Retirement and Re-employment (Amendment) Bill

Order for Second Reading read.

Mdm Speaker: Minister Lim Swee Say.

5.10 pm

The Minister for Manpower (Mr Lim Swee Say): Mdm Speaker, I beg to move, "That the Bill be now read a Second time."

In 2012, we enacted the Retirement and Re-employment Act (RRA) for our older employees to work beyond the retirement age of 62. Under this Act, employers have to offer re-employment to eligible employees up to the age of 65. If the employer is unable to do so, he has to offer an Employment Assistance Payment (EAP) to the employees to tide them over the period when they are looking for alternative employment.

One key feature of re-employment is that it need not be for the same job or on the same terms. Both the employer and the employee can consult each other and work out mutually agreeable arrangements. Both parties have the flexibility to make changes to the existing job arrangements to suit their needs. Re-employment, therefore, balances the objectives of providing opportunities for employees to work longer on the one hand, while maintaining some flexibility for the employers on the other.

This approach has worked well. The introduction of re-employment in 2012, coupled with the efforts from the tripartite partners to encourage age-friendly workplaces, has made a positive impact on the employment of older Singaporeans.

In 2015, over 98% of private sector local employees who wished to continue working at the age of 62 were offered re-employment. Ninety-eight percent of those who accepted re-employment in the same job also did not experience any cut in their basic wages.

Five years on from 2012, which is 2017 now, Singapore's workforce continues to age. Over the last decade, the proportion of residents aged 60 and above in our labour force has increased from 5.5% in 2006 to 12% in 2015. As we live longer, we can expect this proportion to continue to grow.

Madam, the introduction of the re-employment age of 65 in 2012 was but a first step. The intention to raise the re-employment age to 67 was already announced in 2012. Since then, after extensive consultation and negotiation, the tripartite partners have agreed that we are now ready to take this next step. This Bill makes three key changes to the Retirement and Re-employment Act. First, the re-employment age will be raised from 65 to 67. Second, we will introduce a new option to allow re-employment by another employer. Third, we will remove the existing option of employers to cut wages of employees at age 60.

Madam, I will now elaborate on these three key changes in the Bill. The first key change is that the re-employment age will be raised from 65 to 67 with effect from 1 July 2017. Eligible employees, who are locals with at least satisfactory work performance and who are medically fit, should be offered re-employment until age 67.

The new re-employment age of 67 will apply to those who turn 65 on or after 1 July 2017; in other words, those born on or after 1 July 1952. This is what the tripartite partners agreed to after extensive consultations.

To encourage employers to re-employ employees beyond the re-employment age, which is 65 today, the Government currently provides a 3% additional wage offset. This scheme, the Additional Special Employment Credit (SEC) scheme, benefits about 120,000 Singaporean employees aged 65 and above every year. This is on top of the SEC of up to 8% for employing Singaporeans aged 55 and above.

This additional wage offset will expire on 1 July 2017. The Government is studying the need and manner to further extend it to encourage voluntary re-employment for two groups of Singaporean employees. First, those aged below 67 but not covered by the new re-employment age of 67. Second, those beyond the new re-employment age of 67. We are aware that older employees and their employers need clarity on the future of the scheme. A decision will be taken well ahead of the expiration of the current scheme.

The second key change is to allow eligible employees to be re-employed by another employer to increase options for both the employers and the employees. Madam, we have received feedback from employers who are unable to find suitable jobs in their own companies for their workers. Some of these employers would like to help their older employees secure re-employment with another employer. However, today's law does not allow them to transfer their re-employment obligations to another employer.

So, from 1 July 2017, the law will allow an employer, who is unable to offer a suitable position in his own organisation, to transfer his re-employment obligations to another employer. This change will benefit all three parties. The original employer will be deemed as having fulfilled his re-employment obligations. The employee will have more opportunities to be re-employed and will enjoy re-employment protection under the second employer. The second employer will likewise benefit from hiring an employee with experience.

There will be safeguards put in place to protect these employees. The employee has to agree to the re-employment terms with the second employer, and the second employer has to agree to take over all applicable obligations and re-employment obligations for this employee. If either condition is not met, the original employer still has to fulfil his re-employment obligations. This means that the original employer still has to offer EAP if he cannot find a job for the older employee in his own company.

To prepare employers and employees for these changes, we have worked with the tripartite partners to revise the Tripartite Guidelines on the Re-employment of Older Employees. In particular, we added a new section on re-employment by a new employer to provide guidance on this new option. My Ministry will be issuing the revised Guidelines later today. This will take effect on 1 July 2017. Employers and employees who require more information may direct their queries to the Ministry of Manpower (MOM), the Singapore National Employers Federation (SNEF) or the National Trades Union Congress (NTUC).

Madam, the third key change is to remove an existing employer option to cut employees' wages at age 60. In 1999, this option was introduced to help employers with seniority-based wage systems to manage their wage costs when the retirement age was raised from 60 to 62.

Since then, with the restructuring and reshaping of Singapore's economy, tripartite efforts have been successful in moving employers away from seniority-based wage systems. In 2011, 98.5% of companies with employees aged 60 and over did not reduce the wages of employees at age 60. Hence, the tripartite partners have agreed to remove this option for employers with effect from 1 July 2017.

Madam, the tripartite partners have had extensive consultations on how to build on the existing re-employment model to enhance job opportunities for older employees while balancing the need for flexibility for employers. This Bill is the result of tripartite efforts over the last few years to strike this delicate balance.

We recognise that there are older employees in all sectors and occupations, with different circumstances and needs, therefore, not all of which can be addressed by this Bill. We will, therefore, continue to work closely with our tripartite partners to continue to enhance employment opportunities for older workers and to build age-friendly workplaces in Singapore. Mdm Speaker, I beg to move.

Question proposed.

Mdm Speaker: Mr Patrick Tay.

5.20 pm

Mr Patrick Tay Teck Guan (West Coast): Mdm Speaker, I rise in support of this Bill which will extend the re-employment age from the current 65 to 67 from 1 July this year. Besides this extension, two other key amendments will be effected. First is the repeal of section 5 of the current Act which effectively means abolishing the provision which had allowed employers to reduce up to 10% of salary once an employee reaches the age of 60. Second, an employer who finds suitable employment for an employee, who is supposed to be re-employed, with another employer is considered to have fulfilled his obligation under the Bill.

The extension of the re-employment age is a welcome move by our unions, union leaders, union members and workers as this is what the Labour Movement has been lobbying for. This issue is of urgency and importance, especially with our ageing populace, as it will provide our workers who are keen and able to continue working the opportunity to be re-employed until the age of 67.

I applaud the tripartite partners for their untiring efforts in reviewing and improving the current Act. This set of amendments and the upcoming tripartite guidelines were arrived at through heavy discussions and robust negotiations and will benefit all employees, whether low-wage workers or professionals, managers and executives (PMEs). Although this deck of amendments is a positive step forward, how it is executed and rolled out is vital. I ask that the respective tripartite partners play their part to ensure its success.

On the part of employers, with our tight labour market and stagnating employment growth, employers play the most important role in having not just fair but progressive practices in the hiring of the not-so-young workers, especially the re-employment of workers. In my regular ground engagements with workers, especially PMEs, I still hear of instances where workers are confronted with ageism. Although not rampant and good work has been done by the Tripartite Alliance for Fair Employment Practices (TAFEP), I believe we can do more to not just minimise but eradicate all forms of ageism.

Employers must actively invest in re-thinking how best to re-deploy their mature workers to fully leverage their expertise. It is also imperative for employers to re-design the job and/or workplace to make the job easier, safer and smarter for our ageing workforce. This can be achieved by embracing disruption, technology and innovation through recreating jobs and building up a quality workforce so as to increase productivity and achieve inclusive quality growth.

Second, on the part of the Government. The Government has funded and rolled out a series of initiatives and funding, such as WorkPro, SEC and additional credits to support the hiring of mature and older workers. I urge the Government to continue these schemes and funding, especially those that are due to expire and even enhance them, bearing in mind we are confronted with a silver tsunami.

I have previously raised in this House for the increase of EAP and I am glad that we will be seeing a positive adjustment in this respect. EAP has to be regularly reviewed upwards to keep pace with rising median wages. EAP amounts and abuse must be closely watched and not become an easy tool or a backdoor exploited by employers as an easy way out to absolve themselves of their obligation to re-employ.

I urge MOM to also pay a close watch on any cases of abuse or indiscriminate utilisation of the new provision where employers can transfer the re-employment obligation to another employer and discharge themselves of responsibility. This is especially so when the terms, conditions, environment and nature of work in the new job may vastly differ from what they had been previously employed for.

Third, workers and unions. Workers, too, must play their part by preparing for re-employment and have to continue to do their part to stay ready, relevant and resilient: ready with new skills, relevant to the new jobs and also resilient to new changes.

Mdm Speaker, I support the amendments but we need to rethink re-employment. We must move away from re-employment for the sake of statutory compliance to people development, productivity growth and taking active steps to change stereotypical perceptions on age, talent, productivity and compensation in every organisation. I want to make a special call for our tripartite partners to work closely together to ensure the spirit and intent of these amendments are executed well and thoroughly so as to achieve their desired outcomes.

More importantly, society plays the most crucial role in how we, as one community and one country, view and treat older workers and embrace an ageing population. Not just acknowledging and accommodating the ageing workforce but proactively accepting and appreciating every worker regardless of age! Mindsets of our tripartite partners as well as society need to change. With that, I support the Bill.

Mdm Speaker: Mr Leon Perera.

5.26 pm

Mr Leon Perera (Non-Constituency Member): Mdm Speaker, the Retirement and Re-employment Bill seeks to amend the existing law to raise the re-employment age up to 67 years and to repeal the section which allows employers to reduce the salaries of older workers once they reach 60, among other things.

My colleague, Assoc Prof Daniel Goh, will speak more broadly about this Bill. I would like to confine my comments to one aspect of the employment of older persons which this Bill does not seem to sufficiently address and which is a gap in our current framework of law, regulation and norms in the labour market and, that is, how can we reduce instances of employers legally terminating employees but in a covert way as a result of ageist prejudice.

I would like to ask: if an employee who does not have a mandatory retirement age specified in her employment contract has her employment terminated by the employer, with notice period paid, for the reason that she has reached retirement age, will the provisions of the Bill apply? The language of clause 4, Part I, suggests that this is the case since it states that notwithstanding any law, contract of service or collective agreement, the retirement age should not be less than 62 years and up to 67 years, as prescribed by the Minister. Section 4, Part II, of the existing Act also says that no employer shall dismiss on the ground of age any employee who is below 62 years of age or the prescribed minimum retirement age.

