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Extension of flexibility 'may help solve retirement problems'

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Comment The Government has restated its plans to extend the right to request flexible working to all employees. Rather than resist the change, though, employers could see it as a chance to help deal with another issue – the removal of the retirement age.

Workers approaching 65 might well use flexible working requests to cut down their hours while holding on to some of their job. If this happens, employers should grasp the opportunity to reduce reliance on older workers using the formal flexible working process in a way that will help avoid age discrimination claims.

Deputy Prime Minister Nick Clegg said this week that the Government wanted to give fathers more opportunity to change their working patterns so that they can participate more fully in family life.

The Government took the opportunity to repeat its pledge to extend the right to request flexible working to all employees. But while companies might initially oppose that move, it could provide the opportunity to compromise on the Government's other recent employment law announcement.

The Government said last week that it would go ahead with plans to scrap the default retirement age, removing the right of companies to force workers to retire at 65.

Business groups have argued against the change, claiming that they should be allow to manage older workers into retirement, but the Government stood its ground, arguing that people are living longer and staying active for longer, and that many want to work past 65.

For businesses with older workers on the pay roll, the two planned changes could work together.

Whether for health reasons, to stay active or out of economic necessity, many older workers do not want to retire at 65, and the majority of those may well be capable of performing their job.

The extension of right to request flexible working may provide a useful compromise position for an employee who wants to continue working for a number of years to top up a pension and the employer who wants to move forward with their succession planning and reduce wage bills.

A worker approaching 65 may use a flexible working request to suggest a working pattern that suits them. It could keep them in employment and earning a wage, while reducing the employer's wage bill and allowing younger workers to enter that business.

The application provides an employer with a formal framework that could enable it to reduce its reliance on older workers without risking discrimination claims.

Employers may also be worried about being inundated with flexible working requests from employees of all ages. But while the requests will impose an administrative burden on firms, a well-run company should be able to resist unsuitable requests.

Small firms are likely to be able to reject the request on the grounds of one of the eight reasons set out in law, because it is relatively easy for smaller companies to outline why individuals are essential to the company's welfare.

It may be harder for large organisations, and in fact many may already offer all employees the right to make a flexible working request. But larger organisations are at least more likely to have the resources to deal with the increased administrative burden of the extra requests.

Employers should remember that what is being extended is only a right to request flexibility. The employer is under no obligation to grant the flexibility, and can deny it for one of eight reasons such as an inability to meet customer demand or an inability to reorganise the work among the other team members.

What's more, provided that the employer follows the correct procedure, rejects the request for one of the permitted reasons and bases their rejection on the correct facts, the employee has limited ability to take the issue to an employment tribunal.

An employment tribunal can rule that an employer has run a flexibility request process poorly and ask that they do it again, but what they cannot do is overrule the underlying reasons for refusing one.

So what will happen if Government plans to allow anyone to make flexibility requests goes ahead? Whilst the change may result in more administration for employers they are unlikely to end up with a significant increase in the number of employees working part time and provided that it runs its processes properly and if it does not discriminate on the grounds of sex, when making their decision they are not going to end up in a tribunal.

Copyright © 2010, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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