- Why did the Government decide to enact re-employment legislation and not raise the statutory retirement age?
- How will the Government help employers in the lead up to 2012 when re-employment legislation takes effect?
- How is an employee considered to be “medically fit to continue working”?
- What is considered to be “satisfactory performance” by an employee that will qualify him for re-employment?
- What is pre-retirement planning and re-employment consultation?
- If an employer is unable to offer re-employment to an employee who wishes to continue working beyond the age of 62 years, what kind of employment assistance can the employer offer?
- The employer has offered a 1 year re-employment contract to the employee (i.e., till age 63 rather than to age 65). However at the end of the 1 year contract, the company has to downsize and is unable to renew his contract. What should the employer do?
- According to the Advisory, the “mid-point of the salary range of the job” is a “possible reference”. What does this mean?
1. Why did the Government decide to enact re-employment legislation and not raise the statutory retirement age?
Re-employment offers more flexibility than raising the statutory retirement age. It allows the employer and employee to work out an arrangement that takes into consideration their respective needs.
For employers, the re-employment system allows them to tap on a pool of experienced employees in a cost-effective and sustainable way that makes business sense.
Unions and employees also welcome the additional employment opportunities for the older Employees.
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2. How will the Government help employers in the lead up to 2012 when re-employment legislation takes effect?
Companies can tap on the ADVANTAGE! Scheme for assistance. It offers a financial grant of up to $400,000 to support initiatives in implementing HR systems, and changes to working environments and business and operational processes that directly boost the recruitment, retention and re-employment of mature employees. The grant will fund the cost for consultancy or staff salary (pro-rated to direct involvement in implementing the initiatives), equipment and Intellectual Property Rights. The grant, however, cannot be used to subsidise staff holding cost, which includes retention bonus, medical benefits or salary support. Alternatively, companies can approach SNEF and ASME for training programmes to assist them in making adjustments to their HR policies for re-employment. The training programmes are subsidised by WDA.
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3. How is an employee considered to be “medically fit to continue working”?
Medical fitness should be assessed objectively, and in relation to the job requirements. An employee should be considered medically fit to continue working as long as his health will not affect his performance. For example, a worker with a medical condition that has no impact on performance should meet the medical fitness criterion. An employer should not unilaterally deem a worker to be medically unfit to continue working, without a medical assessment.
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4.
What is considered to be “satisfactory performance” by an employee that will qualify him for re-employment?
Satisfactory performance refers to the minimum level of performance any employee is expected to maintain in discharging his duties. In assessing the eligibility of an employee for re-employment, employers may take into account the employee’s performance over the past few years.
5. What is pre-retirement planning and re-employment consultation?
Pre-retirement planning and re-employment consultation involves:
(i) Discussions with employees to help them make plans to maintain their physical, mental, social and financial well-being as they grow older; and
(ii) Engaging retiring employees on their re-employment prospects.
To better prepare employees, this process should take place early, preferably twelve months before the employee reaches retirement age. For more details, please refer to paragraph 5 of the Tripartite Advisory.
6. If an employer is unable to offer re-employment to an employee who wishes to continue working beyond the age of 62 years, what kind of employment assistance can the employer offer?
Employers who are not able to offer re-employment to eligible employees should assist the employee to find employment elsewhere. Placement in subsidiaries or associate companies can be arranged should there be available positions. Employers can also offer employment assistance such as engaging employment agencies to assist employees in seeking employment, or referring employees to other companies with vacancies. In addition, employers could provide funding and time-off for employees to attend training that increases their employment options.
7. The employer has offered a 1 year re-employment contract to the employee (i.e., till age 63 rather than to age 65). However at the end of the 1 year contract, the company has to downsize and is unable to renew his contract. What should the employer do?
The employer should help the employee find employment elsewhere. Please refer to question 6 for more details on the sort of employment assistance employers can offer employees.
8. According to the Advisory, the “mid-point of the salary range of the job” is a “possible reference”. What does this mean?
Salaries should be based on the value of the job and the contribution of the worker. To move towards a job-based and performance-based wage system, companies with seniority-based wage systems may adopt the suggested principles on wage adjustments in the Advisory to determine the wages offered to re-employed employees. For instance, if the salary range of the employee’s current job is $1,500 to $2,500, and the employee is at the top of the salary range, his employer can offer a re-employment wage that is at the mid-point of this range, which is $2,000.
However, employers may, in consultation with employees and with unions where appropriate, deviate from this principle, taking into account the extent of the seniority element in the wage structure. For example, a worker whose current pay reflects the value of his job should continue to receive the same wage if he is re-employed in the same job. In contrast, an employee with his salary built up over the years due to his seniority in service may be offered less than the mid-point of the salary range in order for the re-employment wage to reflect the value of the job accurately.
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