Sunday 12 October 2014

Heng Chee How: Why turn someone into a dependant prematurely?

Deputy labour chief Heng Chee How was in his mid-40s when he first started the fight to introduce a re-employment age of 65. Now 53 and trying to push forward the raising of the re-employment age to 67, the MP for Whampoa has a greater appreciation of what it means to be an older worker. He tells Charissa Yong why he feels the move is necessary, what his response is to brickbats from older folk worried - unnecessarily - that they will be forced to work longer, and why the crucial part of the battle is already won.
The Straits Times, 11 Oct 2014

How far away are we now from extending the re-employment age from 65 to 67? (The official retirement age is 62. But by law, bosses must offer healthy workers who have performed satisfactorily re-employment from 62 to 65, or give a one-off payment if no job is available).

There is already agreement between the Government, companies and unions that there will be legislation (to raise the age). So it is going to happen. It is just a matter of time. From the labour movement's perspective, we've wanted it to be raised as soon as possible. If the employers are ready, we are ready.

The last round (when re-employment was introduced in 2011), we took three to four years to get the unionised sector ready for re-employment. This time (in the talks held for over a year involving the companies, unions and the Government), we're looking at raising the re-employment ceiling from 65 to 67. Two years ago, I called for a tripartite group to be formed to begin to move the re-employment age beyond 65. We're confident we can get 500 or more unionised companies on board in a year or two.

What do you think of the progress that has been made?

If I had my way, I'd have had it done yesterday. But I'm not disappointed with the progress that we have made.

It's not as if the tripartite partners even refuse to come together to discuss. It's not like when they come together to discuss, everybody just dances around and beats around the bush, instead of trying to address the question squarely. But we have (addressed the question squarely).

We have the consensus. And it's not as if we have only a motherhood consensus in principle, and we are not prepared to take a concrete step. We have. That is the advisory.

And we have called on the Government to provide incentives since it's not yet mandatory, which (it) has said it will, and on the public sector to lead the way, which it will as of January next year (as announced on Oct 2). Some statutory boards like PUB and the Housing Board already re-employ workers past 65 now.

Why is it necessary to raise the re-employment age to 67?

National trends show that the population is ageing. It means those who are in that older demographic have growing needs, which need to be addressed.

From the perspective of a worker who may still need to feed the family and pay for expenses and mortgages, or wants to continue to contribute, he or she deserves to have a chance and a choice (to do so). That's fair.

If you don't give the individual that chance and choice, ultimately, someone still has to provide for him. Why turn someone who can be independent into a dependant prematurely? That's why I feel it is right to push for the age to go up.

What is your response to people who criticise the move as one that forces them to work longer and does not allow them to retire?

My take is that when you give a chance and a choice to people, nobody will mind. Because nobody is forced to work a day more than he or she wants to.

But if (they) want to, then there is the opportunity to. From the worker's perspective, that cannot be a bad thing.

We are reflecting the main sentiment we hear from the ground that many workers are on re-employment, and they want to continue working and are capable of doing so.

Supper with Heng Chee How -RazorTV

Why does Singapore need a law to mandate this?

At each stage of raising the retirement age, or introducing or raising the re-employment age, we have to go through a protracted process of fact-finding, sharing, discussions, bargaining, in order to make progress.

But we should not ask companies to do national service. That is not sustainable.

If today we could get it done without a law, it would be ideal. But when you look at the reality of a situation, whether it's guidelines, advisories, a law, moral suasion to negotiation to mandating, you need something extra for progress to happen.

I'm not saying employers are being difficult - they have their concerns also.

But there will be companies which say: "I will not be interested in discussing this subject unless I have to." But when (they) know there's already a tripartite consensus that there will be necessary legislation, then it's a question of whether you want to get ready before or after your competitors. So it helps us to persuade them to take it seriously.

What are the concerns of companies hesitant to re-employ their older workers?

First, the cost of an older worker's wages. There is a salary scale for every job. Therefore it's more costly to hire a person who's senior and already at the top of the scale, compared to a person in the middle or at the bottom.

Second, the high cost of medical insurance premiums for older workers. Some people will say that older people will fall sick and their health-care bill will go up.

