As we approach the end of 2025, we take a moment to reflect on the key employment law developments and market trends that have shaped the year.
There is no doubt but that this year will be remembered for its profound geopolitical and economic disruption, and employers have had to navigate this turbulent environment. Here, we focus on the key employment law themes from 2025 and flag where we anticipate those trends to continue into 2026.
1. Diversity, Equity and Inclusion: where are we at now?
Within days of President Trump taking office in January, we saw the dismantlement of the US federal DEI policy and a seismic shift in the DEI agenda. As a result, international employers were forced to grapple with balancing local expectations and compliance requirements with the pressure to align with the US stance. In practice, we saw organisations in Ireland with strong American ties continue with their DEI strategy, but they chose not to publicise such campaigns. This was a notable shift from the traditional approach of using every opportunity to broadcast an organisation’s DEI commitment as a way of illustrating its corporate culture and values and as a tool to attract and retain key talent.
From a legislative perspective, DEI is still on both the Irish and EU legislative agenda. This year, we saw companies in Ireland with at least 50 employees publish their Gender Pay Gap data for the first time. We also saw the introduction of legally binding requirements in respect of board composition, including that at least 40% of non-executive director roles be held by members of the “underrepresented sex” by 30 June 2026. The aim here is to improve the representation of women on the boards of in-scope companies.
Next year, we will see huge changes being introduced when the EU Pay Transparency is transposed into Irish law. We’ve published a number of insights to get you up to speed on what will be required of you and what steps you can take now to ensure you are ready to comply:
- The Pay Transparency Directive: How can Employers Prepare
- Pay Transparency – New Employee Rights to Pay Information
- The Pay Transparency Directive – Joint Pay Assessments
2. Auto-enrolment: live on 1 January 2026
After a number of false starts, Ireland’s automatic retirement savings system “My Future Fund” will go live on 1 January 2026. Under this system, eligible employees who are not existing members of a qualifying pension scheme or Personal Retirement Savings Account (PRSA) will be enrolled into the new auto-enrolment pension system.
In brief, if an employee is auto-enrolled into My Future Fund the employee and their employer will be required to contribute, with contributions commencing at a rate of 1.5% of gross pay (capped at €80,000), and rising over a 10 year period to 6% each.
An online portal for employers and employees has now been launched, which can be accessed here, and employers are expected to register their details and their payment method to make My Future Fund contributions through this portal prior to year end. Guidance for the registration process is available within the My Future Fund Employer Handbook.
Another important development announced recently was the possible legislative introduction of minimum contribution standards for company pension schemes and personal retirement savings accounts (PRSAs), to take effect from 1 January 2026. In short, where no standards are in place, eligible employees (employees aged between 23 and 60 and earning over €20,000 per annum) would be exempt from My Future Fund if they are in a pension arrangement where any level of employee and / or employer contributions were being made. The Department of Social Protection has said the introduction of minimum contribution standards is being taken in response to some employers enrolling employees into pension schemes with contributions as low as 1%. We understand that regulations to introduce these standards will be published prior to Christmas and will specify that minimum contributions to pension schemes or PRSAs of 3.5% of gross pay (with at least 1.5% paid by the employer) will be needed to exempt an employee. It is important to note that these standards will be based on “gross pay” (which, for example, would include bonuses, commission payments, etc.) rather than basic pay. As and when these standards are introduced, employers will need to carefully consider the details and whether changes are needed to their pension arrangements and employee terms.
3. Mandatory Retirement Ages: what is the current status?
The Employment (Contractual Retirement Ages) Bill 2025 has been passed by both Houses of the Oireachtas, and will now be sent to the President to be signed into law. Once law, a commencement order will be required before the provisions of the Bill take effect.
We looked at the employment and pensions law issues relating to mandatory retirement clauses, including the 2024 Supreme Court decision in Mallon -v- The Minister for Justice and the legislation intending to regulate the use of mandatory retirement clauses in a podcast from earlier this year which is available here. In the new year, we will publish an insight article on what employers need to know now in respect of the new law.
4. European Works Councils: a growing feature of the Irish landscape
Post-Brexit, many organisations relocated their EWCs to Ireland and, as a result, Ireland’s industrial relations landscape expanded significantly overnight, in that there was a new model now in place for employees. As you know, EWCs are bodies designed for the exchange of information and consultation between workers and employers on European transnational matters. Traditionally, such consultation bodies with workers were more of a feature of the European arena, but Brexit reshaped the EWC Irish landscape and they are now an increasingly prominent feature for employees of US multinationals across all sectors in Ireland.