However, this makes it all the more likely that an employer who is terminating an employee for reasons of ageism will not tell this to the employee or leave any paper trail as to the grounds for the termination. There are two scenarios I would like to highlight here. The first is that of an employer who does not wish to offer re-employment on grounds of performance, which is allowed under the Bill, and the second is that of an employer who terminates an employee with notice on ageist grounds because they have become too old but does not state this reason or leave any evidence of this being the reason.

Let me first discuss the first scenario. It would seem to be an escape clause for the employer who wants to invoke the retirement age against the reluctant employee and not offer her re-employment. Clause 4 states that "where an employer does not intend to re-employ an employee past the retirement age because the employee does not either have satisfactory work performance or is not medically fit, the employer must give the employee written notice as far as is reasonably practicable before termination."

Section 8 of the current Act provides some remedies, which is, for the employee to write in to MOM and let MOM decide if they have been unfairly dismissed or denied re-employment. Take, for example, their performance was satisfactory or if the reasonable notice was not provided. I would like to ask what safeguards are in place to ensure that an employee in such a situation will get assistance in presenting her case and that the burden of proof will actually lie with the employer.

To be realistic, if an employer does not offer re-employment on grounds of performance, it may be hard for many employees to defend themselves to MOM, particularly if the company does not practise a system of regular performance reviews with documentary proof of the same, which is the case with many small and medium enterprises (SMEs).

The second scenario I would like to discuss is even more likely and, hence, even more worrying. What if an employer decides to terminate an employee just before she hits the age of 62 or even earlier, on the grounds of ageist prejudice, without invoking the reason of retirement at all, or without invoking the reason of age at all, but simply because they have decided that they can hire someone younger and more cheaply?

There may be safeguards against employers doing this in the case of companies that have collective bargaining employment contracts. But most employees do not fall into this category. For most employees, there is no need for an employer to wait for the retirement age or re-employment age. Legally, they can terminate an employee with notice at any time. In other words, they can involuntarily retire their employees as and when they feel they have become too old.

For most employees, there is no protection against such termination with notice or reasons of ageist prejudice unless it is very easy to prove that. This is because the law does not require the employer to state the reason nor is it easily challenged at MOM if the termination is a legal employment contract termination with notice period paid.

To be sure, I am not arguing that employers should have the ability to terminate with notice eliminated. Employers need to be able to eliminate unnecessary positions as a last resort so as to protect the survival of the company and the jobs of the remaining workers under certain circumstances. Employers also need this in cases of legitimate employee performance issues. My concern is with employers who exercise this right for the wrong reasons − for reasons of ageist prejudice.

No doubt, this is an issue that goes beyond the scope of the current changes to the Act and touches on our framework for dealing with discriminatory employment practices in general. But it is worth noting that this law does not address this possibility. It is a possibility that faces a huge number of workers who may be forcibly retired and, hence, thrown onto a job market where finding good permanent employment for someone in their late 40s or 50s, let alone older, is extremely hard, especially in the current economic climate. This points to a huge gap which the law does not address.

In 2015, there were 8,700 discouraged workers in Singapore who would like to work but had given up looking for a job because they feel that their chances are almost nil, according to the 2015 Labour Force Survey. Sixty-nine percent of those discouraged were aged 50 and over. I suspect that many of these workers would have undergone countless ordeals of sending in applications with no reply, or going for interviews only to be met with rejections or a stone wall of silence until they decided to give up the unequal struggle.

To meet this gap, we should relook at the framework for tackling discriminatory employment practices in general, not only for ageist prejudice but for other forms of prejudice on grounds of gender, race, religion, disability status or ex-offender status, for example. A good starting point would be to get good data from a comprehensive survey of employees, not only of employers, and this is a subject we have discussed in this House last year. We could then look at better carrots for employers who can demonstrate robust and auditable hiring and firing practices that give no quarter to prejudice of any kind. Further down the road, depending on the effectiveness of these measures, as surveys reveal, we could consider introducing sticks against proven and repeated discriminators, as my colleague Mr Faisal Manap argued during the 2016 Committee of Supply debate.

Right now, we have a system where employees can complain to TAFEP and TAFEP can then escalate complaints to MOM which can wield the stick of employment and work pass access as well as moral suasion. However, for companies that are not open to moral exhortations or which do not require Employment Passes or Work Permits, these sticks may be ineffective.

Moreover, going further upstream, there could be many employees who know or suspect that they have been on the receiving end of discriminatory practices but who would not want to complain to TAFEP for many reasons, not only a lack of confidence or timidity but also perhaps a lack of confidence that they could prove their case in a "my word against yours" sort of situation.

As a country, we have a long way to go to shift our labour market norms towards embracing the idea of people working till well into their 60s and perhaps older, if they choose to do so. Such work opens up a crucial vista for self-fulfilment for older Singaporeans who might otherwise be at risk of social isolation. It also gives older people a fair chance to enhance their incomes by earning an honest pay.

As a country, it allows us to raise our total labour force participation and thus staff our industries without adding to the population as much. To move down this path, we need to go much further than this Bill.

Mdm Speaker: Assoc Prof Randolph Tan.

5.35 pm

Assoc Prof Randolph Tan (Nominated Member): Mdm Speaker, I support this Bill. However, I strongly believe that it is necessary at this point in time to speak up about the challenges I believe it brings to the economy.

Until fairly recently, the combination of increasing foreign manpower levies and tighter quota restrictions appeared to have done little to slake the seemingly insatiable appetite of employers for manpower. It was not so long ago that the labour market was assessed to still to be tight and employers bemoaned the impact of unfilled vacancies on their capacity to meet robust demand.

The apparent change in the labour market did not occur overnight. The shifting sands of the global economic landscape, accentuated by volatile energy price movements and trade flows, are nothing new. But what has added to the uncertainty are the disruptive outcomes of high-profile events over the past year. These events hold significant consequences for future trends in global trade, upon which Singapore depends so critically. Singapore has not been slow to anticipate the need to be prepared for such "Black Swan" events. Since the crisis of 2008/2009, the labour market has been undergoing deep change, reorienting away from excessive reliance on foreign manpower.

One prominent result of this reorientation is the remarkable increase in the labour force participation rate (LFPR). The increase in the resident LFPR in recent years has been especially pronounced for two groups, namely, females and older workers. A large share of the credit for this goes to the concerted efforts made by our Government policymakers to expand employment opportunities.

And in order to effect real changes, these efforts have not been sudden nor impulsive, but instead, were implemented in a calibrated fashion over a period of time in order to ensure that relevant stakeholders have time to buy into the changes.

So, instead of simply raising the retirement age, what the Government has opted to do is to expand re-employment opportunities. Everyone's ideal is for workers who are willing and able to work productively to do so without being asked to retire. Madam, although it appears to be a simple matter to remove the retirement age altogether, it is not clear what this implies for contractual commitments that employers have towards their employees.

The retirement age has served to deal with this difficult question all these years, and we will have to take a long, hard look at the deeper implications of doing away with retirement altogether.

In the meantime, given the potential implications of raising the retirement age, it makes sense to focus instead on re-employment. Hence, I support the Government's efforts in this push. But if we take into account the current economic climate, the changes proposed in this Bill have certain important implications.

Raising the retirement age and facilitating re-employment opportunities seem to be natural options to take as a follow-up to the success in raising the resident LFPR, but it is important to recognise that the situation is a lot less straightforward because the impact varies with different groups of workers and different types of employers.

There are many reasons why it is important to expand the opportunities for older persons to work, if they wish to. Foremost among these, of course, is the ageing population, as the Minister has already mentioned. In addition, MOM's statistics report that older residents aged 60 and over accounted for the largest share among age groups with residents outside the labour force. In 2006, 35% of residents outside the labour force were 60 or older; over the decade, this proportion has grown steadily, with the latest reported figure for 2016 showing 44% of residents outside the labour force belonging to this age group. With figures of this magnitude, expanding opportunities for re-employment beyond the current threshold of 65 years is clearly welcomed and necessary.

However, the raising of the re-employment age is just one factor which will tackle this issue. Another important factor is the duration of the employment contracts that employees are on. In June 2007, 25% of resident employees aged 60 and over were on term contracts. Almost a decade later, in June 2015, we still have 21% of resident employees aged 60 and above on term contracts. So, despite the improvement over the intervening period of time, the age-connected pattern in term contracts has remained basically unchanged. Hence, just as in June 2007, the proportion of employees on term contracts was more than twice that of all other age groups for those above 24 years of age. In addition, the proportion of resident employees on term contracts was lowest for those aged 30 to 39, and then increased with the group age thereafter for all the other groups.

As MOM had noted in the past in its 2006 Labour Market report, and I quote, "the incidence of contract employment was higher among the younger and older employees, including those on casual or on-call employment, and was mainly concentrated in the lower skilled jobs, such as cleaning and labouring, sales and service and clerical work." The reality is that this characterisation remains largely valid today.

Is there a concern, therefore, that with the obligations imposed by the re-employment legislation that we see now, more employers may be driven by the strain of the regulatory burden to prefer placing older employees on term contracts?

Re-employment is dependent on employers being in a position of operating health and having the means to retain older workers. Availability of older workers benefit employers by expanding the size of the labour pool. At the same time, they increase competition for jobs. This is why flexibility from both employers and employees is needed in agreeing on re-employment terms.

Significant emphasis on such flexibility was placed on this in the Tripartite Guidelines on the Re-employment of Older Employees that was released in January 2011. Here, I would like to thank MOM for helping to clarify that the repeal of section 5 is not related to the re-employment contract. Nonetheless, section 5 could have been seen, correctly or not, as impacting overall salary adjustments.

I support the decision to repeal section 5. The problem with it is that although it has limited salary cuts of 10%, it was never completely clear, to me at least, whether the limit is taken into account later as part of total adjustments that would be due to job changes agreed in a re-employment contract.

In the longer term, Madam, I believe that these changes are sound. But at the present moment, however, it is not entirely clear what lies ahead for the labour market as the economy confronts the current bout of weakness. We should consider whether we are loading too much on to the economy by expecting it to deliver on multiple fronts, without allowing it more time to adjust at a pace more suited to accommodating the seismic shifts it is experiencing.

One major concern I have about "hardwiring" the obligations of employers further is that it may become an additional burden on them when economic conditions weaken, as we could be seeing.

Over the last few years, the labour market has held up well, due in no small part to the support of various schemes, some of which the Minister has already mentioned. The re-employment push is currently receiving very strong support from the tripartite partners. On its part, in addition to transforming mindsets through its own re-employment practices, the Government also offers substantial wage support through the payment of a Special Employment Credit. Since 2015, employers who voluntarily re-employ Singaporean workers aged 65 and above have been receiving an additional offset of up to 3% of an employee's monthly wages.

