<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published October 16, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Wage cut quantum under review
10% wage cut beyond age 60 may be unfair to some workers: Swee Say
By CHEN HUIFEN
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) The wage cut quantum that employers can impose on workers when they reach 60 - if they wish to extend their employment - is being reviewed by the tripartite partners, according to labour chief Lim Swee Say.
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</TD></TR><TR class=caption><TD>Mr Lim: NTUC is still having discussions with its tripartite partners to reach a consensus on how to better resonate with the 'spirit' of the performance-based wage system</TD></TR></TBODY></TABLE>Recognising that with more companies moving from a seniority-based to a performance-based wage system, the maximum wage cut quantum may be unfair to workers on the latter, he said at the summing up of the NTUC Ordinary Delegates' Conference debate yesterday.
Under the Retirement Age Act, employers wishing to re-hire workers beyond the age of 60 are given the discretion to reduce their wages by up to 10 per cent, taking into account the value of job performed. According to the Ministry of Manpower website, the reduction may be 'a direct cut in salary or a combination of wage cost items such as fringe benefits, variable bonus, annual wage supplement (AWS) and basic salary'.
However, the 10 per cent quantum was agreed on at a time when the wage system here was largely seniority-based, with the average ratio between the minimum and maximum wages (min-max ratio) at a high of 2.1.
'But the understanding was that, once the min-max ratio was narrowed, that means it's more reflective of the value of the job, there is less reason to cut by 10 per cent,' NTUC assistant secretary-general Halimah Yacob said at a news conference after Mr Lim's speech.
'So therefore, based on that kind of understanding, the underpinning of that 10 per cent, the delegates have asked that this be reviewed if the new legislation (to raise retirement age to 65) comes on stream in 2012,' she said.
Mr Lim said union leaders have worked with management over the years to bring the min-max ratio to under 2 today. Some companies have already reduced the ratio to as low as 1.3 and a few, such as PUB and Senoko Power, have not cut wages at all when extending employment beyond 60.
But in most cases, companies re-hiring older workers tend to cut the wages by the full 10 per cent quantum.
NTUC is still having discussions with its tripartite partners to reach a consensus on how to better resonate with the 'spirit' of the performance-based wage system. The outcome of the review may be reflected in the tripartite guidelines or in new legislation.
</TD></TR></TBODY></TABLE>
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Wage cut quantum under review
10% wage cut beyond age 60 may be unfair to some workers: Swee Say
By CHEN HUIFEN
<TABLE class=storyLinks border=0 cellSpacing=4 cellPadding=1 width=136 align=right><TBODY><TR class=font10><TD width=20 align=right>
</TD><TD>Email this article</TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Print article </TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) The wage cut quantum that employers can impose on workers when they reach 60 - if they wish to extend their employment - is being reviewed by the tripartite partners, according to labour chief Lim Swee Say.<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>Mr Lim: NTUC is still having discussions with its tripartite partners to reach a consensus on how to better resonate with the 'spirit' of the performance-based wage system</TD></TR></TBODY></TABLE>Recognising that with more companies moving from a seniority-based to a performance-based wage system, the maximum wage cut quantum may be unfair to workers on the latter, he said at the summing up of the NTUC Ordinary Delegates' Conference debate yesterday.Under the Retirement Age Act, employers wishing to re-hire workers beyond the age of 60 are given the discretion to reduce their wages by up to 10 per cent, taking into account the value of job performed. According to the Ministry of Manpower website, the reduction may be 'a direct cut in salary or a combination of wage cost items such as fringe benefits, variable bonus, annual wage supplement (AWS) and basic salary'.
However, the 10 per cent quantum was agreed on at a time when the wage system here was largely seniority-based, with the average ratio between the minimum and maximum wages (min-max ratio) at a high of 2.1.
'But the understanding was that, once the min-max ratio was narrowed, that means it's more reflective of the value of the job, there is less reason to cut by 10 per cent,' NTUC assistant secretary-general Halimah Yacob said at a news conference after Mr Lim's speech.
'So therefore, based on that kind of understanding, the underpinning of that 10 per cent, the delegates have asked that this be reviewed if the new legislation (to raise retirement age to 65) comes on stream in 2012,' she said.
Mr Lim said union leaders have worked with management over the years to bring the min-max ratio to under 2 today. Some companies have already reduced the ratio to as low as 1.3 and a few, such as PUB and Senoko Power, have not cut wages at all when extending employment beyond 60.
But in most cases, companies re-hiring older workers tend to cut the wages by the full 10 per cent quantum.
NTUC is still having discussions with its tripartite partners to reach a consensus on how to better resonate with the 'spirit' of the performance-based wage system. The outcome of the review may be reflected in the tripartite guidelines or in new legislation.
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