Incentives for Extension of Employment Contracts to Elderly Workers

Er Dr Lee Bee Wah asked the Minister for Manpower (a) whether the Ministry is aware that some companies are unwilling to extend the contracts of healthy elderly workers to 67 years old; (b) what is the Ministry doing to incentivise hiring of elderly workers; and (c) how many workers aged 60 and above are actively looking for jobs.

Under the Retirement and Re-employment Act (RRA), employers are required to offer eligible employees re-employment till age 67. Since re-employment was introduced in 2012, over 98% of private-sector local employees who wished to continue working at age 62 were offered re-employment. The number of disputes related to re-employment has remained low for the past five years, at about 40 each year. Most cases were resolved through mediation, with less than four cases, on average each year, which proceeded to adjudication. These cases contain a mix of situations where the dispute arose due to a misunderstanding of the law by the employer or employee.

The Ministry of Manpower (MOM) has in place a number of measures to increase the employability of older workers and encourage employers to hire older workers. The Special Employment Credit (SEC) scheme provides a wage offset of up to 8% of monthly wages to employers when they hire older workers. An additional wage offset of up to 3% of monthly wages is also provided to encourage continued employment of older workers aged 65 and above. Reduced employer Central Provident Fund (CPF) contribution rates for employees aged 55 and above further help to moderate the costs of hiring older workers for employers. Under the WorkPro scheme, employers can receive Government funding support of up to $320,000 per company to implement age management practices and redesign workplaces and processes to create easier, safer and smarter jobs for older workers.

As mindset change is also needed to improve the employability of older workers, the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) runs campaigns to raise awareness of the value that older workers bring to the workforce and encourage employers to tap on their skills and experience.

In June 2017, the unemployment rate of older residents aged 60 and above in the labour force remained low at 3.3%. MOM actively supports them through the Adapt and Grow Initiative. This includes Career Matching services, as well as programmes to help workers overcome wage and skill mismatches. In particular, the Career Support Programme encourages employers to hire experienced, mature professionals, managers, executives and technicians (PMETs), especially the long-term unemployed, by providing them with salary support. Mature PMETs can tap on the higher wage and training support under the Professional Conversion Programmes to reskill, so that they can move into new occupations and sectors with good prospects and progression. Mature rank-and-file workers can also tap on wage and training support under Work Trial and other Place-and-Train/Train-and-Place programmes offered by Workforce Singapore and the National Trades Union Congress (NTUC)-Employment and Employability Institute.

Our various programmes to improve the employability of older workers have been showing encouraging results. The employment rate of residents aged 55-64 has increased from 61.2% in 2011 to 67.3% in 2016. This compares favourably with developed economies, with Singapore ranked ninth against 35 the Organisation for Economic Cooperation and Development countries in 2016. We will continue to work with the tripartite partners to improve opportunities for older Singaporeans who are fit and ready to find employment.