SINGAPORE - With more companies now paying workers based on performance rather than seniority, the labour movement feels it's time to review the need for a provision that lets employers dock 10 per cent off a worker's salary when he or she is re-employed upon hitting the retirement age.
The cut was introduced when the retirement age was officially
raised to 62 - back in 1999, most companies were still paying workers
based on seniority.
But it was also understood then that there would be "less reason"
for the cut when more employers moved towards performance-based pay,
said NTUC deputy-secretary general Halimah Yacob on Thursday.
"Therefore, based on that understanding, the delegates have asked
that this be reviewed in the new legislation (the Re-Employment Act)
coming onstream in 2012, and also in the tripartite guidelines that we
will be formulating," she said.
The tripartite partners are likely to announce their guidelines on re-employment at the end of this year.
Of the unionised companies, more than 700 are committed to
re-employment, and more than 5,000 workers have been re-employed. About
20 per cent of the firms do not cut wages when a worker is re-employed.
- TODAY/ir