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Singapore – Bosses open to upping re-employment age, business groups more wary

21 November 2014

Despite warnings from business groups that the legislation could raise employers’ costs, companies have shown a general acceptance of new legislation to raise the re-employment age from 65 to 67 in early 2016, reports The Straits Times

Under the Retirement and Re-employment Act (2012), employers must offer retirement age workers, who are healthy and have a satisfactory job performance record, the opportunity to extend their work contracts for at least one year. Employees who are Singapore Citizens or Permanent Residents are eligible for re-employment upon reaching the age of 62 and, at present, up to the age of 65.

In a call with Halimah Yacob, head of the People’s Action Party Seniors Group and Speaker of Parliament, earlier this week, business leaders seemed relatively unconcerned about raising the upper limit of re-employment to 67.

Edlan Chua, head of a restaurant chain, said: “I don’t see any big issue from raising the age by another two years. It’s not that much of a difference, especially in a tight labour market.”

Soh Chee Keong, Chief Executive of a facilities management firm, added: “Nowadays, it’s hard to get skilled electrician and carpenters, so if the law encourages them to stay on and they can do the work, why not?”

Companies and sectors, especially those shunned by young workers, often have to rely on older workers. At one recycling company, for example, more than a third of its workers are over the age of 55.

The general manager of a renovation firm added: “Our older workers often take less medical leave than our younger staff.”

Business groups, however, fear that changing the law could lower productivity, and that employers are not being given enough time to accept and implement any required changes.

Kurt Wee, President of the Association of Small and Medium Enterprises (ASME) said: “Between your early 60s and late 60s there can be a difference in the amount and quality of work you put in.”

Also of concern is the way in which the government has chosen to implement the legislative changes.

At the beginning of October 2014, Singapore’s Tripartite Committee on Employability of Older Workers (Tricom) recommended that the government adopt a promotional approach towards raising the re-employment age from 65 to 67 years old.

Tricom also recommended that the government provide incentives to encourage companies to re-employ their older workers beyond the age of 65 in the interim, before the legislation kicks in.

Following the announcement in October, Stephen Lee, Immediate Past President of the Singapore National Employers Federation added: “Employers have expressed concerns about legislating the re-employment of workers beyond the age of 65 too soon. In 2012, the law was introduced after five years of promotional effort and employers had been well prepared to manage this three-year obligation of re-employing workers from the age of 62 up to the age of 65… Employers need to make the effort where necessary to restructure their wage system or to redesign jobs so that they can fulfil their extended re-employment obligations from age 62 to 67.”

AMSE, however, believes that the government incentives to coax companies into raising the re-employment early, which will not be outlined until next year, will not be very effective.

Mr Wee also believes that 2016 is too early, and that either 2017 or 2018 would be a more reasonable deadline for implementing the new law.