The change in policy will create new rights for employees looking to stay in their careers for longer, as well as bring in new legal and operational obligations for employers.
This past week (commencing 29 June), the Department of Enterprise, Tourism and Employment brought into effect the Employment (Contractual Retirement Ages) Act 2025, which introduces significant new rights for employees in Ireland and also places new legal restrictions and responsibilities on employers.
The new rules mean that eligible employees, who wish to do so, can now choose to remain employed at their place of work for a period of time beyond their contractual retirement age, where that age is below the State Pension age of 66.
The eligible employee can retire as scheduled if that is their choice and if they elect to stay on, they must formally notify their employer of their plans at least three to six months in advance.
The employer will be expected to consider any notification made under the new act and if they intend to compel retirement at a certain age, there are criteria to be met – namely, they have to respond to a notification within one month, clearly establish the basis for the decision and ensure that it is in line with the higher legal threshold set out in the act.
In support of the new act, the Minister of State for Small Businesses, Retail and Employment Alan Dillon, TD has signed into law an updated Code of Practice on Longer Working, which was developed by the Workplace Relations Commission and is now also in full effect.
Successful complaints around the new legislation brought by an employee through the Workplace Relations Commission could be awarded up to two years’ remuneration or €40,000, depending on which figure is higher.
On the employer’s side, a failure to provide a reasonable response to retirement notifications may constitute a criminal offence and is punishable by a Class A fine of up to €5,000 or imprisonment for up to 12 months.
Golden years
Commenting on the recent change in policy, Ruadhri McGarry, an associate director at IT Search and a DevOps, cloud and cybersecurity specialist recruiter, explained that the right to request a later retirement date will also give older employees additional reassurances.
McGarry told SiliconRepublic.com, “It removes two specific worries. Financially, they can work at full pay for another year and continue pension contributions accordingly, and professionally, not everyone wants to retire – and so many people within the STEM community are deeply passionate about their work.”
It is an opportunity that he believes many people operating in the STEM space are going to take advantage of, particularly as he has noticed an increase in retirement-age professionals extending their tenure as they are still more than capable of producing exceptional work. In many cases they might pivot to consulting work to supplement income, but more often, in his opinion, it is about personal happiness and not feeling that they need to retire based on a calendar.
He said, “We all need a sense of purpose and if any professional can contribute their decades of experience and drive, there is no real reason for them to stop.”
Turning challenge into opportunity
In the wake of the new rules, there may also be an opportunity for organisations to further capitalise on the expertise of employees reaching retirement age.
McGarry said, “From a big-picture perspective, that is an entire additional year, or more, that can add to the industrial body of knowledge.”
He added: “I fully expect employers to use this legislation and subsequent to maximise knowledge transfer across the generations, utilising senior employees to bring new focus to mentoring, project leadership and expertise retention.
“Any legislative change that offers more choice to employees is always welcome, and those that choose to extend their careers for whatever reason will no doubt add a small but significant layer of experience to an entire sector.”
Addressing concerns that extending the tenure of older employees may limit opportunities for early-career starters or younger workers, McGarry is of the opinion that organisations will be clever in how they spend the remaining time with the established workforce.
“I expect that when this change in legislation kicks in, firms will utilise that year to focus on knowledge transfer from technical staff approaching this new retirement date, giving a new focus for their final year,” he said.
“The limiting of opportunities for career starters would be minimal and more than offset by having additional time to learn from those at the end of their professional journey.”
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