One who’s stopped working on island (7)
I believe the answer is:
retiree
'one who's stopped working' is the definition.
(someone who has retired from work)
'on island' is the wordplay.
'on' becomes 're' ('on' can be mean 'with reference to').
'island' becomes 'Tiree' (Scottish island).
're'+'tiree'='RETIREE'
(Other definitions for retiree that I've seen before include "One no longer working" , "Someone no longer working" , "One ceasing to work" , "One having completed work" , "One stopping work" .)