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A Straits Times editorial on Christmas Day last year talked about businesses re-hiring employees who pass the official retirement age of 62. These older workers are, however, often discriminated against. Way before the Straits Times weighed in on the issue, the Singapore Democrats highlighted this abusive practice.
In our alternative economic programme titled It’s About You which we launched in 2010, we related the story of Benny Lim (not his real name) who was working at a Government-linked company (GLC).
When Benny Lim reached 62, he was told that he could continue working after retirement – under a revised contract. His salary was cut, his annual leave was reduced to 9 days from 14 (with the prospect of it being increased by one day for every three years of service thereafter), and his medical coverage was slashed by 50 percent.
Effectively, Benny was continuing his job as he had been doing before his 62nd birthday. His employer was simply making the worker continue with less pay and worse benefits. In some cases, pay is docked by as much as 30 percent after the re-hiring.
Why does the company do this? Because it can. Every cent that it squeezes out from its workers, in this case the older ones, means that it can add to its profit-margin.
In the meantime, the trade unions go along with such a predatory practice.
Already, these workers have sunk most of their CPF savings into costly HDB flats leaving precious little to retire on. And when they have to struggle on during their retirement years, they are left with little protection.
The Straits Times editorial, perhaps not surprisingly, lauds the system. It says that, “The long gestation period, countless seminars, workshops and feedback sessions have ensured that the law (for re-hiring retired workers) has been dissected and thoroughly discussed.”
In the next breath, however, the editor admits that,
There still are, unfortunately, unenlightened human resources and top executives who take the attitude that employees who hit 62 should be grateful they are being offered the prospect of continued employment..
Archaic thinking that once an employee crosses the line at age 62, he somehow becomes less able on the job has no place in today’s landscape. Embracing re-employment does not mean employers should be allowed to get away with re-hiring on the cheap.
The question seems to be not whether the law protecting elderly workers has been “dissected and thoroughly discussed” but rather if it adequately provides against exploitation and abuse of these workers.
What the Straits Times ignores is the fact that the Government that needs to look after the welfare of older workers is the same Government that employs these people through the GLCs.
Simply shifting the onus to employers to behave in an ethical manner without pushing the Government to enact laws to stop the abuse at the work place will not help our elderly workers. Their plight will continue.
This is the tragedy of the Singapore system. It is one where the state can, and often does, exploit the people in order to raise profits. Whether we can raise productivity by cultivating a secure and happy workforce is another question altogether.
Employers should not re-hire on the cheap
The Straits Times
25 Dec 11
WITH a week to go before the Jan 1 start-date of Singapore’s new re-employment law, it appears that the idea of keeping employees on the job beyond the retirement age of 62 has taken root.
First mooted in 2006, there has been a meeting of minds among Government, most private sector bosses and the labour movement about the need to encourage re-employment as a response to the twin challenges posed by a fast-ageing workforce and longer life expectancy. It is the necessary and logical solution if the economy is to continue to grow steadily without having to over-rely on foreign workers to get the job done.
The long gestation period, countless seminars, workshops and feedback sessions have ensured that the law has been dissected and thoroughly discussed. And thanks to such efforts, most companies have incorporated re-employment as part of their human resources DNA.
Another positive of the long run-in period is the awareness that has been created among would-be retirees in the workforce of the re-employment option that bosses must offer to those who are fit and capable – although companies are not bound to give them the same job or similar wages as before.
But in the implementation of the measures, it is evident that salary levels and medical benefits remain critical sticking points of the re-employment process. There still are, unfortunately, unenlightened human resources and top executives who take the attitude that employees who hit 62 should be grateful they are being offered the prospect of continued employment.
Then there are others who take a safe route by largely mirroring practices of the public service – where salaries for the re-employed can be as much as 30% lower, and corresponding adjustments to medical benefits effectively place greater responsibility on employees to ensure they are adequately covered.
To be sure, there will be companies and industries where these terms are eminently suitable, and will be mutually beneficial to the parties concerned. But companies that blindly adopt the approaches of others as a template merely to fulfil their obligations are doing their employees a major disservice.
Re-employment guidelines allow a fair degree of flexibility of terms and conditions. And, yes, firms should take the circumstances of their industry and the economy into account. Archaic thinking that once an employee crosses the line at age 62, he somehow becomes less able on the job has no place in today’s landscape. Embracing re-employment does not mean employers should be allowed to get away with re-hiring on the cheap.