New Retirement and Re-employment Act takes effect 1 Jan 2012

By S Ramesh, Channel NewsAsia, 1 Jan 2012

Companies appear to be ready for Singapore's new Retirement and Re-employment Act, which takes effect on 1 Jan 2012.

Employers expect it to be implemented smoothly, after four years of work by the tripartite partners of government, unions and employers to prepare workers and employers.

The Act provides opportunities for workers who are willing and are able to continue working beyond retirement.

It also gives employers the flexibility to keep older workers.

The changes come at a time when Singaporeans are living longer, with average life expectancy higher, at 81 years in 2009.

According to the 2011 labour force survey, 61.2 per cent of workers aged 55 to 64 are still working, higher than the 59 per cent in 2010.

Another survey by the Ministry of Manpower (MOM) of 3,100 companies showed as at June 2010, about eight in 10 companies had put in place measures to re-employ workers beyond 62.

The labour movement said there are 10,564 re-employed workers from the unionised sector, a figure that is three times higher than that in 2007.

President of the Singapore National Employers' Federation (SNEF) Stephen Lee said while it is not possible to get 100 per cent support, there is a high percentage of positive responses from companies to the law.

Mr Lee said the federation will continue to reach out to the rest over the next few years. 

"There is every reason to believe that the progress we have achieved in the last three years will probably continue over the next few years," Mr Lee said.

"We are never satisfied with what we have and we will continue to work towards a higher rate of re-employment of older workers.

"Over the last three years, despite one recession, we have actually made good progress. I am quite happy in this area that the tripartite effort has worked.

"I recall that even three years ago during the downturn, one of our fears was whether the companies would take this opportunity to get rid of all their older workers. But that didn't happen.

"The retrenchment showed that there is no age gap. So the retrenchment was applied similarly - the older workers and the younger workers' rates were the same.

"I hope that this has already anchored itself and employing older workers is already a part and parcel of the HR policy of most companies".

Minister of State for Manpower Tan Chuan-Jin has urged employers to ensure their older workers are re-employed, as long as they are fit and able to contribute.

He noted the tripartite partners have put in considerable efforts to help employers, unions and workers prepare for the re-employment law.

He said in an email response to Channel NewsAsia that for re-employment to be sustainable and achieve win-win outcomes, employers and employees need to adopt a positive mindset in working out re-employment arrangements.

"On the part of employers, they should view older workers as a valuable asset and tap on their expertise and experience," Mr Tan said.

"On the part of employees, they should adopt a flexible approach in considering re-employment options and adjustments, and at the same time, ensure that they can continue to contribute to their organisation."

While the objective of the law is to create employment opportunities for older workers, the tripartite partners recognise that some employers may not be able to offer jobs to eligible workers due for re-employment.

They have the option of offering them the Employment Assistance Payment to help them tide over while they look for a new job or go for training.

The SNEF said some companies have not prepared for the re-employment legislation as they do not have employees reaching the age of 62 yet.

They can turn to a special re-employment unit to better understand the law and guidelines.

Mindset change key to rehiring law's success: Tan Chuan-Jin
Channel NewsAsia, 6 Jan 2012

Minister of State for Manpower Tan Chuan-Jin said the success of the Retirement and Re-employment Act (RRA), which came into force this year, lies with Singapore's ability to change ageist mindsets and embrace more enlightened attitudes.

Writing in his blog, Mr Tan said Singapore is now at the stage to translate policy into reality even as companies look forward to contending with the ups and downs of the economy.

He said the Ministry's 2010 Survey on Retirement and Re-employment Practices showed that the proportion of companies that allowed employees to work past 62 increased significantly from 64 per cent in 2009 to 77 per cent in 2010.

Among the 9,900 local employees reaching the age of 62 in the year ending June 2010, 94 per cent were allowed to work beyond 62.

At a broader level, the employment rate of resident workers aged 55 to 64 increased from 56.2 per cent in 2007 to a high of 61.2 per cent in 2011.

He said a recent media story asked if Singapore should have delayed the Act's (RRA) effective date until the economy is on the upswing.

But he felt there is no good time to do this.

Mr Tan said one main concern is workers might be short-changed in the re-employment process through arbitrary wage cuts.

As such the ministry will keep a close watch on this.

He also urged employers not to cut wages or other terms automatically, urging them to be "fair" and make adjustments based on reasonable factors in line with the job scope and value, as well as the extent of seniority-based elements in a company's wage structures.

Similarly, workers should be open-minded about new job options and adjustments.