But the economy is weak at the moment and employers are facing several challenges. Hence, the Business Times reported yesterday that in the worst performance in five years, last year saw more companies slow to make payment and fewer paying on time. In other words, companies which need to generate jobs are themselves under severe pressure.

The heavy reliance on wage support in recent years could have come at a price. Going forward, the scope for using further wage support to make up for weak labour market demand is diminished, I believe, because they have been in force for some time. If employment conditions weaken further, a heavily legislated employment regime may increase the difficulty that companies face in trying to manoeuvre their way out of a business trough. Why do companies need more room to manoeuvre? There are many signs that the economic conditions of the future will not be the same uniform challenge to all, as we have seen in the past, but could instead consist of a variegated landscape.

At the same time that we see some businesses doing very well, others could face substantially different and very difficult competitive circumstances. As a commentator for the Business Times appeared to suggest last week, and I agree strongly, it could simply be because such companies operate at the confluence of disruptive new phenomena.

America's economic recovery has been replete with such examples over the last few years. Just days ago, at the same time that jobs growth in the US is returning to health, Macy's, an American chain, announced store closures and worker layoffs. This type of phenomenon is part of the new normal, and we have to help our companies in Singapore compete, reorganise and, if necessary, resurrect themselves with all the room to manoeuvre that is necessary. Because at the end of the day, we still rely on healthy businesses to create good jobs.

At the moment, neither the existing legislation nor the proposed changes take into consideration the fact that businesses may be very different and may also be operating under very different conditions. If we take size, for instance, a large organisation with a strong human resource structure will be able to incorporate some of the changes that are required under the new legislative framework readily with possibly negligible additional costs, compared to a business with a very small number of employees. Will a small business be given time to set up processes, such as an employee performance evaluation system, in order to comply with the requirement on assessing the eligibility for re-employment?

On a related note, I would also like to ask about the quantum of the EAP. Although paragraph 25(c) of the tripartite guidelines has stated that, and I quote, "There should be a maximum EAP amount to moderate the financial burden on employers", at the moment, the EAP requirement seems to ignore both the prevailing economic circumstances and the specific conditions under which a particular employer might be struggling. With the current economic climate placing employers under strain as well, this could add pressure to those already in difficulty.

In conclusion, Mdm Speaker, I believe that the current economic environment means that a rigid one-size-fits-all approach will be a challenge. As Singapore's labour market prepares to adjust to a different set of circumstances in future, I believe that leadership from the tripartite partners in empathising with one another's position will continue to be a much-needed ingredient.

Mdm Speaker: Mr Zainal Sapari.

5.47 pm

Mr Zainal Sapari (Pasir Ris-Punggol): Mdm Speaker, I believe this Bill has great potential in addressing the concerns of our workforce, especially those of our ageing population. But it may still fall short if we look at the life expectancy trends in Singapore and other parts of the world.

Increasing life expectancy is a global phenomenon, and studies showed that it would increase, on average, by 2.5 years for every decade, three months per year or six hours per day. In fact, for millennial babies born in early 2000 onwards, half of them can live beyond 100 years.

In Singapore, our average life expectancy for females increased from about 63 years in 1957 to 85 years in 2015, and for males, it rose from about 59 years to 80 years over the same period. On average, we are looking at Singaporeans' life expectancy increasing by 3.5 years for every decade. Like other developed countries, half of our millennial babies will live beyond 100 years. Even those Singaporeans born after 1965, half of them will live past 90 years old.

What does this mean for us? If our workforce is living up to 100 years, it means that we have to work longer or save more. Given the future's reality, our retirement age must increase over time, to perhaps, 70 to 75 years to ensure a steady income stream for livelihood.

Alternatively, we should not look at a single retirement age but maybe a retirement age based on age cohort. In time to come, we need to be bolder to work towards removing the retirement age and allow a worker to work as long as he or she could.

Nevertheless, I still support this Bill amendment as a step in the right direction. Given today's economic climate and the increasing pressure to increase productivity to remain competitive, we must examine ways through which we can maximise our labour resources and ensure that our workforce remains dynamic in an era of rapid movement and change.

This Bill ensures that Singaporeans who are capable and willing to work beyond the age of 62 now have the option to do so till they are 67. At the same time, the amendment to this Bill can allow other employers to have access to the pool of experienced, evergreen workers since re-employment contracts can be offered to workers who have reached the age of 62 if their existing employers are unable to find a suitable position or vacancy for re-employment in their company.

Given this amendment in the Bill, I would like to suggest the Ministry monitor this new re-employment provision to closely assess its practicality and make future refinements to ensure effectiveness. That said, there are some areas I would like to touch on with regard to this Bill.

Firstly, I would like to ask if the re-employment obligations will still be applicable or subject to manipulation of the terms by the second employer in the long run. There should be some provisions for EAP to be paid by the first employer to assist the employee if the second does not extend the contract into the second year on unfair grounds. This will prevent any possible collusion or even uncertainties on the part of our older workforce, which can be very detrimental to their well-being and motivation.

Secondly, satisfactory work performance as assessed by the employer when considering re-employment contracts remains subjective and they may render the legislation rather weak in protecting workers. For example, the employer can arbitrarily choose not to offer re-employment to the employee if the employee is assessed by his employer to have unsatisfactory work performance or is medically unfit to continue working. The law should make provisions to allow for a worker to have independent assessment on medical fitness. This can be achieved by appointing a review panel of independent doctors to challenge the assessment of the company's doctor when the worker is certified unfit to work. If he is reassessed and deemed actually to be fit, and the company has no vacancies, he should have a form of recourse through EAP.

Thirdly, there should be tripartite guidelines issued for the employer to communicate to the affected employee on his plans to transfer re-employment obligations to a second employer. This process of matching should ideally begin a year prior to the date of the employee's re-employment to also allow him to make better decisions. The nature and scope of the alternative job should also be deliberated with the worker. This will make for a more streamlined and consistent approach to the transferring of re-employment obligations.

Fourthly, the law should look into extending the re-employment contract term to beyond a one-year renewal. There should be a longer contract period of three years, in view of the increasing life expectancy of Singapore's workforce and also in the interests of giving our older workforce a greater sense of security. This can still be subject to valuations on performance and health check as well.

Besides the above changes, the law can also look into providing incentives for companies that can strategically map out a second career for employees as early as 45 years into their lives. This foresight will allow companies to plan ahead, both for their own companies and for their own employees. This increases the likelihood of ensuring that their employees can carry skills that are relevant not just to their companies, but also to the industry as a whole. Mdm Speaker, please allow me to speak in Malay.

(In Malay): [Please refer to Vernacular Speech.] While the amendment to this Bill will extend the re-employment age to 67, it does not guarantee that a job will be available to the worker.

Although this amendment has provisions for a worker to find a job with an alternative employer or be provided a higher EAP, the worker will have a better chance to continue working until 67 years old if the worker constantly ensures that he/she upgrades to the relevant skills through lifelong learning.

Regardless of whether a person is in a low-paying or high-paying job, the chances of re-employment will be lesser without the relevant knowledge and skills to make the person employable.

Only if workers tap on the various training support programmes by the Government, such as SkillsFuture, the Workforce Skills Qualification training and others, can this Bill then achieve its intent of lifelong employability. Hence, it is important that such training support programmes be constantly updated and frequently reviewed to ensure that those programmes will complement this Bill.

(In English): Madam, the effectiveness of this Bill requires every party to do its part. On the part of workers, this Bill does not give any job guarantee unless the workers constantly upgrade and reskill to ensure relevancy. Employers need to change their mindset to get rid of any prejudices they may have of older workers and change the work culture and processes to be more inclusive of older workers, instead of clamouring for more foreign workers. The Government must continue to support training to ensure our local workforce have the opportunities to upgrade and reskill for lifelong employability and calibrate its manpower policies to encourage a strong Singapore Core. Let me end by quoting from a book entitled the "100 years":

"We are in the midst of an extraordinary transition that few of us are prepared for. If we get it right, it will be a real gift; to ignore and fail to prepare will be a curse." Mdm Speaker, I support the amendments to the Bill.

Mdm Speaker: Assoc Prof Daniel Goh.

5.57 pm

Assoc Prof Daniel Goh Pei Siong (Non-Constituency Member): Mdm Speaker, this train has taken a very long time to arrive. Back in 1993, when Parliament amended the law to raise the retirement age from 55 to 60, the Government set 67 as the target retirement age to be achieved in a decade. This was not done. The retirement age was raised to 62 in 1999. And then in 2012, when Parliament amended the law to set the re-employment age at 65, the Government again set the target age, now for re-employment age, to 67. It has taken five years to move the extension and 23 years in total to reach the 67 target.

How many senior Singaporeans who had wanted to work longer have lost many good working years as a result? Why the long delay? I sincerely hope it was not due to the political calculation of electoral cycles. If not, what were the demographic and economic considerations underlying the long delay to raise the retirement age to 67?

The Government owes Singaporeans an explanation because during these 23 years, we saw a massive influx of foreign mid-skilled workers who out-competed senior Singaporeans in the labour market. It was also during these 23 years that we saw a culture of ageism take root, so much so that analysts, unionists, Government leaders and Members of this House have been calling for a mindset change among employers to change their attitude towards senior workers. Habits and norms, once settled in place, are very difficult to change. In this case, policy inaction has allowed the culture of ageism to deepen and shape society's view that senior workers are less valuable than younger workers.

The benefits of allowing senior Singaporeans to continue to work go beyond the narrow dollar and cents of economic value. A study by researchers at the Singapore Institute of Management (SIM) University in 2013 shows many benefits. Work gives senior Singaporeans a sense of social purpose as they feel that they are doing something useful for others and society. Work is also a recognition that they are still valued by others and society. Work provides for a sense of autonomy, as they have the opportunity to deploy their skills and solve problems. Work provides for positive relationships as many senior Singaporeans make good friends at their workplaces.

For the senior Singaporeans themselves, many would like to continue working to remain financially independent, to be socially integrated, to maintain good health and for self-fulfilment. If we consider the qualitative benefits of work, beyond the quantitative measures of a narrow economic model, allowing senior Singaporeans to work longer kills many birds with one stone. It helps with the retirement insecurity of inadequate CPF savings. It helps to push back the onset of dementia and other ageing health issues. It helps to improve the psychological well-being of senior Singaporeans and enhances ageing in place, as the workplace is also a meaningful social place for senior Singaporeans.

