Flexible work arrangements for mature-aged workers
In addressing the problem of the ageing workforce, it is important to focus on increasing both the labour force participation and productivity of older workers. Participation may be increased through flexible work arrangements.
Employers can benefit from being more flexible in managing mature-aged workers in the following ways:
- retention of corporate knowledge and skills
- reduction of knowledge and skill shortages in critical areas
- minimisation of recruitment and training costs
Flexible work arrangements that can be made available to older workers in the workplace are based on phased retirement options. Phased retirement may enable employees who are close to retirement or eligible to retire, but unable to continue working full-time, to make an easier transition to retirement. Mature-aged workers may also be able to achieve a desired balance between work, family and lifestyle commitments, such as elder care, spending more time with grandchildren and travel opportunities.
Phased retirement may be either:
- Gradual retirement
Pre-retirement gradual reduction in hours of work and/or workload
- Deferred retirement
Refers to post-retirement part-time, casual or contract work, pay averaging, or job sharing for those who still wish to work
Gradual retirement/ pre-retirement
Description
Gradual retirement allows older employees to progressively reduce their working time and/or workload over a period of time instead of abruptly shifting from full-time employment to retirement.
An employee’s working time may be reduced by utilising a number of options. Part time employment, job sharing and pay averaging for purchasing additional annual leave may assist mature-aged employees reduce their working time.
Another option for reducing working time is taking partial long service leave over a long period of time. For example, an older employee with a large long service leave balance could negotiate extending their participation in the workforce by working four days per week and use one day long service leave, so they still receive a full-time salary while reducing their work time.
An employee’s workload may be reduced by the employee and employer voluntarily re-negotiating duties and responsibilities. This could involve rearranging work responsibilities within the team or section or simply moving to a different job of the same classification level. The employer may agree to this change without a reduction in pay.
Eligibility for partial long service leave over a long period of time
Eligibility to take partial long service leave over a long period of time is dependent on whether an award includes such a provision. If there is no provision in the award, or the employee is not covered by an award, section 45(2) of the Industrial Relations Act 1999 (PDF, 1.9 MB) states that the employee and employer may agree when the employee is to take long service leave. This section allows employees and employers to negotiate an arrangement whereby the employee can take a number of days per week of long service leave over an extended period.
However, section 45(3) in the Act provides that if the employee and employer cannot agree on when the employee is to take long service leave, the employer may decide when the employee is to take leave, which must be at least four weeks in length. Thus, for an employee to take partial long service leave the employee and employer need to agree and negotiate a written agreement that is signed by both parties or negotiate a provision within a certified agreement which states that the employee can take less than four weeks long service leave.
Eligibility for provisions to reduce workload
Rearranging an employee’s work responsibilities without a reduction in pay is not provided for under the Industrial Relations Act 1999 and is not provided for in awards.
Where there are no provisions under the Industrial Relations Act 1999 or awards, employers and employees may negotiate an informal arrangement, a formal policy or a formal agreement registered or approved by an authority or tribunal. Employees should contact their human resource department or employer to find out what provisions may already be available through any such arrangement.
What employees should know or do
Employees will need to consider the impact of these options on their superannuation as the contributions will be calculated on a reduced income.
The Australian Investment and Securities Commission Super Choices or Australian Taxation Office (non-Queensland Government link) can provide further superannuation information.
Deferred retirement/post-retirement
Deferred retirement involves extending employment after the normal retirement age, usually subject to employer approval and/or proof of fitness.
- One option is allowing older workers to continue working after retirement on a part-time basis. This provides older workers with an opportunity to supplement their pension income and maintain a number of benefits
- Job sharing and pay averaging schemes for purchasing additional annual leave are also ways that mature workers can continue to work at a reduced level
- Another option is for employees to retire (i.e. terminate) but still be available for casual or contract work as required
Further information is available on the eligibility for part-time employment , job sharing and pay averaging for purchasing additional annual leave.
Employees will need to consider the impact of these options on their superannuation as the contributions will be calculated on a reduced income.
The Australian Investment and Securities Commission Super Choices or Australian Taxation Office (non-Queensland Government link) can provide further superannuation information.
Last updated 2 October 2008
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