Retirement and Re-employment Act
Since 1 January 2012, the Retirement Age Act (RAA) has been replaced by the Retirement and Re-employment Act (RRA).
Like the RAA, the RRA also covers all employees who are Singapore Citizens and Permanent Residents.
Under the RRA, the statutory minimum retirement age is still 62, but employers are now required to offer re-employment to eligible employees who turn 62, up to the age of 65.
Eligibility for re-employment
Employees who are Singapore Citizens or Permanent Residents are eligible for re-employment upon reaching the age of 62, if they meet the following criterion:
- are assessed by their employer to have at least a satisfactory work performance; and
- are medically fit to continue working.
The RRA would, however, not apply to certain categories of employees who have been exempted by the Minister for Manpower under the Act.
Re-employment Terms and Contracts
Employers are required to offer re-employment contracts of at least one (1) year, renewable up to age 65. To provide greater certainty for employees, employers are advised to offer a three-year re-employment contract till 65 at one stretch.
Employees' Salary and/or Benefits
Employees’ salary and/ or benefits should only be adjusted based on reasonable factors such as their new duties, responsibilities, productivity, performance and the existence of seniority-based wage system which imposes heavy cost burden of re-employing older employees.
Employers and employees may negotiate on the terms of re-employment making reference to the Tripartite Guidelines on Re-employment of Older Employees.
Employment Assistance Payment (EAP)
To enable eligible employees to continue contributing to their organisations upon retirement, employers should consider all available re-employment options within their organisations and identify suitable jobs for eligible employees.
The legislation requires employers to offer eligible employees a one-off Employment Assistance Payment (EAP), as the last resort, if they are unable to find suitable jobs within the organisation after a thorough review. The purpose of the EAP is to help tide these employees over a period of time while they look for alternative employment.
Avoidance of Re-employment Disputes
In the event of re-employment disputes, it is recommended that employers carry out the process of consultation and discussion with their employees early.
For employees, they should make their job preferences known during the re-employment consultation process and in the case of employers, they are advised to refer to the Tripartite Guidelines in making re-employment offers.
Employers should also ensure that the employees concerned are offered fair employment terms and conditions, as well as reasonable job arrangements upon re-employment. At the same time, employees are encouraged to be flexible and keep an open mind to any possible changes to their job arrangements or employment terms.
Avenues and Procedures of Seeking Assistance
In the event of re-employment disputes, employers and employees should work together to resolve any differences.
An employee can also:
- Seek the union’s advice and assistance (if the employee is a union member);
- Notify the Commissioner for Labour (COL) in writing:
- No later than 1 month after the last day of employment if he is not offered re-employment and if he disputes the employer’s grounds for not offering re-employment including not meeting the re-employment eligibility criteria of satisfactory work performance and medically fitness, no suitable job vacancy or dismissal during re-employment; or
- No later than 6 months after the last day of employment if he feels that the terms and conditions of the re-employment offer and/ or the Employment Assistance Payment (EAP) amount offered is/ are unreasonable.
Any such notification to the Commissioner for Labour (COL) may be made via i) e-mail, ii) letters, iii) in person at the Ministry of Manpower or iv) the Re-employment Dispute Notification Online. The notification should include relevant details of the re-employment dispute with supporting documents, if any. Employment/ personal details including name, contacts, position held, job description, length of service, re-employment terms offered by the employer and etc, if applicable.
MOM Contact Details
To : COMMISSIONER FOR LABOUR
Ministry of Manpower
Labour Relations and Workplaces Division
1500 Bendemeer Road
Ministry of Manpower Services Centre
Recommendations under Tripartite Guidelines on Re-employment of Older Employees
The Tripartite Guidelines on the Re-employment of Older Employees, which have been gazetted as part of the RRA, provide guidance to help employers implement the new legislation.
Below summarises some key recommendations under the Tripartite Guidelines:
- Planning and Preparing Employees for Re-employment
The Tripartite Guidelines, to facilitate the implementation of re-employment, recommend that employers should prepare their employees for re-employment by doing the following:
- Identify eligible employees for re-employment. Employers should aim to make every effort to re-employ their older employees who attain the age of 62.
- 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 unions.
- Make job arrangements for re-employment. Employers should offer re-employment to eligible employees, taking into account their prior discussions with the employees. 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 re-employment arrangements.
- The Re-employment Contract
The Tripartite Guidelines recommend employers to offer re-employment contracts to eligible employees at least three (3) months before retirement. For employees who do not qualify, employers should inform them at the earliest possible time so that they can better prepare for retirement or seek other employment opportunities.
- Recognising the Contributions of the Re-employed Employees
Re-employed employees form an integral part of the organisation. Employers should 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, similar to other employees in the organisation.
- Assisting Eligible Employees whom Employers are Unable to Re-employ
The Tripartite Guidelines recommend that EAP should be a last resort for employers who cannot offer re-employment despite their best efforts. The EAP amount could be 3 months of salary. A minimum amount of $4,500 and a maximum amount of $10,000 could be considered. As for employees who have been employed for at least 18 months, a lower EAP amount of 2 months of salary could be considered, with a minimum amount of $3,000 and a maximum amount of $7,000.
In addition to the EAP, employers are encouraged to provide outplacement assistance to help eligible employees whom they cannot re-employ find alternative employment.
Tricom recommends promoting extension of re-employment age from 65 to 67
In September 2014, the Tripartite Committee on Employability of Older Workers (Tricom) recommended that the Government encourage employers to voluntarily raise the re-employment age from the current 65 to 67 years old.
The tripartite partners have issued a Tripartite Advisory on Re-employment of Employees from Age 65 to 67 to guide employers who do so.
Special Employment Credit - Additional offset of up to 3% of wages to support Voluntary Re-employment
Employers who voluntarily re-employ older workers aged 65 and above will receive an additional offset of up to 3% of an employee’s monthly wages through the SEC. The SEC enhancement would help manage employers’ overall costs and encourage employers to voluntarily re-employ older workers aged 65 and above.
You can find out more at the SEC website.
To download the full set of the Tripartite Guidelines on Re-employment of Older Employees and for more information on re-employment, you may visit www.age-mgt.com