Contractual Retirement Ages: A guide for employers

The Employment (Contractual Retirement Ages) Act 2025 comes into force on 29th June 2026. This is a new right for employees whose contracts have a set retirement age of 65 or under to notify their employer that they do not consent to retire.

The Act creates a higher legal threshold if employers propose to enforce the contractual retirement age. So, if you receive a notification, you must consider it carefully and be able to justify the decision if you enforce the contract.

Eligibility

If your employment contracts have a set contractual retirement age of 65 or under, employees who have passed their probation can notify their employer in writing that they do not consent to be retired.

If their retirement age is 66 or higher or set by law (for example, An Garda Síochána, Defence Forces), then they are not eligible for this right. They are still covered by existing employment equality legislation and can seek guidance from the WRC.

The process for employees

Your employees must put in writing that they do not consent to be retired. Templates are available in the WRC Code of Practice.

This should be at least 3 months but not more than one year before their contractual retirement date. If their contract requires a longer notice period than 3 months, they must give either this amount or 6 months' notice, whichever is shorter.

They must also include the legal basis for their notification, as set out in section 5(1) of the Employment (Contractual Retirement Ages) Act 2025.

As the Act applies from 29th June 2026 and there’s a minimum notification period of 3 months, a contractual retirement date of 29th September 2026 is the earliest to which the Act applies.

The process for employers

This new law creates a higher legal threshold if you propose to enforce the contractual retirement age. You must consider any notifications received under the Act. And you cannot require an employee to retire unless you can justify that this decision achieves a legitimate aim.

Reasonable justifications for legitimate aims might include health & safety, succession planning, intergenerational fairness (i.e. promoting a fair and balanced workforce composition). But, this justification must apply to the individual employee and be necessary for the business.

If you decide an employee must retire, you must reply in writing within 1 month. You must explain the reasons for the decision to enforce the contractual retirement age, and objectively and reasonably justify the retirement of the employee concerned by a legitimate aim, and that the means of achieving that aim is appropriate and necessary.

Guidance will be provided in the WRC Code of Practice, as well as a template policy guideline document for a business.

Where you accept an employee’s notification request, arrangements should be made to reflect the employee’s continuation in employment in their contract of employment.

Penalties

For the first time, both corporate body and individuals can be prosecuted for breaches.

If you do not provide an employee with a reasoned written reply within one month of receiving their notification, you may be liable for a fine of up to €5,000, 12 months in prison, or both.

The offences apply to both the body corporate itself and, where proven to have been committed with the consent or connivance of any person, to directors, managers, secretaries or other officers of the body corporate and anyone purporting to act in any such capacity.

How you can prepare

With the Act commencing on 29th June 2026, here’s how to prepare now:

·         Make sure you’re aware of the contractual retirement ages of everyone in your business

·         Update procedures and handbooks to reflect the new procedures

·         Provide training to your managers

·         Make sure you are up to date with guidance on legitimate aims and objective justification

·         Keep your records up to date

You can get up to date and legally compliant templates from BrightBase, the document library from BrightHR.