Summer 2025 ROI Update

 LEGISLATIVE UPDATE

1. THE EMPLOYMENT (CONTRACTUAL RETIREMENT AGES) BILL 2025

On 1^st April 2025 the Government initiated the Employment (Contractual Retirement Ages) Bill which is intended to introduce a new statutory right enabling employees to remain in employment until they reach the state retirement age, currently 66.

Background

In ROI, less favourable treatment on grounds of age is prohibited. However, employer’s can still impose a mandatory retirement age provided that it is set out in contractual documentation/policy documentation and can be objectively justified.

In Mallon v Minister for Justice [2024], the Supreme Court affirmed the legality of mandatory retirement ages where they are objectively justified—specifically, if they pursue a legitimate aim and the means of achieving that aim is necessary and proportionate. Crucially, the Court held that such retirement ages can be applied to defined groups without the need for individual assessment. This approach can be based on general probabilities regarding age, health, and competence. Although the case involved public sector employment, its reasoning provided guidance and reassurance for private sector employers who implement contractual retirement ages.

The introduction of the Employment (Contractual Retirement Ages) Bill 2025 however appears to be a move away from principles set out in Mallon. This is perhaps influenced by increasingly age diverse workforces and more requests from employees to work beyond normal retirement age, driven in part by lack of sufficient provisions of a private pension fund (apt with the introduction of auto enrolment.)

The Employment (Contractual Retirement Ages) Bill 2025

The Bill introduces a new statutory right allowing employees to remain in employment until they reach the State Pension Age (currently 66), even if their contract specifies an earlier retirement age. It does not compel employees to work longer—it simply removes the employer’s ability to enforce earlier retirement without the employee’s consent.

A summary of key principles of the draft Bill, which has just completed the third stage in Dail Eireann, is set out below.

Key Provisions

• Employees with a contractual retirement age below the State Pension Age can notify their employer that they do not consent to retire at that age.
• This notification must be made at least 3 months and no more than 12 months before the contractual retirement age.
• Employees may issue no more than two notifications in any six-month period.
• Employer must issue written reply within 1 month either agreeing to the request or confirming the operation of the mandatory retirement age remains and the basis for this.
• An Employer who, without reasonable cause, fails to provide an employee with a reasoned written reply will be guilty of an offence and liable on summary conviction to a class A fine (i.e. a fine not exceeding €5,000) or imprisonment for up to 12 months or both.
• The provisions of the draft Bill do not currently apply to probationary employees

Implications for Employers

The Bill signals a shift toward a consent-based retirement framework, demanding greater transparency and justification from employers when enforcing early retirement clauses.

For employers who operate mandatory retirement ages, they should review employment contracts and HR Policies to determine whether such contractual ages can still be justified.

Employers should also consider what impact the introduction of the new rights may have on current succession planning.

2. Pregnancy Loss (Miscellaneous Provisions) Bill 2024

The Pregnancy Loss (Miscellaneous Provisions) Bill 2025 is a Private Member’s Bill and, as of July 2025, is at the Third Stage in Seanad Éireann.

The legislation introduces significant reforms aimed at supporting employees who experience pregnancy loss.

It is intended that the Organisation of Working Time Act 1997 will be amended to provide for Pregnancy Loss Leave.

 Key provisions include:

• Paid Leave Entitlement: Employees who suffer a pregnancy loss (mother and other parent) will be entitled to a period of paid leave, with the intention that this becomes a day-one right.
• Up to 5 days leave with pay for mother experiencing pregnancy loss in a leave year and 2.5 days leave with pay for the parent of the pregnancy which results in a pregnancy loss or still birth.
• The Bill extends protections under the Unfair Dismissals Acts 1977 to 2015, safeguarding employees from dismissal related to pregnancy loss leave.
• The Bill establishes an opt-in register for recording pregnancy loss, which will be closed to public searches.
• Employees shall notify their employer of the intention to take pregnancy loss leave as soon as is reasonably practicable before the employee is due to start work on the day that is intended to be taken as pregnancy loss related leave.  Where it is not reasonably practicable to notify an employer of an intention to take pregnancy loss related leave before the start of the working day of the employee concerned, the employee shall notify the employer as soon as reasonably practicable after the start of that working day.

We will continue to keep Members updated as the Bill makes its way through the legislative process however employers should prepare for compliance by reviewing internal policies and ensuring HR teams are informed of the proposed changes.