Getting the right retirement age policy to facilitate senior Singaporeans to continue to work is not just an economic issue. It will tackle with one stone the many issues related to the ageing population. However, that one stone has to be thrown right and accurate. It has to be decisive and courageous. We have already wasted 23 years. We have no more time to waste with the ageing society at our doorstep. What we have here is a throw of a stone that is still too tentative. In this regard, I have six points to raise for the Minister to address and consider.

The first point, why is 67 the magic number after more than two decades? In 1993, the average life expectancy of Singaporeans was around 77 years. Today's average life expectancy is around 83 years and still rising. What was the model that was used to calculate the optimal retirement age that led to 67 as the target retirement age in 1993? Is the same model in use today? Should the effective retirement age not be adjusted as life expectancy goes up? Should it not be around 70 years of age today?

The larger point is the automatic linking of effective retirement age to life expectancy, which is the emerging best practice in developed economies around the world. This is so that the financial risks of ageing could be more equitably borne by all sectors of society, especially employers. Would the Government consider this policy innovation and link the effective retirement age to life expectancy, since we have now reached the target age of 67?

The second point: is the retirement age going to be stuck at 62? It has been stuck since 1999. Twenty years is a good time to reconsider whether we should raise the retirement age to 65 for future cohorts and existing cohorts if they so desire. This will encourage employers to think longer term when it comes to staff recruitment and, especially, training and retention. It would also give greater job security to Singaporeans and address the tight labour market conditions when we reduce the factor of foreign labour inputs.

At the 2015 National Day Rally, when announcing that the re-employment age would be raised to 67, the Prime Minister noted that employers had gotten used to employees working to 65 and were starting to benefit from it. If so, why not entrench 65 as the retirement age then? The employers are ready. They do not even cut salaries by 10% at age 60 anymore, which is why the Bill is repealing that part of the law. There are insignificant costs involved for employers. The benefit is added security for workers. Is there any reason why the Government would not do this?

The third point, in the extension of the re-employment age to 67, this Bill could have dealt with one of the biggest issues faced by senior workers who want to continue to work − the short-term length of their annual contracts. The one-year term contract or a three-year contract to be reviewed yearly sustains a sense of insecurity about contract review and renewal, which is not the right way to treat a senior employee and colleague.

With the extension of the re-employment age to 67, this means senior Singaporeans who would like to continue working would suffer twice the anxiety of contract review or renewal, four times from 63 to 66 years of age. Is there any reason not to stipulate the contract length to be at least two years, unless the senior chooses otherwise to have one-year contracts? Two years seem more reasonable and balanced. It makes more sense too, since employers should consider performance records of the past two to three years when re-employing senior workers.

The fourth point, there is the possibility for a loss of benefits in the switch from regular employment to the re-employment contract. This loss of benefits while still being employed to do the same work by the same company in the same workplace with the same colleagues is solely due to the employee reaching a certain age. Is this not unfair, smacking of ageism, and stigmatising for the senior Singaporeans?

This has real physical consequences, too, when it comes to medical benefits. There is a short circuit to the current policy logic. Employers are required to re-employ senior workers who are medically fit and yet they are allowed to reduce the medical benefits, when the benefits present a serious cost concern. Is it not self-defeating that the reduction of medical benefits could lead to senior workers becoming medically unfit for continued re-employment?

The fifth point, other than the criterion of medical fitness, employers are required to re-employ workers who have satisfactory work performance. However, for medical fitness, the Act currently has a section stating that the employee is presumed to be medically fit unless the employer proves otherwise on the balance of probabilities. There is no equivalent clause for the work performance eligibility criterion.

I understand there is a need to balance the interests of employers and workers and allow for enough flexibility when it comes to re-employment. However, what recourse does a senior worker have when the employer refuses him or her the right of re-employment on grounds of unsatisfactory work performance which the senior worker disagrees with?

If the normal convention applies, the burden of proof is on the senior worker to show that the termination is unfair. This is onerous and borders on the impossible for many senior workers, especially when they are not professionals, managers, executives and technicians (PMETs) who would usually have access to human resource records for formal performance reviews. Does the Ministry depart from the convention of placing the burden of proof on the worker for senior workers seeking recourse on this matter? If not, would the Ministry do so for senior workers being rejected for re-employment by investigating the evidence on the balance of probabilities?

The sixth point: Manpower Minister Lim Swee Say said during the General Election in September 2015 that the payout age of 65 for the CPF LIFE scheme would not be raised when the re-employment age is raised to 67. Will this promise be fulfilled?

If so, this effectively delinks the CPF LIFE minimum payout age from the re-employment age. This means that at age 65, senior workers can enjoy monthly CPF LIFE income to augment their regular income from re-employment to 67 years of age. The Workers' Party has been calling for this delinking of the CPF drawdown age from the retirement age since the debate on CPF reforms in 2007.

With this delinking, we are now in line with the practice of pension and retirement policy in many developed countries internationally. With this delinking, the Government is acknowledging that there is no need for a rigid fixing of the pension income payout age to the retirement age because there is no rigid relationship between the two. Many developed countries allow for earlier pension income payout regardless of employment status of senior citizens, so that the seniors could start adjusting to their retirement plans even as they continue to work.

Why not allow senior workers to begin collecting their CPF LIFE payout earlier at 60 years of age if they choose to? This will allow them to augment their regular income earlier, which may well be critical for senior workers to maintain their good physical health so that they can be medically fit for re-employment at 62.

The only reason I can think of not allowing senior workers to start collecting their CPF LIFE payout earlier is that the Government does not trust our senior workers to use a few extra hundred dollars a month wisely by investing in their own health and in their own retirement plans, especially if they would like to continue to work. When it comes to the retirement and re-employment policy, we have been catering flexibility for employers to protect their bottom line for many years now. We should also cater flexibility for employees to help them protect their financial and physical health.

In summary, the Government should explain to Singaporeans why it took all of 23 years to raise the effective retirement age to the targeted 67. And now that it has, I have these six questions for the Government.

One, should the Government consider linking the effective retirement age to the average life expectancy of Singaporeans? Two, why leave the retirement age stuck at 62 now when employers have grown accustomed to senior Singaporeans working to 65? Three, why maintain the annual review and renewal structure of re-employment contracts? Four, why are the medical benefits for senior workers not protected for re-employment? Five, should the Ministry depart from the convention of placing the burden of proof on the worker for senior workers seeking recourse on being rejected for re-employment due to alleged poor work performance? Six, since CPF LIFE payouts are now delinked from the effective retirement age, why not let senior workers get their payout earlier and trust them to invest in themselves?

[Deputy Speaker (Mr Lim Biow Chuan) in the Chair]

In conclusion, I support this Bill because it finally fulfils the promise to raise the effective retirement age to 67 after a very long delay. Retirement age policy is a critical tool that could be used to effectively tackle many of the economic, social and psychological issues related to the ageing population. This tool should not be influenced by short-term economic and political concerns. It is important for us to harness the retirement age policy for its long-term impact and implications for the ageing society. I hope the Government will have the courage to do so even if it would prove unpopular in the short run.

Mr Deputy Speaker: Mr Desmond Choo.

6.08 pm

Mr Desmond Choo (Tampines): Mr Deputy Speaker, I rise in support of the Bill. Longer life expectancy and better healthcare systems have allowed workers to work longer and more productively. I welcome the amendments in this Bill as they will take Singapore further in providing more options for older workers and companies. It provides the flexibility to strike a good balance between the interests of both workers and companies. The changes proposed in this Bill are important threads in our tapestry of support for older workers, which will take time to develop.

This Bill is timely as it comes at a time when we need to meet the challenges of an ageing population. In weaving this tapestry, we must be guided by a vision of ageless workplaces. In such workplaces, employers and workers are not fixated on age, older workers are not seen as liabilities, and technology will better enable older workers rather than replace them. It is a lofty vision but it is one that is imperative for an ageing Singapore. It will take time, but we will get there. This will require a fundamental mindset shift. But some aspects of this Bill will have already contributed to this vision. For example, the abolishing of the salary adjustments is important because wages should reflect a worker's job scope and output. Age should not matter.

I believe that we can and should do more to support the shift towards ageless workplaces. In this economic slowdown, we can easily lose momentum, and older workers, who are most vulnerable during restructuring, will suffer the brunt of it.

Could the Government consider continuing the additional wage offset of 3% of wages support given under SEC? Could the Government also review the ceiling cap for the SEC, so that the wage offset can be given to companies that employ older workers earning more than $4,000 a month? This incentivises them to keep even more of their older, mid-level workers.

This Bill also provides for a second employer to take over the employment terms of an older worker. How will the Government ensure that all means are exhausted before workers are transferred? What safeguards will be put in place to ensure that this does not act as a conduit for ill-intentioned companies to use the new companies to exit workers via liquidation? In addition, for workers who will be transferred to a new company, could the Government provide training programmes and leave support so that they can smoothly transition into their new career? Mr Deputy Speaker, let me continue in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Mr Deputy Speaker, Sir, I support the amendments to the Retirement and Re-employment Bill, raising the re-employment age from 65 to 67. It will be helpful to our older workers in terms of financial planning and self-fulfilment through work. This is an important step towards our vision of building an inclusive and ageless workforce.

The concerns of the older workers are understandable. Many of our workers, by the time they reach the retirement age, are still unable to achieve financial freedom and have to continue to work. There are also many Singaporeans who would like to stay connected with society and long to continue working. However, they also have age-related special needs. Many older Singaporeans wish to achieve a balance between work, family, aspirations and physical strength. However, looking for a suitable job can be a difficult and frustrating challenge.

I would like to urge the Government to provide a one-stop job-matching and training service for our older workers. Jobs matched and training provided will be specifically selected to suit the older workers. This will make things much easier for them.

Although we have legislation in place, employers and employees need to have a change of mindset and thinking to achieve our vision of building an ageless and inclusive society. The Government and employers should work together to improve the work process and fully develop the workers' potential, and not go by the old way of recruiting foreign workers whenever there is a shortage of manpower.

Workers themselves must also be willing to try new jobs. Only by doing this can we fundamentally eradicate age discrimination and create an inclusive society.

(In English): Mr Deputy Speaker, please let me continue in English.

There is a need for dedicated channels and platforms with curated silver-friendly jobs to help older workers function well in jobs that they are suited for. We have already done the same for PMETs. Could we not take the same approach with our older workers so that their skills and knowledge can be tapped on in an environment that is better suited for their needs?

Finally, for workers who will turn 65 before the passing of the Bill, could we encourage the public sector, government-linked companies (GLCs) and private sector companies to extend the same employment terms to them until they reach 67 years old? After all, we must all work in the spirit of the law, rather than just the letter. With this, I support the Bill.

Mr Deputy Speaker: Ms Joan Pereira.

