Code of practice awaited for new retirement law
New legislation that aims to support employees who wish to work beyond their contractual retirement age was signed into law last month.
The Employment (Contractual Retirement Ages) Act 2025 became law after being signed by the President on 16 December.
By introducing a new employment right, the legislation allows, but does not compel, workers to remain in their job until age 66, in line with the qualifying age for the State pension.
No date has been set for the commencement order, but employers being advised to prepare ahead of the formal commencement of the Act.
What's changing?
The state retirement age is currently 66, however a lot of employers will have a contractual retirement age which is typically 65 years of age, or in some cases even lower than that.
This legislation is going to going to facilitate people who want to work past their contractual retirement age, according to Joanne Hyde, partner at international law firm Lewis Silkin in Ireland.
"It will allow employees to decline to retire at the contractual reporting age by notifying their employer at least three months, but less than a year before the scheduled retirement age," she explained.
Can employers refuse a request to work beyond a contractual retirement age?
An employer must respond to that request within one month and must respond in writing giving their reasons for declining.
The reasons must be objective and reasonably justified by an employers legitimate aim and the means of achieving that aim must be proportionate.
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"What is unclear, up until now, and this has been established by case law, that objective justification could be an organisational justification, for example, health and safety at a general level or succession planning, organisational age balance," Ms Hyde said.
"But there's been comments as this legislation was being introduced that the objective justification will have to be specific to the employee who is applying to work longer," she said.
"If f you imagine health and safety as a general objective justification, It may now be that an employee who's saying, well, I'm fit and healthy, even though I'm 65, that the employer will have to objectively justify it by reference to the individual," she added.
Will there be more clarification on what is an objective justification?
An anticipated code of practice to accompany the legislation is expected to be published, which would give more clarity on what is an objective justification for refusing work beyond a contractual retirement age
Ms Hyde is optimistic this will be available in the coming months as she says it is critical for understanding more about employers responsibilities in this area.
When will the new law kick in?
The new legislation can only begin after a commencement order, a decision made by the Minister.
No specific date has been set for this decision, although there is a loose time frame for "later this year."
A spokesperson for the department of Enterprise, Tourism and Employment said that the Minister has said in the course of the legislative process there will be an appropriate lead in time in advance of commencement.
They said the department will continue working with the Workplace Relations Commission (WRC) to develop clear communications for both workers and employers on the rights and responsibilities arising from this Act.
Once this necessary work is complete, this will support a smooth commencement later this year and ensure that the new right is implemented consistently and fairly, according to the spokesperson.
