Employment Law – Where We Are Now, and What's Yet to Come

Employment Law –Where We Are Now, and What's Yet to Come

Ireland's employment law landscape is undergoing a period of significant transformation. As we move through 2025, HR professionals and business leaders are navigating a series of legislative reforms and landmark rulings that are reshaping workplace practices, employee rights, and employer obligations. Understanding what's already in force, and what's on the horizon, is essential for staying compliant and future-ready.

The Maternity Protection, Employment Equality and Preservation of Certain Records Act 2024 introduced two significant reforms that are already influencing how employers manage sensitive workplace issues. The first allows employees undergoing serious medical treatment to defer their maternity leave for up to 52 weeks, offering greater flexibility during critical health periods. The second limits the use of non-disclosure agreements in severance arrangements where allegations of discrimination, harassment, or victimisation are present. These changes reflect a legislative shift toward greater openness, fairness, and a more supportive approach to employee rights.

The question of employment status has also been clarified following the Supreme Court's decision in Revenue Commissioners v Karshan Midlands Ltd (Domino's Pizza). The ruling established a five-factor test for determining whether a worker is an employee or an independent contractor, placing greater emphasis on the substance of the working relationship over contractual labels. This has major implications for businesses operating in the gig economy or using platform-based labour, particularly in relation to tax liability and employment protections.

The five questions set out by the Court are:

1. Is there an exchange of remuneration for work?

This establishes whether the arrangement involves payment for labour which is a foundational element of employment.

2. Is the worker providing their own services, rather than those of a third party?

This helps distinguish genuine self-employment from disguised employment.

3. Does the employer exercise sufficient control over the worker?

Control over how, when, and where work is performed is a key indicator of employment.

4. Do the terms of the contract and the actual working arrangements reflect a relationship of employment?

This requires a holistic assessment of the facts, including whether the worker is operating independently or as part of the employer's business.

5. Is there anything in the relevant legislative regime that modifies or supplements this analysis?

This final step ensures that statutory context is considered, particularly in areas like tax or social protection.

This framework has major implications for businesses operating in the gig economy or relying on platform-based labour. It places the onus on employers to assess working relationships with greater precision, particularly in relation to tax liability, employment rights, and access to benefits.

In January 2025, the scope of gender pay gap reporting in Ireland was expanded through the Employment Equality Act 1998 (Section 20A) (Gender Pay Gap Information) (Amendment) Regulations 2025, which lowered the threshold for mandatory reporting from 150 to 50 employees. This change brings a substantial number of small and medium-sized enterprises into the reporting framework for the first time, marking a deliberate policy shift toward broader accountability. Employers must now publish their reports within five months of the June snapshot date, one month earlier than in previous years, placing greater emphasis on timely data collection and strategic communication around pay equity initiatives.

Looking ahead, the most anticipated reform is the launch of Ireland's auto-enrolment pension scheme, set to begin on 1 January 2026. Under the scheme, employees aged 23 to 60 earning €20,000 or more annually will be automatically enrolled in a retirement savings plan unless they are already contributing to a workplace pension. Contributions will be shared between the employee, employer, and the State. While the scheme will be administered by the newly established National Automatic Enrolment Retirement Savings Authority (NAERSA), employers will still need to prepare for the administrative and communication demands that come with implementation.

Another major legislative development now underway is the Employment (Contractual Retirement Ages) Bill 2025, which aims to restrict the enforcement of mandatory retirement ages below the State Pension Age of currently 66. Under the proposed law, employees will have the right to notify their employer that they do not consent to retire at the age specified in their contract if it falls below 66. Employers will be required to respond with a reasoned justification, and failure to comply may result in complaints to the Workplace Relations Commission or even criminal penalties. This Bill represents a fundamental shift in how retirement is approached in Ireland, empowering older workers to remain in employment and challenging long-standing norms around age-based exits.

Further ahead, Ireland is preparing to transpose the EU Pay Transparency Directive, with legislation expected by the June 2026 deadline. The directive will require employers to disclose salary ranges in job advertisements, prohibit questions about applicants' pay history, and mandate joint pay assessments in cases of inequality. These measures aim to eliminate structural pay gaps and promote fairness from recruitment through to career progression.

Taken together, these developments mark a decisive shift in Irish employment law, toward greater clarity, fairness, and accountability. For HR leaders, the challenge is not only to comply but to lead: by embedding these changes into workplace culture, updating policies, and fostering open dialogue across the organisation. The legal landscape is evolving, and those who adapt early will be best positioned to thrive.