6.15 pm

Ms Joan Pereira (Tanjong Pagar): Mr Deputy Speaker, I rise in support of the Bill. With Singaporeans living longer and in better health, raising the re-employment age from 65 to 67 is timely and will allow them to continue their work longer, contributing their valuable expertise and experience.

I am very glad to note that an outdated provision, which allows employers to cut employees' wages at age 60, will be repealed. It is unfair to a worker who does the same job to have his pay reduced once he reaches 60.

I am also happy to support the amendment which allows eligible employees to be re-employed by other employers with the older workers' consent. This will be more flexible than the current arrangement, where the employment obligations lie with the older worker's employer. In the event an employer is unable to find a suitable job within his company for the older worker, he will be able to transfer him.

However, I am concerned that it would not be easy to transfer re-employment obligations of a 67-year-old employee to another employer in practice. The highest chances of success may be transfers to a subsidiary or related companies. Unfortunately, most SMEs do not have this option.

In addition, companies may face a manpower crunch which does not allow them to look into helping the older workers find suitable jobs in other companies. This may result in the companies taking the easy way out by offering EAP which is a waste since many workers still can work and want to work.

I would like to ask if it would be possible to offer current and potential employers additional incentives, such as tax rebates, to re-employ workers aged 67 and above, or recruit them from other companies?

There is already an incentive scheme for employers to hire older workers. This is the SEC scheme which provides employers up to 8% of an older employee's monthly wage. The scheme targets companies which hire employees aged 55 and above and who earn up to $4,000 a month. The highest tier of SEC is 8% for employees aged 65 and above. While this incentive is appreciated, additional benefits would be useful. Employers would be concerned about potential energy and declines in cognitive functions in workers in their late 60's and would need extra motivation to hire these older workers. Mr Deputy Speaker, Sir, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Under the Retirement and Re-employment (Amendment) Bill, if a company with older workers do not have suitable positions for employees eligible for re-employment, they may choose to arrange for them to work in other companies, including a subsidiary or related companies.

The important thing is that new employers should not just be fixated on whether the older worker can do the job. Although that is important, employers should also ensure the older employee can adjust to the new environment and adapt because older workers take time to adapt and adjust. It would be best if they are made aware of the whole work environment, instead of just knowing what work they themselves will do. That would be ideal. I am sure that with years of experience, they can adjust appropriately and make even better contributions to the company.

We must encourage and guide Singaporeans to lifelong learning and ensure good results, so that they can cope with the challenges of new work environments. I hope that the Government will consider providing tax incentives to employers who are willing to hire and support the training of older workers.

Mr Deputy Speaker: Mr Thomas Chua.

6.19 pm

Mr Thomas Chua Kee Seng (Nominated Member): Mr Deputy Speaker, Sir, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Mr Deputy Speaker, Sir, from 1 July 2017, the Retirement and Re-employment Act will take effect, with the re-employment age being extended from 65 to 67. MOM is amending the legislation and requesting employers to shoulder more responsibilities. As an employer, I support the amendment of this Bill. However, from the perspective of an employer, I also wish to voice some of my opinions.

Singapore's population is gradually ageing and extending the re-employment age is a major trend. Older workers have a wealth of experience and, if their health conditions permit, could remain in their positions. This is good for the company and for the individual. However, we also need to understand their limitations; in particular, during the current volatile business environment, many industries are restructuring, and the Government is also encouraging businessmen to improve their productivity and lessen the reliance on workers.

Under these circumstances, the Government is requesting employers to arrange for a position for a 62-year-old employee to work until 67, even if there is no position available. If no position can be found, the employer has to offer a substantial amount of EAP or help the employee get a job at another company. Frankly speaking, the Government's new request and the direction for the last few years are clearly not on the same frequency. People aged around 65 are the baby-boomers and constitute a substantial number.

Before 1 July 2017, enterprises need to do proper financial planning. Restructuring requires the redesign of new workflows. On one hand, we need to raise productivity. On the other hand, we need to consider the situation of older workers, who may not be able to adapt immediately to technology which is too advanced, or methods which are too trendy. The company's capital is a pool, and if there is some outflow here and there, and no water flows in, the pool of water would be reduced. The ideal scenario is to have some outflow but balanced by some inflow, and maintaining that level of water could then ensure normal operations.

In this regard, can businessmen expect the Government to reduce other costs, like the foreign worker levy, the Certificate of Entitlement for commercial vehicles or, as the Member has just mentioned, offer more tax rebates to bring down their newly-added expenses? In the past, the Government had introduced wage credit schemes to lighten companies' burdens. However, we all know that legislations are there forever, they are permanent; but schemes are temporary. A company can only look after its older workers well if the company is functioning well.

Singapore companies are already learning to adapt to this new type of human resource (HR) structure. The company's workforce should comprise the old, middle-aged and young; each age group has its special qualities and everyone's value should be appreciated. For example, when female employees go on maternity leave, and the male employees go for reservist training, perhaps the older workers who have been trained could help to hold the fort and help to share the workload. Employers can see that.

In my company, the oldest worker was 80 years old, who carried on working until he passed on two years ago. When we arrange his work, we do not expect him to exert himself, but he won the respect of colleagues from his experience and attitude. In fact, if the bosses treat their elderly workers well in the long term, it also becomes a form of encouragement to younger employees. If they see this being practised in the company, the younger employees would have greater confidence in the company and give them a greater sense of belonging. A wise boss should know this.

Extending the re-employment age by two years does not mean that all older workers would be able to work for another two years, especially in this critical period of economic restructuring where some positions which were suitable for older workers may become obsolete. Those businesses which are in the process of restructuring, especially those in traditional industries, need to think of ways to adapt to new business environments.

From the viewpoint of economic development, the Government encourages enterprises to innovate and bring in new technology to create more benefits. From the viewpoint of social development, the Government requests enterprises to take care of the older workers and arrange for suitable positions for them. But at the same time, the Government needs to be aware that business costs are rapidly rising and understand the predicament of businesses. Our trade growth will continue to remain weak. Under these economic situations, it is very difficult for companies to seek growth. More companies are struggling to survive and are trying very hard to transform.

Thus, I hope that when the Government rolls out its policies, Ministries should be even better coordinated and make policies more relevant.

Mr Deputy Speaker: Mr Melvin Yong.

6.27 pm

Mr Melvin Yong Yik Chye (Tanjong Pagar): Deputy Speaker, Sir, I support the Retirement and Re-employment (Amendment) Bill. This is good news for our mature workers, especially those above the age of 62 and who wish to continue working for as long as they can.

Our employment practices and workforce need to evolve to meet the challenges of the future global economy and job trends. The intrinsic value of mature workers is the invaluable wealth of experience they bring with them, which companies can tap on when training their younger workers. It makes business sense to re-employ them beyond 62, if they are fit and capable to handle the demands of the job, and I am glad that Mr Thomas Chua agrees to this point as well.

As Executive Secretary of the National Transport Workers' Union (NTWU), I am heartened that our public transport operators were among the first to raise the retirement age of their workers beyond 62.

In 2013, the Singapore Bus Services (SBS) Transit raised the retirement age of their bus captains to 67. Last year, Singapore Mass Rapid Transit (SMRT) raised the re-employment age of bus captains to 69. Some of these mature bus drivers have driven more than 30 bus routes throughout their careers and this makes it easier for the operational team to deploy them to service different bus routes, especially during emergencies.

Our public transport operators also assign experienced bus captains to guide new bus captains. Newer and younger bus captains have told me that they pick up useful skills like providing better service and learnt life skills like work ethics and job dedication from their seniors. These benefits of hiring mature workers are especially more salient in industries with manpower challenges, like the bus service industry.

Today, many companies are already re-employing their mature workers beyond the re-employment age and I look forward to seeing even more companies hire workers beyond age 67. Age should not be a limit, but be a quality valued by employers. I hope that more companies can recognise these benefits.

I would also like to applaud the change that there will no longer be a wage cut for mature workers turning 60. This is a much-awaited move. Within the Labour Movement, we know of many companies that do not cut the wages of their 60-year-old employees. Some continue to receive salary increments due to their good performance. This legislative change sends a strong signal that companies should pay their workers based on performance, regardless of age.

For those approaching retirement age, having a fair remuneration package would encourage more to consider working so that they can remain financially independent, enjoy leisure activities, save up for retirement and be prepared for any unexpected medical expenses.

Lastly, we need to ensure that our workplaces are age-friendly. Creating age-friendly workplaces requires a whole-of-organisation approach, with open dialogues between employers, unions and all employees. Areas of work that can cause strain on our mature colleagues should be identified and promptly addressed.

As part of the enhanced WorkPro scheme which came into effect last July, there is the Job Redesign (JR) Grant to help companies create easier, safer and smarter jobs for our mature workers. The JR Grant aims to make current jobs physically easier, safer and smarter through improvements to the workplace environment or work processes to increase workers' productivity and satisfaction.

Let me cite an example. With assistance from the Singapore Industrial and Services Employees' Union (SISEU), Aerospace Component Engineering Services Pte Ltd is one of the first few companies to embark on this enhanced grant administered by NTUC's U Live department. Previously, workers were required to engrave intricate details like 2D dot-matrix or QR prints on very small data plates. Thanks to job redesign, workers can now make use of a laser marking machine and the relevant software to perform the engraving. This is especially helpful for the mature workers as it augments their physical abilities and enables them to continue doing this high precision job. This also helps them gain new skills and new process capabilities. The reduction in printing errors saved time and money, thus raising productivity for the company. This example showcases the viability of job redesign and I urge the Ministry to encourage and support more companies to embark on such projects. It would also go some way to address Mr Thomas Chua's concern about rising business cost.

I would also urge more companies to offer free health screening to their mature workers and encourage more workers to take ownership and adopt a healthier lifestyle. Through a health screening jointly organised by NTWU, Health Promotion Board and SBS Transit, 65-year-old Senior Bus Captain Mr Lee Chai Seng found that he had a high level of triglycerides and high blood pressure. Besides medication, he was advised to make lifestyle and dietary changes. After exercising regularly, reducing his food intake and opting for healthier meals, Mr Lee obtained a clean bill of health from the doctors within a year. A healthy worker is a happy and better worker who can contribute to his or her company. More companies should recognise that this is a win-win.

Mr Deputy Speaker, Sir, our mature workers continue to be an important pillar within our workforce and have much to contribute to their companies. It is crucial that they are recognised and supported at the workplace. Employers, with support from our Government agencies, can lead the way to redesign jobs to make full use of the wealth of experience and abilities of our mature workers. We need a real mindset and culture change to get rid of ageism at the workplace. The proposed amendments to the Bill serve to reinforce that no worker should be discriminated because of their age. With that, Mr Deputy Speaker, Sir, I support the Bill.

