The Bosses have been urged to be fair. If the older
workers' pay are docked, it is because they are unfair,
bad bosses or a combination of both.
http://business.asiaone.com/Business/News/Office/Story/A1Story20091026-175948.html
Pay cut at 60 option stays, but bosses urged to be fair
Tue, Oct 27, 2009
The Straits Times
By Clarissa Oon, Senior Political Correspondent
The Government will not remove employers' legal option to cut a worker's pay at age 60, but Manpower Minister Gan Kim Yong wants bosses to show fairness and flexibility.
Weighing in on the issue after the labour movement's call to review the longstanding practice, he agreed yesterday that companies should not automatically resort to a 10 per cent salary cut - the maximum allowed by law - without considering a variety of factors.
If an employee is still paid according to a seniority-based wage system and has achieved a high salary simply because of his age, there may be reason for a cut at age 60, he said.
But he noted that many companies have moved away from such a system - where salaries were determined largely by length of service - to one that is performance-based.
That being the case, bosses must look at factors like the job held, performance and productivity when determining an older worker's pay.
Among the labour movement, business and government, 'the basic consensus is that wages should not be determined by age but should really depend on the job scope, performance and productivity of workers', he emphasised.
As the population ages, the tripartite partners want to create the right environment for more workers above 62 to remain in the workforce, he told reporters on the sidelines of a community event.
Guidelines for re-employing workers past the current retirement age of 62 are due to be produced by the National Trades Union Congress, Government and employers' groups by the end of the year.
These aim to ensure companies exercise flexibility and fairness in designing jobs and remunerating older employees. Come 2012, a new law will require firms to offer to re-employ workers beyond age 62.
But this re-employment legislation will not replace the Retirement Age Act - in force since 1999 and giving bosses discretion to reduce the wages of workers above 60 to ease the cost of employing them.
Noting that re-employment and retirement were different, Mr Gan explained: 'If you raise the retirement age, the worker has to continue in the same job, at the same pay. There's a lot of rigidity.'
With re-employment, 'the employer does not have to offer exactly the same job at exactly the same pay. So it is open to discussion between employer and employee'.
The NTUC, through labour chief Lim Swee Say, had not sought a repeal of the law's wage cut provision but urged a rethink of the practice at a conference earlier this month.
Reiterating this in a letter to The Straits Times last week, deputy secretary-general Heng Chee How said that as wages better reflect job values, there was less reason for an automatic 10 per cent wage cut at 60.
'Even if a wage cut is justifiable, it need not be the full 10 per cent as we continue to progress towards a performance-based wage system.'
The NTUC and Mr Gan recognised that not all firms switched to a performance-based wage system.
Mr Gan said this takes time. He noted how the diversified Sime Darby group initially cut older workers' pay by 10 per cent, but stopped doing so after 2006.
The group's regional head of human resources Nelson Lee said: 'We don't think older workers are less productive. It's fairest to look at performance-based appraisal for all employees, whether young or old.'
This article was first published in The Straits Times.
workers' pay are docked, it is because they are unfair,
bad bosses or a combination of both.
http://business.asiaone.com/Business/News/Office/Story/A1Story20091026-175948.html
Pay cut at 60 option stays, but bosses urged to be fair
Tue, Oct 27, 2009
The Straits Times
By Clarissa Oon, Senior Political Correspondent
The Government will not remove employers' legal option to cut a worker's pay at age 60, but Manpower Minister Gan Kim Yong wants bosses to show fairness and flexibility.
Weighing in on the issue after the labour movement's call to review the longstanding practice, he agreed yesterday that companies should not automatically resort to a 10 per cent salary cut - the maximum allowed by law - without considering a variety of factors.
If an employee is still paid according to a seniority-based wage system and has achieved a high salary simply because of his age, there may be reason for a cut at age 60, he said.
But he noted that many companies have moved away from such a system - where salaries were determined largely by length of service - to one that is performance-based.
That being the case, bosses must look at factors like the job held, performance and productivity when determining an older worker's pay.
Among the labour movement, business and government, 'the basic consensus is that wages should not be determined by age but should really depend on the job scope, performance and productivity of workers', he emphasised.
As the population ages, the tripartite partners want to create the right environment for more workers above 62 to remain in the workforce, he told reporters on the sidelines of a community event.
Guidelines for re-employing workers past the current retirement age of 62 are due to be produced by the National Trades Union Congress, Government and employers' groups by the end of the year.
These aim to ensure companies exercise flexibility and fairness in designing jobs and remunerating older employees. Come 2012, a new law will require firms to offer to re-employ workers beyond age 62.
But this re-employment legislation will not replace the Retirement Age Act - in force since 1999 and giving bosses discretion to reduce the wages of workers above 60 to ease the cost of employing them.
Noting that re-employment and retirement were different, Mr Gan explained: 'If you raise the retirement age, the worker has to continue in the same job, at the same pay. There's a lot of rigidity.'
With re-employment, 'the employer does not have to offer exactly the same job at exactly the same pay. So it is open to discussion between employer and employee'.
The NTUC, through labour chief Lim Swee Say, had not sought a repeal of the law's wage cut provision but urged a rethink of the practice at a conference earlier this month.
Reiterating this in a letter to The Straits Times last week, deputy secretary-general Heng Chee How said that as wages better reflect job values, there was less reason for an automatic 10 per cent wage cut at 60.
'Even if a wage cut is justifiable, it need not be the full 10 per cent as we continue to progress towards a performance-based wage system.'
The NTUC and Mr Gan recognised that not all firms switched to a performance-based wage system.
Mr Gan said this takes time. He noted how the diversified Sime Darby group initially cut older workers' pay by 10 per cent, but stopped doing so after 2006.
The group's regional head of human resources Nelson Lee said: 'We don't think older workers are less productive. It's fairest to look at performance-based appraisal for all employees, whether young or old.'
This article was first published in The Straits Times.
