Public sector not currently reviewing re-employment guidelines

I REFER to yesterday's reports ('Public sector reviewing rehiring terms' and 'Better rehiring deals in private sector').

The Public Service Division (PSD) issued the public sector re-employment guidelines last year and implemented re-employment in the public service on July 1 this year, six months ahead of national legislation.

These guidelines were the result of extensive consultation with ministries, statutory boards and public sector unions. They are aligned to the Tripartite Guidelines on Re-employment of Older Employees.

The Tripartite Guidelines recognise that employers can reduce the salary of re-employed employees to that of a younger employee of the requisite experience and competence doing the same job, with the mid-point of the salary range of the job as a possible reference.

Some private sector companies are already re-employing older workers at reduced pay; hence the public sector agencies are not the only ones reducing the pay of workers upon re-employment. Our guidelines allow public agencies to re-employ up to 10 per cent of retiring officers in a year at the last drawn salary.

Contrary to The Straits Times report, there is currently no discussion with the unions on this.

While we have received some feedback from public sector unions, which we will take into consideration, it would be premature to consider any review until there is wider experience of re-employment practices as the new Retirement and Re-employment Act will be implemented in the private sector only from Jan 1 next year.

We will continue to engage our public sector union partners on the implementation of re-employment in the public service and will look into any specific cases which may arise.

Bernard Chew

Covering Director

Careers and Attraction

Public Service Division

Prime Minister's Office

ST Forum, 22 Dec 2011

Labour leader denies remarks on union holding talks with PSD

YESTERDAY'S report ('Public sector reviewing rehiring terms') said that I had confirmed that the Public Service Division (PSD) is in talks with the Amalgamated Union of Public Employees (AUPE) and 'is working on any necessary refinements'.

The reporter had asked me if I was aware of any PSD announcement on changes to its re- employment guidelines before year-end. I said I was not aware of any such announcement.

I said the civil service had chosen to implement re-employment system-wide six months ahead of the law taking effect. As it implements, the management and the PSD would get ongoing feedback from employees and unions. Such feedback can help surface any areas for management and PSD to work on necessary refinements.

Public sector unions deal directly with their respective human resource counterparts in the ministries and statutory boards.

I was asked who was the counterpart to the AUPE. I said that as the general union for the civil service, the AUPE's counterpart is the PSD. I did not say the AUPE was in talks with the PSD on changes to the re-employment guidelines.

Heng Chee How
Deputy Secretary-General
National Trades Union Congress
ST Forum, 22 Dec 2011

Public sector reviewing rehiring terms for workers who turn 62
By Janice Heng , Cai Haoxiang, The Straits Times, 21 Dec 2011

The public sector is reviewing the re-employment terms it offers its workers who turn 62.

Talks are ongoing between the largest public sector union and the Public Service Division (PSD) to reduce wage cuts and extend medical benefits to workers it rehires. The talks between the Amalgamated Union of Public Employees (AUPE) and PSD are expected to end before Jan 1, when the re-employment law kicks in.

The law mandates that all employers offer workers who reach the retirement age of 62 an option to be re-employed.

On the review, Mr Freddy Lim, president of the Singapore Urban Redevelopment Authority Workers' Union, said current contracts 'are not encouraging workers to go for re-employment'.

Some public sector workers re-employed this year had their pay cut by up to 30 per cent, sparking unhappiness.

Re-employment guidelines agreed to by unions, employers and the Government allow for wage adjustments.

These guidelines say that if an older worker is earning more than a younger worker doing the same job, the older worker's pay can be cut to the mid-point of their salary scale.

The Straits Times understands that PSD uses this mid-point reference, and that should result in wage cuts of about 17 per cent.

The talks between the PSD and AUPE may lead to changes, said several union sources, and these will be followed by ministries and statutory boards.

The Government is Singapore's biggest employer, with 127,000 employees.

One point the two sides are discussing is for up to 10 per cent of each retiring cohort to be rehired at the same pay.

Another is for wages to be cut by a quarter of the salary range, instead of to the mid-point, which represents a cut of half the salary range.

Mr Lim said workers generally accept wage cuts if their job scope is reduced, or a small cut for doing the same job.

'But if you cut too heavily, a lot of them will reconsider whether they want to continue,' he said.

A third issue is the extension of medical benefits to re-employed workers, said Public Utilities Board Employees' Union general secretary Selvam Sivasamy.

Workers hired before 1994 were on a scheme where the Government co-paid 85 per cent of all medical expenses.

