TODAYonline

For those over 62, the shape that re-employment deal could take

Teo Xuanwei
xuanwei@mediacorp.com.sg

AT LEAST one year before your 62nd birthday, your boss will sit you down and discuss your re-employment plans.

He will tell you if you have been performing satisfactorily and of possible new job arrangements in the company.

And three months before you hit retirement age, your employer must give his decision: If he wants to rehire you, he'll offer a detailed re-employment package. If not, he should offer "employment assistance".

This is the scenario that could soon be played out, according to an advisory released yesterday that gives a preview of the possible nuts-and-bolts of re-employment legislation.

Due to kick in by 2012, the law will require bosses to offer re-employment to workers up to age 65, and later, up to 67. The Tripartite Implementation Workgroup, formed last October, has laid down some "good practices that employers should consider adopting".

For instance, it recommends that employers seek to rehire "the majority of their older workers", as long as they are medically fit and performing well. To ensure "some measure of certainty" for workers on their re-employment contracts, employers are urged to offer term contracts "of at least one year", renewable up to the age of 65.

While older workers know to expect lower wages upon re-employment, the advisory spells out for the first time the level of adjustment.

For example, those doing the same job can expect their pay to fall within the "mid-point of the salary range" of a younger counterpart.

The workgroup also advised employers to offer performance bonuses, gain-sharing incentives or one-off bonuses, "where appropriate", to "incentivise and motivate these employees to perform well".

Finally, companies are asked to accommodate the needs of older workers, such as re-assigning them to modified jobs or having flexible work arrangements.

While the advisory does not necessarily dictate what will be implemented – companies' feedback will help shape guidelines to be issued next year, which in turn will serve as the basis for drafting the re-employment law – security officer Mr Jeyasingam, 56, said it "makes straightforward and clear what is to come".

Mr Philip Overmyer, executive director of the Singapore International Chamber of Commerce, said the guidelines "provide an opportunity for employers and employees to think through their options early".

Some companies, for instance, may re-assess their current policies.

MediaCorp did not offer annual increments and variable bonuses in its recently-announced re-employment package. Now, said Ms Chan Yit Foon, its executive vice-president of human resources: "Following this new advisory, we will look into the recommendations and make any necessary adjustments in our current policy and guidelines."

He added that the advisory offered "very constructive guidelines". But some noted that companies need not stick rigidly to them. Mr Ken Pereira, chief executive of a security firm, said: "At the day's end, the important thing is to be fair to the older workers."

Agreeing, Madam Halimah Yacob, who is in the Government Parliamentary Committee for Manpower, said the guidelines should only "serve as a yardstick". What matters is that both the worker and his employer are satisfied with the arrangement, she said.

Others highlighted areas in the guidelines that could be improved.

Mr Overmyer said the three-month time-frame for employers to offer new re-employment deals to mature workers may be too short. He suggested that a six-month window would provide more time for workers to consider the deal and work out their options.

In terms of pay adjustment, while Mr Jeyasingam agrees that older workers should not expect the same salary after 62, he feels that a 30 per cent pay cut would be more reasonable.

Mr Fahmi Abu Baker, vice-president of the union for workers in the electrical and electronic industries, felt that workers above 62 should be offered reemployment contracts for a period of "at least two years". Said the 45-year-old: "Doing so would make the worker more committed and motivate him to perform better."

Some worry how companies may struggle when the new re-employment laws are enforced.

Mr Foo Kok Kiong, president of the Construction & Timber Industries Employees' Union, felt that while the guidelines "are good for a start", they are powerless in the face of macroeconomic factors. When the industry does not perform well, employment, especially for mature workers, is "not secure".

To give feedback, email SNEF at beyond62@snef.org.sg, NTUC at ongst@ntuc.org.sg, or MOM at mom_lrd@mom.gov. -- Additional reporting by Loh Chee Kong