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Changes to re-employment law offer more opportunities for older workers

Employment practices
  • The Straits Times (23 January 2017): Changes to re-employment law offer more opportunities for older workers
  • The Straits Times (14 January 2017): Redeployed older workers should reinvent themselves
  • The Straits Times (13 January 2017): Changes to Re-employment Act do not guard against ageism

Changes to re-employment law offer more opportunities for older workers

- The Straits Times, 23 January 2017

  1. From July 1, employers must offer re-employment to eligible employees who turn 62, until the age of 67, up from 65 now ("Redeployed older workers should reinvent themselves" by Mr Francis Cheng, Forum Online, Jan 14; and "Changes to Re-employment Act do not guard against ageism" by Mr Edmund Khoo Kim Hock, Jan 13).
  2. Employers are also encouraged to voluntarily offer re-employment to their employees beyond age 67 wherever possible.
  3. A key feature of re-employment is that it need not necessarily be for the same job or on the same terms. This provides opportunities for employees to work longer, while maintaining some flexibility for employers.
  4. Nonetheless, adjustments to employees' terms and conditions should be based on reasonable factors such as productivity, duties and responsibilities.
  5. To provide greater certainty, employers should offer re-employment contracts up to the re-employment age, or on term contracts of at least one year, renewable until the re-employment age.
  6. Employers and employees have benefited from re-employment since its introduction in 2012.
  7. In 2015, over 98 per cent of private-sector local employees who wished to continue working at the age of 62 were offered re-employment.
  8. Employers should refer to the Tripartite Guidelines on the Re-employment of Older Employees, which sets out good re-employment practices for employers.
  9. Employers who are unable to find suitable jobs for eligible employees can offer an Employment Assistance Payment (EAP) as a last resort. The EAP is to help eligible employees who are not re-employed tide over a period of time while they look for another job.
  10. Today, the guidelines state that for an employee aged 62, the EAP could be three months of salary, subject to a minimum of $4,500 to help low-wage workers and a maximum of $10,000 to moderate the financial burden on employers.
  11. From July 1, the EAP for an employee aged 62 could be 3.5 months of salary, subject to a minimum of $5,500 and a maximum of $13,000.
  12. From July 1, employers who are unable to re-employ eligible employees can transfer their re-employment obligations to another employer, provided the employee consents and if the new employer agrees to take over all the re-employment obligations.
  13. Employees who feel that they have been unfairly denied re-employment or have been offered unreasonable re-employment terms or EAP should approach the Ministry of Manpower for assistance.

Redeployed older workers should reinvent themselves

- The Straits Times, 14 January 2017

  1. Productivity is important for companies, along with managing fixed overheads, of which wages constitute a big portion.
  2. If a firm cannot find suitable positions to slot its re-employed workers, it would make sense to transfer them out to other subsidiaries ("Older workers can work until age 67 from July"; Jan 10).
  3. The one-off Employment Assistance Payment, or golden handshake, for workers aged 62 is set at 3.5 times the monthly gross salary, and between $5,500 and $13,000.
  4. If an older worker's last drawn salary is $10,000 per month, that payment would amount to $35,000. The Manpower Ministry must impose a cap of, say, up to $20,000, depending on the profitability of the firm.
  5. A transferred older worker's salary cannot be the same for all workers. It should be based on the workload and worker productivity.
  6. Those who are fit enough and perform satisfactorily for redeployment cannot expect the same pay. Redeployed older workers must be realistic and acknowledge that they are no longer as productive.
  7. More importantly, can older workers adjust to their new roles, which could require them to report to younger supervisors?
  8. Such a relationship can be demoralising and uncomfortable. In such a situation, older workers should be encouraged to look on the bright side. For example, they get an opportunity to learn new skills from tech-savvy younger managers.
  9. Redeployed older workers should maintain an effective and productive working relationship with their younger colleagues.
  10. The MOM could allow companies to hire older workers on non-permanent contracts.
  11. It makes sense for firms to rehire retirees with reduced job scopes and responsibilities that would be commensurate with lower salaries. 
  12. If 10 per cent of retirees were to take up jobs without being too choosy, we could decrease reliance on imported workers.

Changes to Re-employment Act do not guard against ageism
- The Straits Times, 13 January 2017

  1. The latest changes to the Retirement and Re-employment Act are welcome news for seniors who prefer to work longer ("Older workers can work until age 67 from July"; Jan 10).
  2. However, urging employers to hire or retain mature staff is an uphill task. Having spent decades in the corporate world, I can safely say that management is rarely swayed by ethical convictions when it comes to this issue.
  3. Under the new law, employers still have the flexibility to transfer older employees to their subsidiaries or other companies. If these options are unfeasible, they may terminate them with financial compensation.
  4. This means seniors are still not receiving protection from discrimination based on age.
  5. Workers above 40 made up nearly two-thirds of resident workers who lost their jobs in 2015 ("Middle-aged execs caught in double bind: Survey"; March 22, 2016).
  6. It is hardly surprising that mature professionals, managers, executives and technicians are the most vulnerable group of workers, as they cost their companies more to hire and possess skills that are more employer-specific.
  7. Companies may also believe it is tougher for such workers to acquire new skills, and would rather invest in training and development programmes for younger staff.
  8. They may see the displacement of mature workers as providing opportunities, removing obstacles to gainful employment and helping young adults join the middle class and contribute to the economy.
  9. Discriminatory practices against older workers may even be seen as a necessary evil to resolve the growing problem of unemployment and underemployment of younger workers.