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Introduction
The Employment (Contractual Retirement Ages) Bill 2025 (the “Bill”) proposes to introduce several legislative provisions for employees who are obligated to retire upon reaching a certain age based on a term in their contract of employment i.e., the contract retirement age (“CRA”).
The Bill introduces a consent-based approach and new statutory offences for individuals and / or companies who are in breach.
Consent
In accordance with Section 5 of the Bill, where an employee is subject to a contractual clause mandating that they retire from their role before they reach the pensionable age (the current pensionable age is 66), and they are not in agreement with such a clause, they must send written notification to their employer affirming their opposition to the clause. This notification must be sent:
Not less than 3 months, but not more than one year before the employee reaches the CRA
No less than the specified notification period or 6 months (whichever is shorter) where the employer notification period is greater than 3 months
These provisions within the Bill apply to contracts containing mandatory CRAs that are below the pensionable age and extend to all such clauses regardless of whether they are implied or express contractual terms. However, it should be noted the Bill is not applicable to employees still serving a probationary period or to those whose employment is subject to a maximum retirement age, or maximum service limited, as may be required by law.
Notification to Employer and their Obligations under the Bill
Where an employee has given notice to their employer in accordance with the Bill, Section 5 obliges the employer:
Not to enforce the CRA before providing a ‘reasoned written reply’ in response to the employee
Not to retire the employee before a date to which the employee consents, or until the employee reaches pensionable age, whichever occurs first
It should be noted employees may not provide notification to their employer more than twice in any 6-month period.
When the employer has received the notification, they are obliged to:
Provide an objective reason for the CRA which must be capable of being justified as a legitimate aim by the employer
Be able to prove the means of achieving the legitimate aim are appropriate and necessary
When the employer has received the notification, they must provide their ‘reasoned written reply’ outlining their justification for the CRA within 1 month of receipt of the notification. Where an employee wishes to withdraw the notification, they must do so in accordance with the minimum period of notice contained within their contract of employment, or by reference to section 4 of the Minimum Notice and Terms of Employment Act 1973, whichever is shorter.
Parallel Claims
Where the employee has an actionable claim against their employer under both the provisions of the Bill and under the Employment Equality Acts 1998 to 2021, a claim may only be raised in respect of either one or the other, but never both. If an employee were to seek relief in accordance with the Bill, they may not also seek relief under the Employment Equality Acts 1998 to 2021, or vice-versa.
Protection from Penalisation
Section 8 of the Bill forbids penalisation, or any threat of penalisation, by an employer to an employee in response to them exercising, or proposing to exercise, their statutory entitlement to notify the employer of their opposition to the CRA. Under Section 8, any of the below acts or omissions by an employer, or person acting on behalf of the employer, will constitute ‘penalisation’:
Suspension, lay-off or dismissal or the threat of suspension, lay-off or dismissal
Demotion, loss of opportunity for promotion or withholding of promotion
Transfer of duties, change of location of place of work, reduction in wages or changes in working hours
Imposition or administering of any discipline, reprimand or other penalty, including a financial penalty
Coercion, intimidation, harassment or ostracism
Discrimination, disadvantage or unfair treatment
Injury, damage or loss
Threat of reprisal
Withholding of training
Negative performance assessment or employment reference
Referral of Claims to Workplace Relations Commission
Where an employer has failed to comply with their obligations under this Bill, the employee may refer their complaint regarding non-compliance of the employer to the Workplace Relations Commission (“WRC”). The adjudication officer of the WRC may decide to:
Declare the employee’s complaint to be without merit
Mandate the employer take a specific course of action, which may include re-instatement or re-engagement
Require the employer to pay the employee either €40,000 or two-years’ worth of remuneration, whichever is greater
Creation of New Offences
Section 10 of the Bill mandates that is an offence for an employer, without reasonable cause, to fail to provide an employee with a written reply justifying the inclusion of a CRA in the contract of employment. The penalty for such an offence is a class A fine (no more than €5,000) or imprisonment for a term not exceeding 12 months.
An offence may be committed by a person or the company. Where the offence is committed by the company with the ‘consent or connivance’ of a person acting in their capacity as director, manager, secretary, or other officer of the company (or a person purporting to act in such capacity), that person shall be guilty of an offence along with the company. Summary proceedings for an offence under this section are overseen by the WRC and may be issued within 12 months from the date of the offence.
If found guilty of an offence, the guilty party is liable for all costs incurred during the course of the proceedings unless there are ‘special and substantial’ reasons not to make such a costs order. It will be a defence for the accused to prove they exercised ‘due diligence’ and took ‘reasonable precautions’ in attempting to comply with the legislation.
Conclusion
In May 2024, the Supreme Court in the case of Mallon v Minister for Justice provided guidance regarding the enforceability of mandatory retirement ages. The Court in that case found that it was not a requirement for an employer to justify the application of a set retirement age for individual employees, and that provided that its aims are legitimate in holding its employees to a particular retirement age, and it is proportionate, the application of that retirement age will not in itself be discriminatory.
Despite this ruling, and now with the enactment of the Bill, employers need to be careful in ensuring there is an objective justification with a legitimate aim in seeking to hold employees to a contractual retirement age.
Further Information
For further details on Employment law or Contractual Retirement Ages, please contact Partner Marc Fitzgibbon or Solicitor Nikita Kelly in our Employment Team.