More incentives to Retain Workers beyond Retirement Age

The Senior Minister of State for Manpower (Dr Amy Khor Lean Suan) (for the Minister for Manpower): The Retirement and Re-employment Act, which came into effect in 2012, protects older workers from being dismissed on the grounds of age below 62, and from unfair denial of re-employment from 62 to 65. In situations where such workers feel that they have been unfairly treated, they can take up the matter with their union or the Ministry.

Nevertheless, we also appreciate that there might be legitimate reasons where businesses need to restructure or are just not able to keep some of their older workers. The Tripartite Guidelines on Re-employment of Older Workers give employers some flexibility in re-employing their older workers. For example, employers can re-employ employees with some modifications on re-negotiated terms. Where employers are unable to offer re-employment to eligible employees, they should offer such employees a one-off Employment Assistance Payment. In the unfortunate event where retrenchments are necessary, employers should carry out retrenchment responsibly and in consultation with the union, if the company is unionised.

Over the years, the Government has introduced several incentives to encourage the hiring and retention of older workers. We provide generous funding under WorkPro to help employers redesign jobs and the work environment to adapt to the ageing workforce. We also have the Special Employment Credit and Workfare Income Supplement to support employers and employees respectively to raise the employability of older low-wage Singaporeans.

We have seen positive outcomes from our efforts. The employment rate of older residents aged 55 to 64 has increased significantly, from 47% in June 2004 to 65% in June 2013. Re-employment rates have been high, with 99% of private sector local employees who turned 62 in the year ending June 2013 offered re-employment.

The Government will continue to monitor the situation to consider if further incentives are needed.

Thank you, Mdm Speaker. I have two supplementary questions. Recently, I have seen several cases of residents not offered re-employment when they reached 62. I saw that the reason given, when I appealed, is poor performance. I would like to ask: can such cases be referred to the Ministry and what will the Ministry do for such cases?

Next, in order to encourage employers to re-employ older workers, would there be more incentives like tax rebate for the companies?

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Under the Retirement and Re-employment Act, employers are required to offer re-employment to workers turning 62 up to 65, taking into consideration two criteria. The first criterion would be satisfactory work performance and the second criterion is medical fitness for further employment.

There have been some cases, since we implemented the retirement and re-employment legislation in 2012, on re-employment disputes. Most of the re-employment disputes pertain to performance or dispute over re-employment terms. These cases would be referred; they can approach a union – if the company is unionised – or directly to the Ministry. We have about 34 cases so far since the re-employment legislation started [Please refer to "Clarification by Senior Minister of State for Manpower", Official Report, 9 September 2014, Vol 92, Issue No 13, Clarification Section.] Most of these cases would have been resolved through conciliation. For the remaining cases, they are still undergoing conciliation.

With regard to further incentives, as I have said, since the implementation of the re-employment legislation, as at June 2013, 99% of private sector employees who have reached the age of 62 have been offered re-employment. In fact, 96% of those who have taken up the re-employment offers did not have their basic wage cut.

So, we think that the implementation of the re-employment legislation has been relatively smooth. In fact, because of the re-employment legislation, as well as the several incentives that we have already implemented in terms of the Special Employment Credit, Workfare Income Supplement, and generous funding to WorkPro, our employment rate for older workers has increased, as I have noted earlier, from 47% in 2004 to 65% as at June 2013. This 65% was the target that we set to achieve for the employment rate for older workers in 2015. So, we have actually achieved the target ahead of the timeframe that we have set for ourselves.

That does not mean that we will rest on our laurels. I would like to inform Members that this employment rate of 65% for older workers is comparable or even better than in some countries like South Korea and the United States, and quite near to the employment rate of older workers for Japan, which was at 65.4% in 2012. It is still lower than that in Sweden, but generally because the employment rate of our female workforce, the older women, is lower. It has improved over time but we need to catch up on that.

So, as I have said, we will continue to monitor and see if further incentives are needed.

Thank you, Madam. I just want to thank the Senior Minister of State for the fact that the participation of seniors has increased to 65%. I am more concerned as to what the Ministry is doing to reach out to the employers to ensure that there are fair

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re-employment contracts for these workers. And with an ageing population and more feeling fitter these days, will the re-employment age be moved in the near future?

I thank the Member for his question. I think he has been very consistent in asking the question about extending the re-employment age.

First, let me say that we have undertaken a very proactive tripartite promotional approach to engage employers to encourage them to adopt fair employment practices. Just this year in June, through the Tripartite Committee on the Employability of Older Workers, we have launched a promotional campaign entitled "Tap on the Wealth of Experience" to highlight and promote the invaluable experience of our older workers to the employers, and to encourage the employers to tap on the wealth of experience of older workers, to hire and retain them, through a series of publicity efforts which are still ongoing.

With regard to the extension of the re-employment age, I think we have said that the Tripartite Committee is in discussion to consider the extension of the re-employment age from 65 to 67. On when we will do it and how we will do it, we are working to wrap up discussions and we will announce the outcome of the discussions soon. In the meantime, I want to encourage employers to continue to offer employment to the older workers beyond the age of 65, as long as they are able and willing to continue to work.

Thank you, Mdm Speaker. I would like to ask the Senior Minister of State this: while numbers are important and while we have achieved our target of 65% employment rate, but what is the quality of the employment? Are we doing any studies or looking in terms of the quality of the employment provided to the senior citizens, as well as whether they are happy with it, and what else can we do to improve that?

I thank the Member for his question. As I have said, we are not resting on our laurels. We have reached 65% in June 2013 but as I have noted earlier, we are continuing to proactively engage employers through various means, as well as through publicity campaigns. We will continue to look at how we can encourage employers to retain, as well as hire older workers.

Given the tight labour market situation, you would find that many employers are coming forward to say that they are willing to employ older workers as long as they are able and willing to work. Through WorkPro, for instance, we are helping the employers to re-design their jobs as well as work environment to adapt to the ageing workforce.

Regarding the quality of work, yes, we are very concerned. We want to make sure that Singaporeans will have access to good quality and good-paying jobs, and that is why our

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focus has been on lifelong learning and we invest heavily on Continuing Education and Training (CET), so that our workers can continue to upgrade their skills and remain relevant and employable. In fact, Workfare Training Support Scheme is one avenue through which we provide incentives to the low-wage older workers to upgrade their skills, so that they can enhance their employability, as well as get better jobs and better pay, and we will continue to see what we can do.

There has been a recent report saying that 35,000 older workers earn less than $1,000 a month. Can I ask the Senior Minister of State whether the Ministry is concerned whether our older workers are being paid unfairly compared to those doing the same job but who are younger?

There are several initiatives that we have undertaken. I think one of the key ones would be the Progressive Wage Model that NTUC is working on for various sectors. For instance, we have identified the cleaning sector and the idea really is to upgrade the skills of the workers so that they would be paid higher pay based on productivity and ability. We have actually legislated that for the cleaning sector. We are now looking into the security industry and we will also be looking into the landscape industry.

Regarding fair pay for the older workers, as I noted earlier, if we upgrade their skills, they are relevant, and they have the skills that are appropriate to the employers, then the employers ought to be paying them fair market rates. I do not have the details of the 35,000 workers that she has quoted. If she likes, she can submit another Parliamentary Question.