Mr Deputy Speaker: Mr Louis Ng.

6.34 pm

Mr Louis Ng Kok Kwang (Nee Soon): Sir, this Bill represents significant changes to our re-employment landscape. Reiterating Minister of State for Manpower Mr Sam Tan during the Committee of Supply debates last year, this is a necessary move which shows that Singapore is not just accepting, but embracing our older workforce.

Raising the re-employment age from the cap of 65 to 67 brings benefits both to our economy and to our workforce. The retention of manpower will inject vitality into our tight labour market.

At the same time, we are helping older Singaporeans to remain employable. My personal interactions with residents in Nee Soon, which has a sizeable population of seniors, tell me that many still want to work because of their desire to be financially independent, and many are already working well beyond the age of 65.

By raising the re-employment age, we will shine a light on the value that older workers can bring to our workplace, fostering a mindset shift that ageing is not a burden, but an opportunity.

Sir, I also applaud the Government's move to support companies to re-employ older workers. This Bill provides further flexibility for companies, while offering greater options for older workers.

However, as we recognise this group of seniors who work only because they want to, we must not forget the population of seniors who work because they have to. For many of the seniors, the reality is that they do not have enough savings to retire. I have met many who continue to work despite physical illness and severe fatigue.

Even for those with children, for some, financial contributions from their children are insufficient for their basic survival and I have encountered a few residents in Nee Soon East whose children only provide for them because the law mandates so, through the Parents Maintenance Act.

The rising costs of living may also mean that many have no choice but to work well beyond the age of 65, sometimes into their 70s, as you have heard, and even 80s. This would be a very sad reflection of Singapore, if we are a society that cannot even offer rest and repose to our people during their final days.

With this in mind, has the Ministry conducted any studies to reveal statistics on how many of our seniors work beyond the age of 65 because they want to, or because they have to and the reasons they have to work beyond 65? There are distinct differences between these two groups and a better understanding of this landscape can help create better policies.

Lastly, the main question I have been asked about this Bill is whether we will also be increasing the CPF Retirement Account payout eligibility age, which is currently at age 65 and we might be increasing it to 67. Can the Minister comment on this, please?

Sir, the above comments notwithstanding, I stand in support of the Bill.

Mr Deputy Speaker: Ms Thanaletchimi.

6.36 pm

Ms K Thanaletchimi (Nominated Member): Mr Deputy Speaker, Sir, I stand in support of the revision to the Retirement and Re-employment Bill. I must applaud the tripartite partners for their effort in bringing about the change, that is, the extension of re-employment age to 67 and also to ensure responsible re-employment on the part of the employers instead of taking the easy way out by paying EAP. I certainly hope there will be more enlightened employers who will provide these older workers employment beyond 67 and certainly envision a day when the retirement age can be raised to 65 and re-employment could continue without a cap in age as long as a person is mentally well and physically fit to work and can contribute effectively and, more essentially, continue to embrace lifelong learning taking a three "A"s approach, that is, "Adopt, Adapt and Advance".

However, it is lamentable that there is still a negative perception amongst employers that older workers are a liability to the company. Many employers plainly label older workers as too old for the job, lacking in energy and creativity, are not tech-savvy, have health problems and not able to work long as there are uncertainties in their health condition.

If one were to flip the coin to the other side, one would come to realise that, fundamentally, older workers provide stability to the organisation. For example, should the network fail or if there is tech downtime, they do not panic for they have alternative ways to get things done even though they are not tech-savvy, unlike our younger generation who often become paralysed when there is tech downtime. We should recognise and acknowledge the fact that our Baby Boomers and Generation X are willing to learn new technology to be tech-savvy.

Our older workers work in an era when work-life balance means work until the job gets done. They are resilient. For employers to recruit and retain them, it is all about the art and science of managing older workforce which companies must embrace.

Sir, I wish to highlight one main concern which I hope MOM will look into: the plight of the older workers, especially those between 62 and 65, and those beyond 65 who have lost their employment and are actively seeking a job.

Though the changes to the law are, indeed, timely and a most welcome step for a more inclusive and progressive workforce, measures have to be taken to help those older workers who have fallen out of employment now and until the law takes effect. We need to address the plight of our older workers, especially those above 65 who have lost their job prior to the legislation and now seeking employment. It is a great challenge, indeed, for this group of Singaporeans to find a job. Also with the slowing economy, what safeguards can we provide these older workers who are eligible for re-employment but lost their job because of early termination of term contract when companies underperform since older workers, besides foreigners, are the first to be terminated?

Secondly, once an older worker, within the re-employment age, becomes unemployed, it is rather a challenge for him to find another job. There is unspoken discrimination which is, indeed, difficult to establish. Even though there are various wage support schemes for companies to keep older workers in a job, be it those 55 and above and those 65 and above, perhaps MOM could review if these measures have been effective, especially to encourage companies to hire workers beyond 65, or should there be an enhanced wage support scheme that is tiered based on age band?

Anecdotally, there are many older workers, especially those beyond 65 who increasingly find it a challenge to even be given an opportunity for interview. PMEs especially, who have lowered their expectations, do see a constant roadblock with age being the undeniable barrier. Let me now share one of the several cases of such nature which I had come across. A technician denied re-employment after he turned 65 since the employer's legal obligation is until employee is aged 65, sought employment in many industries, including the security industry, which was a 12-hour shift work. He wants to be gainfully employed so as to keep himself active while earning to support his spouse who is a housewife as his two children are residing overseas. The word is to keep himself active, that is, occupied, and to have some money in his pocket for daily expenses. "Is it too much to ask for?" he asked. He personally shared that there is prejudice against older workers which is a challenge to prove as it is rather subtle. I shared with him that TAFEP has been doing extensive work to promote fair and progressive work practices and to highlight cases of such nature to TAFEP should he feel strongly that there is discrimination. He shared that he does not want trouble. I believe there are many of such cases where people are trying to get an employment and subsequently stop trying as it produces futile outcomes.

I wish that all employers, be it multinational corporations (MNCs) or SMEs, as part of their corporate social responsibility, can be enlightened, be fair and inclusive by providing a suitable job and a flexible work arrangement to allow for older people to be economically viable and self-sustaining. From the health and economic perspective, it is also good for the nation and the society as a whole.

I certainly hope MOM can provide more effective and sustainable incentives and continue promoting and sharing good practices of companies that hire older workers.

As we see the ageing population growing rapidly, perhaps it is worthy for the Government to consider creating cottage industries for the greying population. Singapore can be a lifestyle hub for one to age gracefully and it can bring about collective economic value and essentially doing well for our ageing population by creating jobs of such kind.

I also hope that MOM will consider upping the retirement age to 65 at a suitable time in the medium term and allow for re-employment without age limit. This, indeed, will require a tripartite effort to create genetic mutation of Singapore's DNA of how individuals view ageing and that to cultivate a culture of "age neutral workplace" as well as "age-friendly workplace". It is all about attitude, skill and adaptability. Technology can complement the effort of these older workers without having to totally replace them.

With the growing grey waves, will MOM consider having a quota on the foreign workers to older Singaporeans employed without affecting the opportunities for our younger workforce? We often hear of companies employing foreign workers at the expense of older workers. This is where monitoring and enforcement are required to deal with such unscrupulous employers and such sensitive issues.

Notably, MOM could consider anti-discrimination laws, especially on age, as it is more prevalent as a constant bugbear so as to safeguard the interest of our growing older population seeking jobs, should the persuasive effort yield be low and slow.

Lastly, on the revision of the Bill itself, I would like to seek a few clarifications.

One, with reference to section 7 of the principal Act, it is good to include the tripartite guidelines as a reference in this Act where the explicit details are contained in the guidelines. For example, the need for the employer to inform the employee of its intention to reemploy at least three months before the employee turns 62. Even if these guidelines are referenced elsewhere but for greater accessibility and quick reference, I would urge MOM to consider this suggestion.

Two, with reference to section 7A of the principal Act section (d), subsection (4) section (e) and sub-section (6), does this amendment mean that reemployment contracts will not be deemed as a new contract and employee's employment can be considered as a sail through?

Three, in regard to section 7B, can I clarify if we can delete or amend the subsection so that re-employed workers will not see a cut in their entitlements that are tied to length of service?

In the amendment under section 7B(5) also provides for the continuity of the employee's service for the purpose of computing the employee's entitlement to annual leave and sick leave. Would not this mean that subsection (1) is not as relevant?

Four, with reference to section 7C, does the current employer have an obligation to seek employment opportunities from another employer for the re-employed staff? Can they be expected to seek such employment opportunities among their parent/subsidiary companies with this amendment?

Mr Deputy Speaker, the revision to the Bill is a step in the right direction. I am indeed heartened that being old in Singapore will increasingly be less of a liability from the employment perspective. As we mature as an ageing society, it would be notably worthy for MOM to keep track of gender-based re-employment data so that there can be a more targeted effort to increase employment amongst older Singaporeans. What is of utmost importance is that to continue to provide employment opportunities to these older workers, be it men or women, and for companies to embrace age-neutral, age-friendly hiring practices and create a fertile environment for older workers to age gracefully with pride and dignity.

Mr Deputy Speaker: Dr Intan Mokhtar.

6.47 pm

Dr Intan Azura Mokhtar (Ang Mo Kio): Mr Deputy Speaker, the amendments to the Retirement and Re-employment Act serve to protect the employment interests of our employees, specifically those aged 63 to 64 and above.

I am particularly heartened that an employer can no longer make indiscriminate downward revisions of the salaries of employees once they are nearing retirement age. As our population ages, we can expect to live longer and work until much older. Now, 60s are the new 50s.

During my house visits and at my Meet-the-People Sessions (MPS), I have come across middle-aged residents who have expressed their worry at imminent job restructuring, salary reduction or employment retrenchment.

For some of them, even though they are in their 50s, they are still supporting young school-going children as well as elderly parents. On top of that, they are still paying off their home loan. Yet another group of middle-aged residents are the sole breadwinners for their families, and job insecurity as well as salary reduction weigh heavily on their minds and shoulders.

I particularly support clause 11(2), (3) and (4) to repeal section 5 of the principal Act. This is good news and is very fair to our senior employees. I believe that once someone reaches the age of 60, it does not mean that that person is less competent or less able to work. Competency and the ability to work really depends on the individual, regardless of age.

Besides, with life expectancy now expected to be between 80 to 85, being 60 is still considered relatively young. A 60-year-old would still have a good 10-15 years to work and be economically active.

There is, however, Mr Deputy Speaker, one part of the amendment that I am concerned about.