Case Law Update

1. Francisco Martin Santano v Enable Ireland Sandymount School (ADJ-00050049)

Case Summary: Unfair Dismissal, Frustration of Contract,

In Francisco Martin Santano v Enable Ireland Sandymount School, the Workplace Relations Commission (WRC) considered a complaint under the Unfair Dismissals Acts 1977–2015. The complainant, Mr. Santano, a Special Needs Assistant, alleged that he was unfairly dismissed following the denial of a career break linked to a housing crisis and a subsequent refusal by the school to re-engage him once his circumstances changed.

This case is significant because it engages with not only the doctrine of contract frustration, rarely invoked in employment disputes, but also the increasing overlap between economic realities—like Ireland’s housing shortage—and employment law.

Background

Mr. Santano began his role in 2019 and, by early 2023, was facing the loss of his accommodation in Dublin after a decade-long tenancy ended. He sought a one-year career break from his employer to relocate temporarily and manage his housing crisis, noting the unaffordability and scarcity of housing in the capital. He was granted an extension to remain in his home until the end of June 2023, enabling him to complete the school year.

However, the school’s Board of Management refused his career break request, citing policy limits on the number of staff who could be on leave simultaneously. These limits were designed to maintain appropriate levels of support for students. The Department of Education acknowledged the refusal but emphasised it was a matter for the Board, though the complainant could appeal.

He did appeal, but the decision was upheld. After moving to Spain due to lack of housing, Mr. Santano remained in contact with the school and notified them in December 2023 that he had secured housing in Dublin and was ready to return by 1 January 2024.

The Respondent’s position  

The Respondent asserted that the Complainant’s employment had ended, not through dismissal, but because the contract had been frustrated. This meant that the employment agreement had ceased due to unforeseen circumstances—his departure from Dublin and inability to return at the beginning of the new academic year—rendering his role effectively terminated.

Given the vital nature of Special Needs Assistant positions, the school argued it was compelled to recruit a replacement before the school year began.

The Data Access Dispute

In addition to the unfair dismissal claim, Mr. Santano raised concerns about his Data Subject Access Request (DSAR). He had sought access to records such as minutes from Board meetings where his situation was discussed. The Respondent did not respond to this request adequately, prompting him to raise a complaint with the Data Protection Commission (DPC). The WRC held that it had no jurisdiction to adjudicate data protection matters, appropriately referring the issue to the DPC.

Decision

Adjudication Officer (AO) Jim Dolan dismissed the unfair dismissal claim, concluding that there had been no dismissal. Instead, he accepted the Respondent’s argument that the employment contract had been frustrated by the employee’s inability to perform his role in Dublin at the start of the school year.

The Adjudicator confirmed frustration occurs when continued performance of the contract becomes radically different from what was originally agreed. The Complainant’s extended absence and subsequent relocation to another country fundamentally altered the employment arrangement.

Regarding the career break denial, the Adjudicator referred to the Department of Education’s circular which grants sole discretion to employers on such matters, emphasising that students’ welfare must take precedence over employee requests. The Board of Management had complied with the relevant procedures and offered the complainant the opportunity to reapply in the future.

Takeaways for Employers

This decision is noteworthy for several reasons:

• Rare Use of Frustration: Employment law rarely relies on contract frustration, but this case shows that extraordinary circumstances—like international relocation and inability to return to work—can satisfy the doctrine’s criteria.
• Policy-Based Discretion Validated: The case affirms that well-established and consistently applied workplace policies—particularly those founded on statutory guidance—can protect employers from claims of unfair dismissal when decisions are made transparently and fairly.
• Impact of Societal Factors: The ruling reflects the growing influence of societal and economic forces (like the housing crisis) on employment relationships. Employers should consider how broader challenges affect their staff and develop supportive, documented procedures in response.
• Documentation and Process Integrity: The employer’s detailed documentation of the decision-making process and their willingness to engage with the employee even after rejecting his request significantly bolstered their legal defence.
• The decision also clarifies that the WRC is not the correct venue to handle data protection grievances, reinforcing the separation between employment and data protection law.

Conclusion

Francisco Martin Santano v Enable Ireland Sandymount School illustrates how legal principles such as contract frustration can intersect with personal hardship and systemic challenges like unaffordable housing. While the WRC ultimately sided with the employer, the decision serves as a valuable guide for balancing operational needs with employee support and fairness.

