'Same job, so same pay for older worker'

Companies say labour shortage and battle for talent behind wage decision

By Toh Yong Chuan, The Straits Times, 23 Jul 2013

THE shortage of workers and battle for talent are forcing Singapore companies to maintain or even raise the pay of their older workers.

Also, it is not right to cut the pay of workers when they turn 62 if they continue in the same job, the companies told The Straits Times yesterday following a report that the public sector lags behind the private sector in the way they pay these workers.

On Sunday, the NTUC said its survey of 118 unionised companies in the private sector shows eight in 10 did not cut the pay of of their workers when re-employing them at age 62.

In contrast, public servants, when re-hired, faced pay cuts of up to 30 per cent.

Using the findings, the NTUC has renewed its push for re-employment terms in the public sector to be reviewed.

When asked yesterday whether it would review the pay formula for these older workers, the Public Service Division said it "has been reviewing" re-employment guidelines and its review "took into account" private sector practices.

"We expect to release the outcome of our review soon," its spokesman added in a statement, without elaborating.

Meanwhile, all the 10 small and medium-size enterprises (SMEs) interviewed were opposed to reducing the pay of older workers.

The president of the Security Association of Singapore, Mr T. Mogan, said it was "unthinkable" for security companies to even consider cutting the pay of guards: "We are still in need of them. It is not as if there is a long queue of young people wanting to join the sector."

For training consultancy Absolute Kinetics, reducing the salary of an older worker who continues to do the same work sends a wrong signal, said its executive chairman, Mr Fang Koh Look.

"It tells the worker the firm does not value his work," he said, adding, "if I cut the pay of an older, experienced worker today, he will wonder, 'Why should I continue to work for you tomorrow?'"

While the SMEs declined to comment on public sector practices, some suggested it review its practice of cutting the pay of these workers automatically.

Said Mr Frederick Wong, chief executive of M-Luck International which provides housekeepers for hotels: "What matters more is whether a worker can continue to meet the requirements of the job, not his age."

NTUC yesterday declined to give more details, such as the size of the companies it surveyed and the sector to which they belong.

But for Heng Li Eating House owner Lim Kuong Kwok, the size or sector does not matter. "It comes down to how we treat our older workers.

"They are Singaporeans who are trying to earn a living too, so how can we cut their pay just because they turn 62?" he said in Mandarin.

Public sector 'lags behind in pay for rehired staff'

NTUC uses poll results to push case for change in re-employment terms

By Pearl Lee, The Straits Times, 22 Jul 2013

THE public sector lags behind private companies when it comes to pay packages for older workers who are rehired, the labour movement said yesterday.

A survey of 118 firms conducted by the National Trades Union Congress (NTUC) last year found that close to eight in 10 unionised companies in the private sector did not reduce the pay of their older workers when they were rehired at 62.

In contrast, public servants faced pay cuts of up to 30 per cent when they were re-employed at the age of 62.

NTUC deputy secretary-general Heng Chee How produced the survey results yesterday to strengthen the union's call for change in the public sector.

"When compared to the private sector, actually they (the private sector) are doing better in this regard," said Mr Heng, who is also Senior Minister of State in the Prime Minister's Office. "(The findings are) our additional basis to ask that the formula that they are currently using to determine re-employment pay be reviewed in the light of the findings for the broad private sector."

Mr Heng was addressing an audience at the annual U Live Symposium organised by the labour movement.

It was previously reported that unlike the public sector, the private sector tends to see cuts of 10 per cent to 20 per cent. Not all private sector workers will suffer a pay reduction when they are rehired on reaching 62.

In the public sector, re-employed officers will have their salaries adjusted to the mid-point of the salary scale they are at, or 70 per cent of the last drawn salary, whichever is higher.

"From the labour movement side, we are not saying that you cannot adjust pay downwards, but what we are trying to say is... the default should be to consider the value of the job and the contribution of the person, rather than the formula," he said.

This is not the first time the NTUC has pushed for parity. Two years ago, unionists pointed out the difference in pay cuts between the public and private sectors - even before the law that raised the retirement age from 62 to 65 went into effect.

Mr Heng said NTUC had met the Public Service Division and had shared the survey findings with it.

One company that does not cut the wages of its workers when they hit re-employment age is KH Security Agency. It does not reduce wages based on age because its requirements for workers do not change.

"We value the experience of the older workers who have been in the company for a long time," said senior business development manager Gary Haris. "And we keep them for as long as they can be productively employed."

At the U Live Symposium, Mr Heng reiterated another push by the labour movement: Raising the age limit for re-employment from 65 to 67, to allow productive workers to continue working.

This will not be an overnight change, he said, pointing out that it took four years to raise the re-employment age from 62 to 65.

"The process of going from 65 to 67 will again require more learning on the ground, which is why I want the process of collecting data and learning and discussing to begin sooner rather than later," he said.

Related

No pay cut for junior civil servants re-hired at 62

Salary for public sector staff already re-hired to be reviewed