Clause 4, section 7(3) states that, I quote, "Where an employer does not intend to re-employ an employee because the employee does not meet the criteria in subsection (1)(b), then as far as it is reasonably practicable, the employer must give the employee a written notice of that intention within a reasonable period before terminating the employee's employment."

What is a "reasonable period"? One month's notice, which is standard practice, may seem like a reasonable period. But for those who are older, say, 50 and above, one month may not be enough to find another job. I have met older residents who have lost their jobs and are unable to find another job even after many months of searching, sending out job applications, attending interviews, and even after undergoing skills training in new areas of specialisation.

Some have even resorted to settling for lower-paying jobs or taking up jobs that do not fully utilise their skills or allow them to tap on their past work experience, because they are quite desperate to find another job, any job, just so that they can continue to pay their bills and support the family.

This is an area in which I hope we can work closely with employers in providing more opportunities for older workers to undergo proper work redesign to ensure job relevance or provide them with more time to gain alternative employment.

In addition, while I support clause 7 that makes amendments to section 7C to provide EAP, there is the question of how much payment is sufficient and fair and what constitutes reasonable attempts made by the employer in accordance with the tripartite guidelines. Will the Ministry elaborate on what reasonable attempts may be and what these tripartite guidelines are? Mr Deputy Speaker, please allow me to continue in Malay.

(In Malay): [Please refer to Vernacular Speech.] The amendments to the Retirement and Re-employment Act are a welcome move, especially the move to repeal section 5 of the principal Act.

The repeal of section 5 will give more assurance to workers and employers that one's age should not be used as a yardstick to measure whether someone is capable, is still able to work or is still competent for the job. Therefore, employers are no longer able to reduce an employee's salary just because he or she has reached the age of 60.

Personally, I have met those who are in their 20s but cannot endure hard work and cannot accept criticism at the workplace. At the same time, I have acquaintances who are above 60 but are still working actively, even though they have heavy work responsibilities and have to endure long working hours.

For so long, our community has become comfortable with the notion that 55 is the retirement age. But in reality, with higher standards of living and life expectancy now reaching age 80 to 85, the age of 55 is still relatively young. A person who is 55 can still work and be active for 10, 15 or 20 years more.

Here, I would like to urge our Malay community to avoid planning their retirement too early. Employment is meaningless if we are unable to spend time with our family or pursue personal interests or perform our religious obligations.

I believe we have heard of celebrities like creator of Marvel Comics Stan Lee, fashion designer Vera Wang and founder of GAP fashion retailer Donald Fisher. They became famous and embarked on new careers at the age of 40.

Our own countryman, Mr Sarkasi Said, a batik master whom I respect deeply, also began to enjoy success in his field at the age of 40. Although Mr Sarkasi is now 76 years old, he is still actively practising the art of batik making.

I am reminded of the saying "Life Begins at 40". Maybe it is also because I am now 40, too. But as long as we breathe, we should continue working and serving our nation, society and family.

(In English): We need to showcase more older employees who are contributing extensively to their employers and companies and value-adding to their work despite their age. Such open-minded and inclusive employers who employ them should also be showcased and commended for retaining, retraining and re-employing older workers. With that, I support the Bill.

Debate resumed.

Mr Deputy Speaker: Mr Heng Chee How.

6.55 pm

Mr Heng Chee How (Jalan Besar): Mr Deputy Speaker, thank you for allowing me to speak on this Bill. I would like to make three points today.

First, I support this Bill. We must continually innovate our methods so that our mature workers can keep contributing, and this Bill does that.

Second, big disruptions are happening to global trade, technology, business models, buying behaviour. How things are made, sold and bought are all changing quickly. Businesses and workers who can adapt will grow. Those who cannot, risk becoming obsolete more quickly than before. These same factors will also impact the chances of displaced workers when they look for jobs.

Hence, my view is that improvements in this Bill are absolutely necessary but are not sufficient to maximise the working years of mature workers who would have to deal with this increasing flux.

This brings me to my third point, which is that there is a critical need for the tripartite partners to examine these developments carefully and proactively devise policies and plans to address them in the interest of both mature workers and Singapore.

First, on the Bill itself, I am very happy, like all my fellow Parliamentary colleagues, about the key amendments: the one raising the re-employment age ceiling from 65 to 67.

Second, repealing the power of employers to reduce wages at age 60. Very few employers had resorted to that, given that most were fair-minded and that pay is very much performance-driven nowadays. Repealing this is timely.

Third, allowing employers to offer re-employment job positions that go beyond the immediate company or organisation, after due efforts have been made within the immediate company, to workers who are due for re-employment.

This gives more flexibility and scope for job sourcing. However, it is important to note that it is the worker's right whether to accept such an offer, and they cannot be ridden roughshod over. So, that retains the security that they have under current arrangements.

Where the offer cannot be met with acceptance, the worker remains entitled to EAP.

Mr Deputy Speaker, clearly, mature workers wanted an extension of the age ceiling soonest. The Labour Movement fully understands our mature workers' feelings and needs and has been pushing hard for an early resolution. Yet, the negotiations have taken several years. You may ask why?

Employers wanted added flexibility of options for them to fulfil their legal obligations without overly constraining their business and manpower decision-making. Workers, on the other hand, wanted more legal assurance to help them work beyond 65 and on fair terms. They do not want to be discriminated against just because of age. Workers wanted as much security as possible. In short, the negotiators were seeking a balanced and sustainable approach to achieve flexi-security.

The amendments proposed in this Bill are, therefore, agreed to as a package to address the needs and interests of both the mature workers and businesses.

A key lesson from these negotiations is that all sides were open to considering fresh approaches and innovations to reach a win-win outcome that secures each side's core interests. Such a mindset would be even more necessary when seeking new paths forward in the future.

I now move on to my second point. A company will only employ a worker when there is a need to create a job position and when they can find a candidate whom they believe is worth employing.

Singapore's economy is undergoing fundamental restructuring. Even as we work hard to transform ourselves, we are buffeted by serious cyclical and structural changes. Events in 2016, for example, have also shown us how volatile, uncertain, complex and ambiguous (VUCA) the world is becoming.

Consider the nationalist and protectionist backlash against globalisation and free trade, rapid currency swings, heightened global political instability, terrorist and cyber threats, technological changes interacting with social connectivity to upend business models in both manufacturing and services and to redefine where productivity and innovations are to be found and exploited.

So, these developments raise two questions, one I consider basic and the other one consequential.

The basic question is: given these disruptive challenges, how will goods and services be produced and sold? If technology and social connectivity, whether through driver-less vehicles, 3-D manufacturing, robotisation or e-commerce, if these are causing the creating, selling and buying of goods and services to be carried out in very different ways from before, then just making laws to enable people to do existing jobs for more years would become less and less adequate for more and more people as time passes. Even upgrading skills to do existing jobs better may or may not be adequate.

This flux increases the risk of mismatch and worker displacement. The structural challenge in this is very real and serious. Unless we ready ourselves to deal with it, structural unemployment, which is sticky, may rise. And structurally unemployed workers, especially mature ones, will find that even cyclical upturns will not bring back the jobs because the old jobs may no longer exist.

The consequential question is: what should we then do to help mature workers stay employed or be re-employable in this changed and changing environment? This is my third point.

I believe that, for this, we need to strike out boldly in three areas.

First, measures that help mature workers stay valuable and cost-competitive. Reduce net business cost of employing mature workers, for example ‒ and this has been mentioned by both the Minister and the other Members ‒ through an extension of employer wage subsidies, such as SEC or the additional SEC. In this regard, I note the Minister's point that this is being reviewed, and I strongly support every effort and consideration towards its extension because not only would it help render the mature workers more cost-competitive in general but, in the current soft economic climate, it would be particularly pertinent.

Next, step up efforts to educate companies on the implications of the peaking of the Singaporean workforce in the coming five years, and to help them find ways to tap on every worker, regardless of age, to the best extent.

Next, increase publicity of mature workers being valued for their worth on the job, as well as for their resourcefulness and tenacity in adapting to new circumstances and in seizing opportunities. The more our society sees this as normal, the more mindsets about mature workers ‒ who they are, what they are capable of ‒ will shift in the positive, correct and desired direction.

Secondly, we have to do more with measures that help match displaced workers quickly to new work.

If increasing flux raises displacement risk, then we must find ways to increase the clearance speed of our job-matching mechanism so that we can avoid a build-up of a pool of structurally unemployed workers. While this is true for workers of all ages, it would be particularly pertinent for mature workers of all levels, given the realities of the labour market.

To do this well, there is a need to significantly improve our knowledge of where the jobs and displacements of today and the future are or will be. We also need to enrol the mature workforce into life-long adaptive upgrading much more intensively and find ways to guide such learning and relearning beyond providing funding.

Our job and training matching efficiency and effectiveness must also undergo a step upgrade to deal with the expected larger flow volumes as this flux spreads and intensifies.

It would also require significantly enhancing social support and lowering switching costs for displaced mature workers who are undergoing retraining for new jobs in new sectors. These displaced workers have families to feed and commitments to meet. So, if left without systematic transition support, many more may exhaust their resources and end up in sub-optimal and underemployed work. Others may be discouraged from the labour market altogether and you will have this pool building up and that would become eventually a threat to social cohesion. We do not want that to happen.

The third area of action would be the structural reform of work, work processes and also legislation, regulation and so on. The gig economy and the workforce will grow quickly, if we look at international trends. Companies will keep a small core and tap on contract, outsourced or freelance labour more and more frequently. New-age workers and displaced ones may also seek to earn a living as self-employed, freelance providers, independent contractors, or other non-traditional forms of work, whether out of choice or no choice.

New technologies and social commerce platforms may also reduce or eliminate certain previously abundantly available self-employed or gig job options in time to come, such as the impact of autonomous vehicles on hired driving.

This is, therefore, much more complex than moving from full-time to part-time work, or moving from being a salaried worker to being self-employed as a business owner.

Our labour laws and arrangements have to keep up with the changes and challenges, so as to ensure that the risks and rewards of enterprise and production continue to be fairly and sustainably balanced between businesses, working people and the state. I mentioned the state for considerations, such as in terms of tax collection and social support outlays.

Press on to revamp workplaces and work processes to be age-universal, through ramping up such schemes as WorkPro. The design of workplaces, work processes and jobs have a direct and significant impact on whether older persons can avoid premature loss of employability. Given the relative difficulty faced by displaced mature workers in finding new jobs quickly, such upstream work will help reduce downstream pain.

Thus far, we have largely gone on the basis of a single national statutory retirement age, followed by a standard duration of re-employment. I believe that it is time also for the tripartite partners to study how mature workers in different occupation types may raise their effective working years beyond prevailing national statutory norms, for example, via industry-based or occupation-based norm setting.

