If an employee requests to continue working beyond the normal retirement age of 65, can the employer refuse this request? If so, how can it be done without exposing the Company to a discrimination claim?

From your question, it sounds as though you have already kick started the retirement procedure and issued your employee with notice of his/her intended retirement date and his /her right to request working beyond 65. If so, and if this notice has been issued before tomorrow, 6 April 2011 and in accordance with the statutory timeframe (6-12 months before the employee’s intended retirement date) and if the employee will reach their default retirement age of 65 between 6 April and 30 September 2011 (yes, there are a lot of “ifs”!), you can reject the request provided that you have followed the statutory procedures correctly and have given proper consideration to the request.

The timings here