The passing of the Contractual Retirement Age Act last December will now restrict mandatory retirement below the age of 66 years, with the following key provisions applying to situations, where an employee has a contractual retirement age (CRA) which is less than the state pension age, which is currently 66 years:

An employee may notify their employer that they do not consent to retire at that age, at least three months, but not less than a year before their scheduled retirement date

The employer must not enforce the CRA of the individual employee concerned, unless it is objectively and reasonably justified by a legitimate aim and the means of achieving that aim are appropriate and necessary.

An employer who, notwithstanding the notification, proposes to enforce the CRA, must give the employee a written reasoned reply within one month of the date of notification.

Penalisation or threat of penalisation of an employee for exercising or proposing to exercise their entitlements is prohibited.

An employee has the right to refer a complaint to the WRC relating to the employer’s non-compliance with the provisions in the legislation. The WRC may award reinstatement, reengagement and/or an award of compensation of up to two years’ remuneration (or €40,000, whichever is greater).

Failure to provide an employee with a reasoned written reply without reasonable cause shall be a criminal offence, that can attract a penalty of up to 12 months imprisonment and/or a fine of up to €5,000, with provision for Company Officers to be held liable, even if offence is committed without their knowledge.

The legislation has not yet commenced, and guidelines are currently being prepared to support the practical application of the Act, but employers should now consider the implications of this legislation against any retirement ages they intend to implement that are below 66 years.