Automatic Wage Cut At 60 Applies Only to Peasants!

makapaaa · Oct 22, 2009

<TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR>Oct 22, 2009
DISCARDING PAY CUT AT 60
</TR><TR>NTUC seeks a pro-worker and pro-business solution
</TR></TBODY></TABLE>

<DIV class=story_text>I REFER to last Saturday's editorial, 'Pay cut at 60 a relic to be discarded'.
The Retirement Age Act allows employers to cut wages of workers reaching age 60 by up to 10 per cent. A key concern raised at the National Trades Union Congress (NTUC) Ordinary Delegates Conference last week was that some employers implement the full 10 per cent wage cut automatically without regard to the company's wage structure and workers' job scope, productivity and performance.
The wage cut was incorporated in the Retirement Age Act at a time when wages were predominantly seniority-based, to help older workers be more competitive and employable. Since the Act came into effect in 1999, the tripartite partners have mounted concerted efforts to move companies progressively from a seniority-based to a performance-based wage system.
Union delegates felt that as wages become more reflective of job values, there is less reason to automatically cut wages by 10 per cent when workers reach 60. In fact, among unionised companies, less than 10 per cent make the full 10 per cent wage cut and 20 per cent make no cut at all.
Even so, the labour movement has not called for a repeal of the wage cut provision in the law because we recognise that not all companies have fully adopted a performance-based wage system.
As expressed by NTUC secretary- general Lim Swee Say at the media briefing last Thursday, the labour movement is seeking a review of the practice.
It calls on each individual company to examine the justification for a wage cut, taking into account the wage structure in the company, as well as the job scope, productivity and performance of its workers. 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 labour movement will work closely with the tripartite partners to find a pro-business and pro-worker way forward.
As Mr Lim said at the media briefing, 'the tripartite partners work on a basis of consensus. We highlight the issue, we build consensus, then we think of ways to implement the consensus'.
Heng Chee How
Deputy Secretary-General,
National Trades Union Congress
Chairman,
NTUC Re-employment Expert Group

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makapaaa · Oct 22, 2009

<TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR>Employers recognise age impact on wages has diminished
</TR></TBODY></TABLE>

I REFER to last Saturday's editorial, 'Pay cut at 60 a relic to be discarded'.
The Singapore National Employers Federation (SNEF) has taken note of the call by the labour movement to review the practice by some companies of reducing wages at 60. SNEF will consult its 2,000 members and the business chambers, and table feedback for discussion among the tripartite partners.
In extending the retirement age from 60 to 62, the tripartite partners addressed the cost impact of retrenchment benefits, seniority-based wages and medical and employee benefits. Feedback from the business community was that overall wage costs should be reduced after 60 to support the extension of the retirement age. Across the Organisation for Economic Cooperation and Development (OECD) countries, there is some evidence of a negative impact of seniority wages on employment opportunities for older (male) workers.
The purpose of the wage reduction measure at 60 was to strengthen the employability of workers in the same company. Feedback showed that when a worker who retired at 60 switched companies, he was likely to take a wage cut of 20 to 25 per cent.
According to a Ministry of Manpower survey, the maximum-minimum salary ratio for rank-and-file workers has narrowed to 1.58 as at December last year. Wage formation in small and medium-sized enterprises is less structured and wages may still continue to reflect loyalty, experience and age.
However, we recognise that generally, the impact of age on wages has diminished over the years.
According to an SNEF survey of 340 companies in 2005, only 15 per cent cut wages at 60. Thus, it is not correct to say in the editorial that employers have embraced this practice fully and with alacrity. In fact, legislation removed acrimony between employers and employees when discussing wage cuts at 60.
Companies that have not reduced salaries at 60 have assessed that their wage levels reflect the value of the worker's contributions and of the job. We will examine why some companies continue to reduce wages at 60 in order to continue to employ their workers. This will provide us with a more objective basis for a review of the practice.
Koh Juan Kiat
Executive Director
Singapore National Employers Federation

halsey02 · Oct 22, 2009

The man who never got into parliament in Hougang , but came in through the GRC window..is talking...

the man is talking out loud......fool on the hill...

Watchman · Oct 22, 2009

Automatic Wage Cut At 60 Applies Only to Peasants!

makapaaa

Alfrescian (Inf)

makapaaa

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halsey02

Alfrescian (Inf)

Watchman

Alfrescian

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