate lead time before the law takes effect.
Furthermore, the department will collaborate with the Workplace Relations Commission (WRC) to create clear communication materials aimed at educating both workers and employers about their rights and responsibilities under this new Act. Once these preparations are finalized, they will facilitate a smooth rollout of the new regulations, ensuring consistency and fairness in its implementation.
