This month, the Employment (Contractual Retirement Ages) Bill 2025 was published. It proposes to impose additional requirements on employers where mandatory retirement below state pension age (currently 66) is sought to be enforced on employees. There have also been many successful claims of age discrimination in recent months, and in some cases, these have resulted in orders of reengagement. This briefing considers the steps employers should take now in light of these proposals, and the scrutiny to which any such mandatory retirement ages should be subjected.
Employment (Contractual Retirement Ages) Bill 2025
The Bill introduces a consent-based model to instances of mandatory retirement below the state pension age. The key features are as follows:
- Where an employee is subject to a contractual retirement age which is below the state pension age, they may provide notification to the employer in writing that they "do not consent to retire at the contractual retirement age". The Bill then allows, but does not compel, an employee to seek to stay in employment for any period up to state pension age, including some point between the contractual retirement age and the state pension age. Notification is required to be given not less than three months but not more than one year before the employee reaches the contractual retirement age, or, otherwise, the shorter of a notification period specified by the employer or six months.
- The Bill applies to all employees save those in a probationary period or those whose employment is subject to a maximum retirement age or service limit required by law. The Bill is expressed only to apply to such ages as are "specified in" the contract of employment, noting that such a contract may be express or implied.
- Where an employer receives a notification, it cannot proceed to enforce the contractual retirement age unless the retirement of the employee at the contractual retirement age is "objectively and reasonably justified by a legitimate aim" and that the means of achieving that aim are "appropriate and necessary." The employer must provide the employee with a written reasoned reply within one month of the notification. Failure to do so is a criminal offence for which not only a body corporate, but individual officers and managers who consent or connive in that offence, can be liable.
- The Bill states that an employer in receipt of a notification from an employee cannot enforce their contractual retirement age "unless the retirement of the employee concerned at his or her contractual retirement age is objectively and reasonably justified". It is unclear if an individualised assessment of the justification for the retirement age of a specific employee or role is intended by this statutory language. While no provision is made for an appeal of an employer's decision, an employee may make a notification to an employer twice in any six-month period.
- The Bill protects employees from being penalised as a result of exercising their right to notify their employer of their intention to continue working beyond the contractual retirement age.
- Employees have redress options before the WRC regarding non-compliance with the Bill, including where there is no reasoned written response from an employer; where the contractual retirement age has not been objectively and reasonably justified by a legitimate aim; or where an employee alleges penalisation. Potential remedies include reinstatement, reengagement, or an award of compensation as is considered just and equitable, of up to the greater of 104 weeks' remuneration or €40,000. There are provisions preventing double recovery under the Bill and under the Employment Equality Act 1998.
The Bill, having just been published, is in its infancy and further refinement, and clarification, can be expected. However, in increasing the level of employee choice regarding the planning and management of retirement, it represents a significant development in managing mandatory retirement for organisations whose retirement age is below the state pension age of 66. Employers whose mandatory retirement age is below the state pension age in particular should scrutinise the objective justification that mandatory retirement age now, and prepare to update relevant policies on longer working, in anticipation of the Bill becoming law.
Recent case law developments
The publication of the Bill follows the judgment of the Supreme Court of Mallon v Minister for Justice [2024] IESC 20. The key point of clarification from that case was that an employer is not required to justify the application of a general retirement age to an individual employee or role. Once the employer's aims are legitimate, and the measure is proportionate, application of a mandatory retirement age rule will not offend the prohibition on age discrimination even though it does not entail an individual assessment of those subject to the rule. The Supreme Court did note there may be exceptions to this general principle, for example, in the context of lower-than-normal retirement ages specific to a particular occupation (using the example of airline pilots).
The impact of the Mallon judgment can observed among recent WRC cases. For instance, in Reilly v Meath County Council (ADJ-00050118), a firefighter alleged age discrimination arising from the refusal of his request to postpone his retirement at the age of sixty. The mandatory retirement age was found not to offend the prohibition on age discrimination as it was objectively justified and had been applied consistently to firefighters by the Respondent. While the Complainant placed significant emphasis on his own physical fitness and the fact that he had not been individually assessed, the WRC stated that the avoidance of an individual capacity assessment is a legitimate aim in favour of justifying a general retirement age. Similarly, in Quinn v An Garda Síochána (ADJ-00044613), it was noted by the WRC that "the difference in the activities and career paths between Gardaí and civil servants, despite some overlaps, allowed for different retirement ages even if the same work could be done by either." The Code of Practice on Longer Working remains influential in claims of age discrimination.
Nevertheless, there have been numerous instances subsequent to the Mallon case whereby mandatory retirement ages have been found to offend the principle against age discrimination. Notably, in Ferrero Ireland Ltd v O'Callaghan (EDA258), an award of compensation was ordered by the Labour Court following a finding of age discrimination, with the court citing insufficient evidence that the employer's health and safety aims were sufficiently compelling to be legitimate aims, having been identified as such only when the employee sought to work beyond the mandatory age. The Labour Court noted that the complainant had not been requested to undergo medical assessment before his request for longer working had been decided, nor had one been suggested to him.
Separately, in Ronan v Commissioner of An Garda Síochána, the WRC had ordered that an employee be re-engaged on foot of a finding of age discrimination. In doing so, the WRC quoted the Mallon case in which the Supreme Court had stated that "a significant factor in assessing whether a mandatory retirement rule is 'appropriate and necessary' will be the financial impact on the persons involved and whether it will result in undue hardship to them". In that context, the extent of an employee's pension provision is a factor, as is the possibility of continuing on in employment, whether on a fixed-term basis or by pursuing other employment. In the Ronan case, the WRC determined that, despite being beyond the state pension age, the complainant would not have "adequate income" following his mandatory retirement (based on certain economic data regarding income adequacy) and was "highly likely to experience financial hardship" which would not be significantly offset by his modest occupational pension benefit, such that his retirement at the age of 70 was found not to be proportionate. This case is under appeal to the Labour Court. The High Court has also refused an application for an injunction requiring the implementation of the WRC decision pending appeal, noting that WRC determinations may only be enforced by the District Court and cannot be enforced pending an appeal.
Concluding remarks
Since January 2024, employees who remain in work up to the age of 70 may defer their state pension (contributory) which may improve their pension provision. Together with the Bill, this might reflect a general policy in favour of longer working at the employee's election.
While the Mallon case might have been considered by some to have severely restricted the likelihood of successful claims of age discrimination in cases of mandatory retirement, recent cases demonstrate the ongoing potential risk to employers in such claims. Employers should continue to be scrupulous in ensuring that there is an appropriate contractual basis for any mandatory retirement age, that the objective justification for the age has been appropriately stress-tested, and that applications to remain in work beyond the mandatory age are addressed in accordance with the Code of Practice on Longer Working.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