What incentives do unions want to get companies on board?

Wage subsidies to the employer, and help with health-care costs. Programmes can be carried out to help workers stay healthy and lower the cost of medical insurance premiums. We're waiting for the Government to work out the specifics of the incentives (to entice companies to re-employ older workers that were announced last week and will take effect next year). It's how to make the older worker more attractive so employers will want to keep him.

Employers have asked for a direct wage subsidy for employing mature workers. What do you think ?

Of course, if there's free money, who doesn't want? However, I'd find it strange if a business person's formula for profitability is to depend on grants. Companies should look at grants the same way a worker looks at bonuses. It should not be seen as part of the regular earnings, but as a way of buying time for the companies to get ready for the eventual raising of the re-employment age.

What is the labour movement's strategy?

We're looking to produce, as best as we can, a groundswell of good examples across different industries and companies, big and small, that hire older workers. This will help comfort and encourage employers that it is actually quite all right to move on this front. We want businesses to know that other businesses, even their competitors, have figured out how to make the best use of their human resources and be competitive.

Why do you favour a gradual process of seeking a consensus, over the Government pushing through legislation with or without a consensus?

The Government tries to balance the views of businesses with the views of workers. Enabling more workers by law to work longer enables more to be independent.

At the same time, the Government wants to make sure that a worker, enabled by law to have a job, actually has a job. So it has to listen carefully to the business side to make sure that the golden goose is also there, not only whatever was in the dead goose's innards. There might be a couple of eggs in the dead goose, but you don't want a dead goose. If you do it wrongly and misjudge the timing, you hurt the economy and hurt jobs as a result. That will affect everybody - workers, companies, the economy and country.

On the other hand, if you listen only to the naysayers - some say they may not survive or may relocate if we do this - you become paralysed and dare not make a decision. You cannot govern that way. You're staring at the demographic trend (of an ageing population) as well.

Earlier this month, the public sector announced that it was formalising arrangements to hire its eligible workers past 65, till 67. What is stopping some private sector firms from doing the same?

The public sector is not the private sector. The Government is an employer with a social demographic to attend to, and wants to lead by example, but is not running a business. It pays people (salaries) by taxing others. So its revenue model is not the same as that of a private-sector business.

Nonetheless, the Government, as the biggest single employer in Singapore, sends a strong signal (to other employers) by its action.

What advice would you give someone who is 65 this year and hopes to be re-employed next year?

Keep up the good work. Stay in demand, and stay healthy. Know that the tight labour market currently is on the side of workers. As long as you show your value to the employer, and the employers know that it's not easy to get manpower, then they will certainly want to keep workers who are adding value to the company.

Older workers will also need to make sure they don't lose out by showing their willingness to continually learn skills. For example, you could be experienced and have worked in analog technology. But technology tomorrow is going to be digital. If you see that as an opportunity to retrain yourself and do so, then there is a road forward for you.

What do you think is the labour movement's biggest area of concern about re-employment?

We need to monitor whether yearly employment rates take a dip in the years before and after a worker reaches 62. Suppose you are an employer and you don't want to have too many older workers post-retirement age, but you want to comply fully with the law. So you retire them before 62, not because of their age, which would be illegal, but for other reasons like performance. Or you re-employ them for a year when they turn 62 but after the year is up, offer subsequent contracts on unreasonably poor terms. We have to watch out for (that).

What drew you to the cause of mature workers?

I am not young. I am increasingly able to understand and appreciate the hopes and dreams, and fears and anxieties of older workers. I gravitated naturally towards it. In 1995 (when I was 34), I was involved in the NTUC youth wing, because I was of that age. So I have moved through the different age groups and, now, I'm 53. It is something I feel completely at home with and have a feel for.

Whenever I get into these discussions, I get excited about it, because it is something I feel passionately about, and also something very close to a lot of people's hearts. Almost every family will have an older or middle-aged person working or as a dependant.

Do you get tired of having to keep pushing for the re-employment age to be raised?

No. This is the right thing for this country. Nothing of this sort comes easy. If it were natural to all parties, it would already have been done. So I will keep pushing.

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