Re-employment
The Government will enact re-employment legislation by 2012 to enable more people to continue working beyond the current statutory retirement age of 62.
To prepare employers and employees for the re-employment legislation, the Tripartite Implementation Workgroup has released the Tripartite Guidelines on the Re-Employment of Older Employees. Employers should consider adopting the following practices in order to be ready for the new legislation:
Prepare their employees for re-employment
Employers should prepare their employees for reemployment by doing the following:
- Identify eligible employees for re-employment. Employers should aim to re-employ the majority of their older employees.
- Engage employees on re-employment issues as early as possible, no less than six months prior to re-employment. Unionised companies should also consult their respective unions.
- Make job arrangements for re-employment. Employees should also keep an open mind about re-employment options presented by the employer. This will allow employees and employers to reach mutually agreeable arrangements.
About re-employment terms and contracts
Employers should offer re-employment contracts to eligible employees at least three months before retirement. For employees who do not qualify, employers should also inform them at least three months before retirement, so that they can better prepare for retirement or seek other employment opportunities.
To provide greater certainty for employees, employers should offer them three-year re-employment contracts, up to the age of 65. Employers could also reemploy on a term contract of at least one year, renewable up to age 65.
Employers and employees are encouraged to be flexible in negotiating reemployment.
Where employees who are re-employed have served the organisation over the years and have performed satisfactorily, they should not be required to serve the minimum qualifying period to be eligible for employment benefits such as annual leave and sick leave.
Wages could be adjusted down taking into account the employee’s productivity, performance, responsibilities, any earlier reduction made when an employee reached 60 years of age, etc.
Where medical costs are a concern, employers may wish to consider co-payment, appropriate caps on medical benefits claimable, or providing additional Medisave contributions.
Where employees who are re-employed have served the organisation over the years and have performed satisfactorily, they should not be required toserve the minimum qualifying period to be eligible for employment benefits such as annual leave and sick leave.
Recognise the contributions of re-employed employees
Employers should recognise that re-employed employees are an integral part of the organisation. They should, where appropriate, continue to reward re-employed employees based on company and individual performance in the form of performance bonuses, long service benefits, gain-sharing incentives or one-off bonuses.
Assist eligible employees whom employers are unable to re-employ
To enable eligible employees to continue to contribute to the organization upon retirement, employers should consider all available re-employment options within their organization and identify suitable jobs for eligible employees. Employers who cannot find suitable jobs for eligible employees should inform their employees as early as practicable.
Employers should offer eligible employees a one-off Employment Assistance Payment (EAP) if they are unable to find suitable jobs for them. This is to tide these employees over a period of time while they look for alternatives
It is recognised that it would be more difficult for employers to re-employ senior management staff due to the need to facilitate leadership renewal and organisational change. As senior management staff have more options than other employees, the EAP would be an appropriate alternative if re-employment is not feasible.
In addition to the EAP, employers are encouraged to provide outplacement assistance to help eligible employees whom they cannot re-employ find alternative employment.
Employees who are re-employed have already reached the statutory (or contractual) retirement age, so the issue of retrenchment benefits does not arise. However, as this group of employees would find it difficult to secure new jobs if they are retrenched, employers should offer financial assistance (using EAP as a reference) to help tide them over while they look for alternative employment.
Tripartite Guidelines on the Re-Employment of Older Employees
Details of the Tripartite Guidelines on the Re-Employment of Older Employees can be found on the Re-Employment of Older Employees Portal.
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