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SINGAPORE: Hiring older workers beyond the age of 62 will become part of Singapore's employment laws within the next five years.
That is a recommendation of a tripartite committee studying the issue of employing older workers in an ageing workforce.
The provision could be incorporated into existing laws or as a new piece of legislation.
Besides that, the authorities say the public and businesses must accept the idea of workers working longer years.
There have been significant improvements in the employment rates for older workers, says the tripartite committee.
In 2006, 40,000 more older people were employed.
And by end-March this year, 411 companies had adopted age-friendly employment practices.
But there is a need for a holistic approach to intensify efforts to enhance the employability of older workers.
So in its final report, the committee recommended that low wage income workers above 55 years old, receive a higher Workfare Income Supplement payout when the scheme is reviewed in three years.
It has also proposed that the ADVANTAGE! scheme be enhanced to lend greater support to companies to recruit and retain older workers.
It is proposed an increased funding of up to S$400,000 per company, up from S$300,000 previously.
The committee's most significant proposal is that Singapore legislate the employability of older workers within the next five years.
This after the committee had studied the Japanese model of re-employment legislation.
The Japanese model offers employers three options: Raise the company's mandatory retirement age 60 to age 65, adopt a re-employment system under which workers, upon reaching retirement age 60 can be re-employed to work until the age of 65 or remove the mandatory retirement age system all together.
Minister of State, Manpower, Gan Kim Yong, "The Japanese system is very flexible. There are some managers who reach their retirement age and under the system they were re-employed but they were assigned to different jobs, a job that he finds suitable and the employers also find suitable.
"And some managers may prefer to have more flexible hours and some of them their salaries and terms would be adjusted to reflect the contribution to the employer. This flexibility is the key attraction to us.
"The key is to ensure enough flexibility in the system and to persuade the employers on the mindset change, so that they would see this as a value proposition."
However, employers have two key concerns.
Says Stephen Lee, President, National Employers' Federation, "One is that such a move must make economic sense to the company. The second point is such a move should not hamper the renewal of the company itself…by keeping older workers longer, you are not slowing down the renewal process.
"We are very glad to see that the committee has taken a flexible approach, without being overly prescriptive. Perhaps if we can make very good progress, in the end the piece of legislation could be a softer piece of legislation."
And it is not just local companies that have to address the issue of employing older workers.
Says Alexander Melchers, VP, Singapore German Chamber of Industry and Commerce, "European foreign companies in Singapore account for more than 40 per cent of employment and we are as concerned as Singaporean companies.
For larger companies they need to change the HR systems, for smaller companies they need to change more the mindset than anything else because they don't have the relevant HR systems. It's a positive thing, we give it some time, we work towards the target."
The government is giving itself a five-year period before deciding on the final form of legislation, so as to assess the progress made by companies in employing older workers.
The five-year period will also give the government enough time to take stock of prevailing economic conditions and ensure that whatever law is decided, it is able to withstand any downturn, when it does come.
In the meantime, the report says before introducing legislation, a revised set of tripartite guidelines could be introduced to guide and help facilitate companies in re-employing workers beyond age 62.
And when the new provisions come into force, the labour movement will be kept busy, updating collective agreements.
NTUC says in 2006, 40 per cent of current collective agreements contained clauses expressly providing opportunities for employees to work beyond the age of 62.
These collective agreements covered almost 40,000 workers.
Also 36 banks have collectively introduced a clause on re-employment of their retired staff in the collective agreement with two banking industry unions.
Says John De Payva, President, NTUC, "We would need to come up with some provisions that we can then include in our collective agreement and subject that to negotiations with employers of unionised companies and move on from there,
"We are starting at base level, so we need to feel our way our through. We need to appreciate the kind of issues that employers are confronting themselves with, arising out of these guidelines.".
The government has accepted the Tripartite Committee's recommendations.
To co-ordinate and oversee implementation of the recommendations, the Committee will continue its work for another five years.
It will work towards raising the employment rate for residents aged 55 to 64 to the medium-term target of 65 per cent.
The Committee will also work closely with the Ministerial Committee on Ageing to tackle the issues of an ageing population in a holistic manner. - CNA/yy
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