2. Danica Gutierrez v Cafico Corporate Services Ltd (ADJ-00050330)

Constructive Unfair Dismissal- without prejudice conversation

Ms. Gutierrez, employed as a Senior Client Manager, began her role on 15 August 2022 and resigned on 30 January 2024. The WRC upheld her complaint that she had been constructively unfairly dismissed by the Respondent, having regard to both the contract test and the reasonableness test required for a constructive dismissal under Irish employment law.

Background

The Complainant had been working in her role for a little over a year when, on 26 September 2023, she was unexpectedly placed on a Performance Improvement Plan (PIP) by the company’s Chief Accounting Officer. Gutierrez contended that the plan was imposed without any warning or previous indication of dissatisfaction with her performance. She claimed that the PIP lacked measurable goals, tangible performance indicators, and specific examples of underperformance—making the process vague and ambiguous and that fair procedures were not applied.

She further argued that the employer’s failure to investigate a client complaint against her was unfair.

The employer disputed this account, arguing that the PIP was clearly structured with identifiable benchmarks, review milestones, and a follow-up meeting scheduled for 25 October 2023.

Only three working days after being put on the PIP, Gutierrez was called to another meeting on 3 October 2023, where she was offered an exit package consisting of two months’ notice pay and an ex-gratia payment of €5,000. Notably, her contractual notice period was three months, not two. The details of this meeting were hotly disputed by both parties.

Legal Framework: Constructive Dismissal

The WRC adjudicator, Eileen Campbell, highlighted the legal threshold for a constructive dismissal. Under section 1(b) of the Unfair Dismissals Acts, a resignation may be deemed a constructive dismissal if:

1. The employer’s conduct amounts to a fundamental breach or repudiation of the employment contract (Contract Test); or
2. The employer’s behaviour makes it reasonable for the employee to resign (Reasonableness Test).

These tests were first articulated in the UK case Western Excavating v Sharp [1978] ICR 221 and are commonly applied in Ireland. There’s also a general principle that an employee should give the employer a chance to resolve the situation before resigning, though this wasn’t fatal in this case.

Decision

The adjudicator rejected several of the complainant’s claims, confirming that:

• in commercial relationships, a client has the right to request staff changes and that such a request doesn’t necessarily warrant investigation.
• the high level of procedural protections required in disciplinary actions doesn’t automatically extend to PIPs. Thus, the absence of these safeguards wasn’t enough by itself to amount to constructive dismissal

AO Campbell however did ultimately find that Gutierrez had been unfairly treated in a way that justified her resignation. A crucial factor in this determination was the conduct of the meeting on 3 October 2023.

Although the precise details were contested, both parties agreed that the meeting occurred and that the severance offer was made. The adjudicator called this moment the “defining” incident that irreparably damaged the employment relationship. Offering a severance package just days after initiating a performance improvement process was seen as an act inconsistent with the employer’s contractual obligations and good faith.

She concluded that this act was a serious breach of the employment contract, which would lead any reasonable person to resign, thereby satisfying both the contract and reasonableness tests.

Absence of Grievance Procedure

A significant factor in the decision was the company’s failure to provide a grievance process. Neither the employment contract nor the employee handbook contained a grievance procedure. The adjudicator emphasised that this was a “striking omission” and highlighted the importance of employers complying with S.I. No. 146/2000 – the Code of Practice on Grievance and Disciplinary Procedures. While employees are normally expected to use internal mechanisms before resigning, the lack of such mechanisms in this case meant that Gutierrez’s failure to raise a grievance could not be held against her.

Compensation Award

Gutierrez calculated her financial loss from the dismissal at €48,548.55. However, the adjudicator found that she had not made sufficient efforts to mitigate her loss—for example, by seeking new employment—and awarded her €17,917.50 in compensation.

Takeaways for Employers

• PIPs should be carefully and transparently implemented. Sudden or poorly substantiated PIPs may undermine employer credibility.
• Offering severance packages shortly after initiating a PIP can imply bad faith and damage trust irreparably.
• Employers must have clear and accessible grievance procedures in place. Their absence can seriously undermine an employer’s defence in dismissal cases.
• Exit discussions are not  automatically “without prejudice” and can be admissible in proceedings. Employers must approach such meetings with care.