The Federal government has again raised the issue of increasing the age pension age in its May 2014 budget announcement. Recent changes to federal industrial laws introduce rights for mature age workers to request flexible working arrangements. As mature age workforce participation increases as a result of the general ageing of the population, coupled by new disincentives to leave the workforce, flexibility is likely to become a more common feature of the modern Australian workplace.

Changes proposed in the May 2014 budget seek to extend the age pension age to 70 by 2035 (at present, the age pension age is set to increase up to 67 from 2023). In addition, the budget proposes creation of the Restart programme, which aims to encourage workforce participation for workers aged 50 and above.

A number of commentators have raised serious concerns about stretching out access to social security benefits. Workforce participation in Australia currently drops steadily after age 55, and is below that of comparable OECD countries[1]. Although, participation is increasing as the median age of the population increases[2]. In light of the proposed changes to the age pension and likely impact on workforce participation, it is increasingly important for employers to be mindful of the specific needs and requirements of mature-age workers. Practical considerations might extend to safety, flexibility, training and insurance.

Flexible working arrangements have already been addressed by amendments to theFair Work Act 2009 (FW Act) that commenced in July 2013.

On 1 July 2013, amendments to the FW Act expanded the existing “right to request” flexible working arrangements beyond parents with young children to a broader category of employees including employees that are 55 or older, employees that are carers (within the meaning of the Carer Recognition Act 2010), and employees that have a disability.

These changes arose, in part as the result of a review of the FW Act in 2012. In the report titled “Towards more productive and equitable workplaces”, the Review Panel formed the view that the then current flexibility provisions should be expanded to reflect a wider range of caring responsibilities. In making this recommendation, the Panel considered the flexibility objective of the FW Act as well as "the importance of maintaining a skilled workforce…”.

Any request for a flexible working arrangement under the FW Act must be in writing and set out the details of the change sought and the reasons for the change. An employer must give the employee a written response to the request within 21 days, stating whether the request is granted or refused. An employer may only refuse the request on ‘reasonable business grounds’. Amendments in the FW Act now define ‘reasonable business grounds’ to include whether the new arrangements are too costly, impact other employees, are too impractical, likely to result in a significant loss in efficiency or productivity or likely to have a significant negative impact on customer service.

As mature age workforce participation increases, employers would be wise to give genuine consideration to matters relating to workplace flexibility. This approach may result in a more productive, efficient and balanced workforce, with retained knowledge, skills and experience in the long term, regardless of any imperative for people to remain employed longer due to incremental changes in the pension age.