Incentives for firms to re-employ workers past age 65
By Janice Heng And Linette Lai, The Straits Times, 30 Sep 2014
By Janice Heng And Linette Lai, The Straits Times, 30 Sep 2014
This "promotional approach" was suggested by a tripartite committee and accepted by the Government yesterday, said the Ministry of Manpower (MOM).
Details of the incentives are now being worked out by MOM, together with the Finance Ministry and tripartite partners which include employers and unionists.
These will be announced next year but backdated to Jan 1, 2015.
Currently, companies are required by law to offer re-employment to eligible workers when they turn 62, up to the age of 65.
But the labour movement, especially, has been calling for the age to be raised to 67.
Since late last year, the Tripartite Committee on Employability of Older Workers (Tricom) has been studying the question of when this should happen.
After consulting stakeholders such as unions and employer groups, Tricom recommends that the Government use incentives to coax companies to do it before legislation eventually kicks in.
It also issued guidelines in a Tripartite Advisory on Re-employment of Employees from Age 65 to 67, for employers that want to do it.
The labour movement welcomes and supports this advisory, National Trades Union Congress (NTUC) deputy secretary-general Heng Chee How said last night.
"Starting with promotion is not new," said Manpower Minister Tan Chuan-Jin, noting that the same approach was taken in 2012 to encourage firms to rehire older workers when they turn 62.
Mr Stephen Lee, immediate past president of the Singapore National Employers Federation, said the news should cheer bosses, who feared the legislation would kick in "too soon".
"We therefore welcome the time given to help employers to manage their older workers over the next few years before legislation sets in," he added.
Incentives will also help companies make the transition, said Association of Small and Medium Enterprises president Kurt Wee.
Incentives will also help companies make the transition, said Association of Small and Medium Enterprises president Kurt Wee.
As for what these could be, Mr Wee said: "It can't get better than a kind of direct wage subsidy for older workers."
He noted that companies already have other forms of help, like funding to make workplaces and processes elder-friendly.
Older workers like administrative assistant Indra Mohan think the incentives are a "wonderful" way to nudge companies to keep their older workers.
"(This news) is a huge relief to many who are waiting and wondering what's going to happen next," said the 64-year-old.
Singapore's largest employer, the public sector, however, is taking the lead. It will re-employ its officers up to age 67, Deputy Prime Minister Teo Chee Hean, who is Minister-in-charge of the Civil Service, said in a statement.
The Public Service Division will announce the details, he added, without specifying when.
Its move was lauded by NTUC's Mr Heng: "This sends a strong signal to the other employers and we hope that many would emulate (its) example as soon as possible."
Rehiring past 65: Key worry is about costs
Wage and medical care subsidies would be helpful, say employers
By Amelia Tan, Joanna Seow and Marissa Lee, The Straits Times, 1 Oct 2014
Wage and medical care subsidies would be helpful, say employers
By Amelia Tan, Joanna Seow and Marissa Lee, The Straits Times, 1 Oct 2014
They flagged wages and medical bills as the main challenges in rehiring older workers and are hoping for subsidies that could help alleviate the burden.
The firms were reacting to the Manpower Ministry's announcement on Monday that from next January, incentives will be offered to firms that voluntarily rehire workers past 65.
Currently, companies are required by law to offer re-employment to eligible workers when they turn 62, up to the age of 65.
Most of the 12 bosses who spoke to The Straits Times said they were open to rehiring older workers, in the light of the tight labour market.
"Older workers are valuable... but employers are worried about the costs," said Mr Brenton Ong, director of human resources at Concorde Hotel Singapore.
More firms will voluntarily rehire workers beyond 65 if they get financial help to pay for the treatment of chronic illnesses which older workers are prone to suffer from, he said.
Other employers suggested wage subsidies of between 10 and 25 per cent for older workers. These will allow them to offer higher salaries and cut down on working hours.
"If we re-employ workers we may have to rework salary levels because their efficiency or productivity may not be as high," said Mr R. Dhinakaran, managing director of lifestyle and fashion retailer Jay Gee Melwani Group.
Mr Edlan Chua, chief operating officer of Chinese restaurant chain Paradise Group, added: "Some older workers may be working 44 hours a week. With a wage subsidy, we can offer them the same pay but they can work, say, 36 hours a week."
Other employers suggested that training courses can help to ensure that older workers have relevant skills.
Other employers suggested that training courses can help to ensure that older workers have relevant skills.
"Their skills may need to be updated, and this will benefit both employers and employees," said Mr Jimmy Fong, executive chairman and CEO of Apple reseller chain EpiCentre.
The incentives should lead to real change, said National Trades Union Congress (NTUC) deputy secretary-general Heng Chee How. "We hope to see a change in legislation to raise the re-employment age to 67 soon. But there is no consensus yet on the timing of the change," he said.
It could take a while before companies are ready for a change, said Senior Minister of State for Health and Manpower Amy Khor on the sidelines of an event yesterday.
"Not so many firms are prepared to employ beyond 65. So we need to give them time to adapt to the upcoming change," said Dr Khor, who heads the Tripartite Committee on Employability of Older Workers.
For older workers who want to work beyond 65, their main worry is taking a pay cut. Said private school lecturer William Loh, 61: "If you're doing the same job, companies have no right to reduce remuneration. Just because I'm older doesn't mean I will lecture less or mark fewer papers."
Others hoped that their employers will continue to offer them medical benefits, such as paying doctors' fees and medicine.
Mr Teoh Ah Kian, 62, a baker at Giant supermarket at IMM Mall, said: "We also get dental benefits, so this helps to reduce my expenses."
Some suggestions
- Employers say that more firms will voluntarily rehire workers beyond 65 if they get financial help to pay for the treatment of chronic illnesses which older workers are prone to suffer from.
- Other employers suggested wage subsidies of between 10 and 25 per cent for older workers. These will allow them to offer higher salaries and cut down on working hours.