New Law Gives Workers Right to Stay on Beyond Retirement Age Starting 29 June

New retirement age rights for employees will come into effect on Monday 29 June, following a Government decision aimed at giving workers greater flexibility to remain in employment beyond their contractual retirement age.

The new legislation applies to employees whose contractually set retirement age is below the State pension age of 66. It is expected to affect thousands of workers who are currently required to retire at 65, leaving a one-year gap before they become eligible for the State pension.

Under the updated rules, eligible employees will have the right to choose to continue working for an additional year, effectively allowing them to stay in employment until they reach pension age. The change does not impose any obligation on workers to remain in their roles but provides them with the option to do so.

Workers who wish to avail of the new right must formally notify their employer, giving at least three months’ notice and no more than 12 months before their intended retirement date. Employers are then required to consider the request and respond in writing within one month if they intend to proceed with a compulsory retirement.

Any decision to enforce retirement must meet a higher legal standard. Employers are required to demonstrate that the retirement is objectively and reasonably justified by a legitimate aim, and that the measure taken is appropriate and necessary.

The rules do not apply where the retirement age is set at 66 or above, or in sectors where retirement is governed by law, including An Garda Síochána and the Defence Forces. Most public and civil servants already have a higher retirement age of 70, following changes introduced in 2018.

Minister for Enterprise, Tourism and Employment Peter Burke said the legislation offers workers more choice and flexibility, allowing them to remain in employment until State pension age if they wish.

To support the implementation of the new framework, the Workplace Relations Commission (WRC) has issued an updated Code of Practice on Longer Working. While not legally binding, the code can be used as evidence in legal proceedings.

Employees who believe their rights have been breached may bring a claim before the WRC. Where complaints are upheld, the Commission has the authority to order corrective action or award compensation of up to 104 weeks’ pay or €40,000, whichever is greater. Employers found in breach of the rules may also face fines of up to €5,000, imprisonment of up to 12 months, or both.

WRC Director General Audrey Cahill said the updated code is intended to assist both employers and employees in applying the new rights, particularly for those aged 66 and over who wish to continue working.

The Irish Congress of Trade Unions (ICTU) has welcomed the change, describing it as a positive step for workers and the wider economy. General Secretary Owen Reidy said restricting mandatory retirement practices is beneficial in the context of a tight labour market and an ageing population, while also supporting the sustainability of public finances.