On 11 December, the EWC Directive was published in the EU’s Official Journal, and it will become law on 31 December. This will need to be transposed into Irish law by 31 December 2027 so organisations have effectively two years to come to grips with the new requirements. It is likely that the new Directive will prompt further requests for the establishment of EWCs. To understand these new requirements, please reach out if you would like to join us at one of our information sessions being held in early 2026. We will also share a recording of our next podcast which will cover how to prepare for the new directive whether you have an EWC agreement, a Subsidiary Requirements EWC or don’t have an EWC at all but want to be ready for a request, so watch this space!
In our next podcast, we will also briefly consider the Irish High Court’s recent and first-ever judgment on the operation of EWCs in Charpentier -v- Verizon Ireland Limited. Of particular note is the High Court’s determination on the application of costs. As you know, parties cover their own costs before the WRC and the Labour Court. However, the High Court held that although the Labour Court does not typically have jurisdiction to award costs, this does not mean that it cannot be required to determine a costs application pursuant to Irish legislation that transposes European law. It determined that the Labour Court should have considered whether it could permit the EWC to agree with management that its legal costs be reimbursed on the basis that Irish law provides that EWC members must have the “means required” to apply the rights of the Directive. In failing to do so, the High Court held that the Labour Court had erred in law and so, this matter will require further examination and determination.
5. Data Protection and Employment Law
Continuous Data Subject Access Requests (DSARs) continue to feature prominently for HR and in-house employment lawyers, and we expect this trend to continue into 2026 and beyond. The European Data Protection Board recognised the importance of the right of access by making the issue their enforcement priority in 2024. A key message in the (non-legally binding) EDPB Report is that the right of access to personal data is not absolute, but restrictions on the right apply narrowly.
The take away for employers to note is that the Data Protection Commission (DPC) requires employer controllers to document why it is necessary and proportionate to restrict access to data. As long periods of time may pass between the time when a DSAR is responded to and the time it reaches the DPC, it is important to keep a contemporaneous record of the lawful basis relied on to restrict access.
6. AI and Employment Law
AI capabilities in 2025 reached unprecedented levels of speed and scale, and we expect the same meteoric development to continue into 2026. The legal framework governing AI, the AI Act, came into effect on 1 August 2024. This date marked a watershed moment for global AI governance. Various obligations, many of which have direct implications for all things employment related, are due to take effect in a staggered manner right up to 2027.
The employment related obligations that are in effect right now are:
- AI literacy: in effect since 2 February 2025
- Prohibited AI practices: including emotion recognition biometric identification in the workplace and educational institutions – in effect since 2 February 2025
- General purpose AI rules: in effect since August 2025
- Rules relating to governance and penalties in relation to the provisions of the Act that have already come into force – up to €35 million fines or 7% of global annual turnover (penalties differ depending on infringement): in effect since 2 August 2025
Most other rules relating to high risk AI processing are due to take effect in August 2026. The transition for high risk AI systems that are part of regulated products (like medical devices) ends, in August 2027, and the obligations become fully enforceable.
In 2025, we supported many organisations with their preparation for AI compliance and governance. The EU recognises the significant ask entailed in fit-for-purpose AI compliance. It published simplification measures in a recent omnibus document aimed at making the regulatory burden for companies more manageable. Right now, the implementation dates set out in the AI Act remain. To have meaningful impact, the omnibus must be approved by the European Parliament by August 2026. One take away of interest to HR and employment lawyers is that the omnibus recommends a delayed implementation date for high-risk systems from August 2026 to December 2027 for most Annex 3 obligations (recruitment, credit scoring) and August 2028 for Annex 1 systems (product related systems). More to come….
7. 2025 saw the continued rise of whistleblowing complaints
The Protected Disclosures legislation offers extensive protection for those who report wrongdoings. In short, an employee (or former employee, shareholder, etc.) who alleges that they were dismissed or penalised for having “blown the whistle” can bring a complaint to the WRC or apply to the Circuit Court for interim relief pending the outcome of the WRC complaint.
We considered an interesting whistleblowing case (A Finance Manager -V- A Charity) in a recent podcast where the AO offers valuable insights into assessing whether a communication qualifies as a protected disclosure, and crucially, how to determine if an employee has been penalised for making one. It also sets out some of the key principles from the main protected disclosure caselaw in respect of whether a protected disclosure has been made and how to successfully defend any consequent penalisation claims.
As you can see, a lot has happened in the employment law arena in 2025, and the 2026 horizon looks no different! We will consider what’s coming down the tracks and update you after the holiday season.
Contact Us
For more information on any of the topics detailed above, please contact our Employment, Pensions and Benefits Group or your usual contact at Matheson.