A new law that was passed at the end of 2025 will change how employers deal with contractual retirement ages of 65 or under. While the legislation has not yet come into force, it will require employers to take a more considered approach where an employee wishes to continue working beyond their contractual retirement age, up to the State Pension age (currently 66).

Mandatory retirement has not been abolished, but employers will now need stronger justification before enforcing it.

Who Does the Legislation Apply To?

The Act applies to employees who have completed probation and whose contract specifies a retirement age below the State Pension age. It will not apply where a retirement age is set by law, such as in certain safety-critical roles, or where a maximum service limit applies.

Employees can still retire earlier if they wish. However, where an employee indicates that they want to remain in employment, employers can no longer rely solely on the wording of the contract.

Requests to Work Longer – What Employers Must Do

If an employee does not wish to retire at their contractual retirement age, they must notify their employer in writing between three months and one year before that date. Employers may require up to six months’ notice.

Once notified, the employer must issue a written and reasoned response within one month. This response must clearly explain why retiring the employee at that age is objectively justified and why it is appropriate and necessary in that individual case.

If the employer cannot provide this justification, the employee may remain in employment until an agreed date or the State Pension age, whichever comes first.

Key Risks Employers Should Be Aware Of

Employees are protected from any form of penalisation for making a request to work longer, including any negative treatment that affects their terms, conditions or working environment. Where concerns arise, employees may bring a complaint to the Workplace Relations Commission (WRC), which has the power to investigate how the request was handled.

The WRC may order reinstatement or re-engagement of the employee, or award compensation of up to €40,000 or two years’ remuneration, whichever is greater. Importantly for employers, a failure to provide a reasoned written response without reasonable cause may also constitute a criminal offence. This carries potential fines, imprisonment and, in some cases, personal liability for company directors or senior officers.