Since 1994, new hires have been on a scheme where up to $350 a year can be claimed for medical expenses, and 1 per cent of gross wages is paid into a worker's Medisave account to be used to buy health insurance.

Workers who are rehired at 62 will come under the later scheme. But one objection is that buying health insurance at that age is expensive and difficult.

Mr Selvam said the PUB management is quite willing to keep re-employed workers on the old scheme, but that the stumbling block is the PSD.

So far, the PSD and AUPE have agreed to remove the break of one working day required before a re-employment contract kicks in.

National Trades Union Congress deputy secretary-general Heng Chee How confirmed that the PSD is in talks with AUPE and 'is working on any necessary refinements'.

Mr Heng said the PSD could consider allowing for differentiation and flexibility.

Better rehiring deals in private sector
Salary cuts usually smaller than in public sector, say unions
By Cai Haoxiang & Janice Heng, The Straits Times, 21 Dec 2011

UNLIKE the public sector, where re-employed older workers can get a pay cut of as much as 30 per cent, workers in the private sector tend to see cuts of 10 per cent to 20 per cent, said unionists.

And unlike the public sector, not all private sector workers will suffer a reduction in pay when they are rehired on reaching the retirement age of 62.

Employers who are hungry for workers tend to rehire these workers without cutting their pay.

In fact, half of the 10 unions in the private sector which were interviewed by The Straits Times said employers in their industry will not cut the pay of older rank-and-file workers. These industries include security, shipbuilding, pre-school education, banking and airport services.

'In the shipbuilding industry, you still need older workers to coach younger ones,' said Mr Wong Weng Ong, president of the Shipbuilding and Marine Engineering Employees' Union. 'You cannot talk about cutting because in the end, nobody will want to work.'

But it is quite the opposite in the transport and construction sectors.

Many employers have been cutting the pay of their older workers even before the re-employment law takes effect in two weeks, said unionists. The law will require employers to offer to rehire a healthy retiring worker with at least satisfactory work performance, but does not specify the terms of employment.

But the Government, unions and employers have agreed on re-employment guidelines that allow companies to cut wages of rehired workers to that of a younger employee of the requisite experience and competence doing the same job.

The mid-point of the salary range was suggested as a possible reference.

But unionists like Mr Mohd Rasi Taib find this mid-point rule unacceptable when the worker is doing the same job.

Mr Mohd Rasi, president of the National Transport Workers' Union, is getting an earful from members working for public transport operator SMRT.

Unlike SBS Transit, which re-employs workers on the same terms until age 65, SMRT cuts the pay of workers to the mid-point when they turn 62.

On average, these rehired SMRT workers suffer a 20 per cent pay cut. But they continue to do the same job. These workers include train drivers and customer service officers who earn around $1,250 to $2,250, or technicians who earn around $1,250 to $2,875, Mr Mohd Rasi said.

His union is negotiating with SMRT to improve the employment terms of these workers, he said. 'A pay cut is understandable only if the re-employed person is doing less work.'

Mr Nasordin Mohamad Hashim, president of the 30,000-member Building Construction and Timber Industries Employees' Union, agrees.

Most of the 1,300 members in his union who were rehired this year received pay cuts of 10 per cent to 20 per cent, with smaller contractors more likely to do so, he said.

In the labour-starved catering services industry, 'the cut got smaller as the flow of foreign workers got tighter', said Mr Abdul Subhan Shamsul Hussein, president of the Food, Drinks and Allied Workers' Union.

Wage cuts have shrunk from 30 per cent three years ago to 10 per cent this year, following the government move to reduce the inflow of foreign workers with higher levies and smaller quotas, he said. Half of the 108 companies represented in the union do not even cut wages, he added.

It is a similar situation in the security and banking industries.

Security officers above age 62 still get pay rises like their younger counterparts, said Mr Desmond Choo, executive secretary of the Union of Security Employees.

'It is not uncommon to see companies hiring people in their 70s,' he said.

In banking, a rank-and-file worker will not get a pay cut on being rehired unless his performance is unsatisfactory.

Then, the pay cut is 15 per cent, said Singapore Bank Employees' Union general secretary Bobby Tay.

Re-employed workers also get up to $50,000 of medical benefits a year, down from unlimited coverage, he added.

With the looming slowdown, Mr Lim Kuang Beng, general secretary of the Singapore Industrial and Services Employees' Union, is worried 'whether there will be an impetus for re-employment next year when companies are not doing so well'. He said: 'We will have to make sure workers still have a job.'