Mr Deputy Speaker, the Bill before us will help more mature workers cope better and continue to work, especially in the jobs of today. At the same time, the future is rushing at us at an unprecedented speed and with unfamiliar manifestations.

Even as we strengthen our frameworks of today, we must mobilise Singapore and Singaporeans to tackle that VUCA future with focus, joint effort and a sense of urgency. Mr Deputy Speaker, I support the Bill.

Mr Deputy Speaker: Mr Gan Thiam Poh.

7.06 pm

Mr Gan Thiam Poh (Ang Mo Kio): Mr Deputy Speaker, I rise in support of the Bill. In view of our ageing population in which one out of four Singaporeans will be aged 65 and above by 2030, the Government would have to work with employers to adjust to the new norm where older workers will become one of the key pillars of our workforce.

The amendments to the Retirement and Re-employment Act are necessary to include those who are able and willing to continue working. Raising the re-employment age to 67 is one thing; convincing companies to retain and recruit these senior employees is another.

We need to balance the needs of businesses and workers. How would the Government encourage both employers and employees to retain older workers at other jobs within the company and at re-negotiated wages? My concern is that it is easier for an employer to offer EAP than to help an older employee find a position.

Currently, the SEC scheme provides some incentive for companies to hire older workers aged above 55 earning up to $4,000 a month. These companies will receive SEC of up to 8% of the employee's monthly wage. However, to attract employers to hire workers at the much older age of 67, particularly those who used to work at other companies, additional incentives, monetary or otherwise, would have to be given. Incentives will be needed for the current transition period until the concept of working into a person's 70s or even 80s becomes more widely accepted and integrated into our company culture.

I would like to ask the Minister: what have the public sector employers, including Statutory Boards, done for the re-employment of older workers? What are their success rates and the percentages of such workers being retained and redeployed? In addition, what is the percentage of older workers aged 62 and above in SMEs, relative to large corporates? This information will be useful for reference by both the public and private sectors and will inform our future policy measures.

Mr Deputy Speaker: Ms Jessica Tan.

7.10 pm

Ms Jessica Tan Soon Neo (East Coast): Mr Deputy Speaker, thank you for allowing me to speak on this Bill. I rise in support of this Bill as the amendments seek to help older local workers who are able and wish to stay employed to do so. With an ageing population, increasing life expectancy, we are seeing more people able and wanting to stay in the workforce. In my role as a Member of Parliament, I have met many older residents who have shared with me their desire to stay employed. Raising the re-employment age to 67 years and the provisions in this Bill will be welcome news for these older workers.

There are three areas of the Bill that I wish to clarify.

Raising the re-employment age to 67. Over the last five years, we do see an increasing trend of older people working in Singapore. For those 65 to 67 years, the labour force participation rate has risen from 30.9% in 2010 to 42.2% in 2015, although at a slower rate in the last three years.

The Bill specifies that from 1 July 2017, the new re-employment age of 67 will be applicable to those born on or after 1 July 1952. Can the Minister clarify what this will mean for those born before July 1952 who are currently employed and not yet 67 years of age? While I understand the need to give employers time to adjust to these changes, can those aged above 65 but below 67 be included to receive the same benefits with the provisions of this Bill as those born on or after 1 July 1952?

The second area, the repeal of the provision allowing employers to cut employees' wages at the age of 60. I am glad that this provision is being repealed. It is only fair that employees, regardless of their age, should not be compensated any less for the job that they are doing just because they are older.

The Minister has shared in his speech that the Government is assessing the need to extend the 3% additional SEC that supports employers to offset wages which will expire on 1 July this year. I do hope that a decision on this can be made sooner as it will benefit those currently working aged below 67 not covered by the new re-employment age of 67 as well as what the Minister had shared in his speech, those working and above 67.

The final area, on the inclusion of the option to allow eligible employees to be re-employed by another employer to increase labour market flexibility, it is good to allow for this flexibility and also having the safeguard that this can only be effected with the agreement of the employee. I do believe that going forward, there is a larger factor that needs to be addressed, especially as we discuss older workers. With the speed of technological changes and the disruptions impacting industries, business models, how work is done and the type and quality of jobs available, there will be job creation, but also job displacements, as well as new skills requirements.

So, while we make provisions for re-employment and raise the re-employment age to enable older workers to stay in the workforce if they wish and are able to, we need to complement this with concrete efforts to future-enable all workers. This will involve the development, training and retraining of workers before they reach 60. This will help workers, including older workers, to be more ready to take on re-employment opportunities and new roles that will exist at re-employment age.

For workers, having a learning mindset is important. If all of this does not happen, we would probably see a situation where employers will have to make the EAP as the jobs available will not be suitable for the worker with the current employer or any other employer. Mr Deputy Speaker, I support the Bill.

Mr Deputy Speaker: Miss Cheryl Chan.

7.13 pm

Miss Cheryl Chan Wei Ling (Fengshan): Mr Deputy Speaker, as we look at an ageing population in Singapore, this Bill serves to highlight some truths about social awareness of our ageing workforce and the current situation that many seniors face today or in the coming years. For a society with an active workforce, surely our definition of retirement and re-employment must go beyond the traditional association with an age or the adjustment of benefits in a contract for older workers.

How do we then define retirement? A check with Oxford Dictionary describes retirement as "The action or fact of leaving one's job and ceasing to work". Literally, this means anyone can retire at any age they feel comfortable to go without a need for the job and not because they have reached a predefined age and need to be made redundant from work.

I view both retirement and re-employment as personal choices where individuals decide when they wish to retire and whether they wish to be re-employed post-retirement at work and in what capacity. Sadly, the current employment trends reflect the harsh reality of the mindset of many employers and society at large that links one's effective worklife contribution to a particular age. While we question the state of things, should we not be asking what the root cause is? And are there better options in keeping a healthy, active workforce of willing and engaged workers?

I agree that it is necessary to have some short-term plans on creating active work for our seniors or Pioneer Generation. But is it sufficient to achieve sustainable re-employment through a transactional focus on areas like how and when companies find ways to employ our seniors beyond a certain age; or for the Government to continue providing transitional subsistence for the employers to hire our seniors? Now, would it not be more critical for us to fast forward our thinking on solutions for the future where generations of seniors, where workers in their mid-40s today, can continue to be meaningfully involved at the job market as they mature in the workforce?

We should recognise that under the Tripartite Committee on Employability of Older Workers (Tricom) and TAFEP, some progress has been made through working with the tripartite partners and also with the WorkPro Grants. However, depending on the Government alone or the law to ring fence and provide security for our older workers may be counter-productive in some instances and stagnates progression in achieving our desired outcome of having active ageing for those who wish to. There is a Chinese saying, 强 中 自 有 强 中 手、 一 山 还 有 一 山 高. What this means here is, whilst we can put some measures in place to ensure that our older workers remain employed, but the employers could also find more reasons and tactics to argue why they prefer not to have seniors in their workforce.

Based on feedback, I believe there are three reasons that primarily led to the companies' reluctance in retaining or hiring older workers. First, our subconscious conjectures that associate our seniors to specific roles and worth of their abilities when they come of age. Second, the perceived higher cost of having older workers due to their need for more medical benefits and correspondingly more sick leave and time off work. Third, many companies lack the ability and bandwidth to deploy resources with job match, redesign appropriate jobs and have little will to retrain and manage these workers.

As the Government encourages and persuades the tripartite partners to re-employ older workers, I urge the Ministry to consider the following on grounds of immediate and long-term needs.

The first area is the increased focus on contract workers and freelancers. I have previously raised in this House and would reiterate again the need to provide access to basic knowledge related to contracts, service agreements, common HR practices to all working age adults, so that they are better equipped with understanding the latest industry practices and mentally prepared to handle the situation if it does arise.

Increasingly, our older workers will not be hired as permanent or full-time staff and more PMEs are facing retrenchments even before the specified retirement age. Many of them end up with roles as part-time contract workers and freelancers. Such information and knowledge bear significance and are central to the workers on being better-informed and reduces the risk of unfair practices or litigations.

With the tightening labour market and a maturing workforce, it is hard to imagine why our older workers are perceived to bring no value at all to the workforce. Some claim that physically, the older workers cannot cope or do not have relevant skills to handle the work. This may be true for some specific jobs, but it cannot be so for all. Many companies are willing to hire fresh graduates or some with little relevant experience, so why not the older workers?

From my experience and observations, many mature workers have stronger resolve to learn, are willing to take on more scope if given the opportunities and share a greater sense of loyalty to their companies. Indeed, their wealth of experience cannot be redundant simply because they have reached an age. To change this trend, I strongly urge hiring managers and employers to rethink and to shift their mindset. Consideration must be based on the value that each worker brings to a company, many of which will not diminish with age, such as expertise and experience; and if done in collaboration, more work opportunities can be created locally and reducing social costs.

As pointed out by my colleague, Mr Heng Chee How, it will also be useful for MOM to work with SPRING Singapore to actively share practices and showcase how some companies, especially SMEs, have successfully implemented and redesigned their work scope to help mature workers manage new functions that they have not encountered previously.

In the second area, enhancing the framework for broad-based learning. We constantly speak about continuous learning and encourage individuals to cultivate a habit of learning not only in school but also at work. Often, this is not an easy task for companies without a people development centric culture or others without the scale to offer their staff training beyond their current job scope.

As we develop the scope of SkillsFuture in Singapore, I suggest looking at courses from a different angle and enhancing it in three ways. First, to gradually mandate that tertiary students should have at least an opportunity for internships at companies in the public or private sectors through the course of their study. Second, allow companies to tap on SkillsFuture credit and expertise to develop in-house training programmes relevant to their organisations or industries. Third, incentivise the employers not through salary subsistence but skills development and work scope crafted for mature workers.

Why the need for this? Early exposure provides our students with choices and understanding of what the future work environment might be or to further pursue areas of studies they are keen to specialise in. For the companies, it is a resource pool and also an early recruitment of potential talents that fit their company well.

While it is important to develop skills in areas that one is lacking and those where one is passionate about, the identification process and taking the relevant courses to reinforce it is not an easy path. The challenge that many individuals may face after gaining qualification from third party vendor courses in the open market is the level of recognition these companies are willing to accept on relevance and useful skills they have acquired.

Thus, if company or industry-related training can be considered under SkillsFuture, it will provide the incentive, scope and flexibility for the companies to enable some focus on continuous upgrading of their workers. Some of the programmes can be on-the-job training or cross-function job rotations; and this ultimately benefits the companies and enhances broader skillsets of our workers over time. This will also assist the SMEs which usually do not have the luxury of more resources and ability to dedicate their staff for external training. For workers in this situation, they will be further disadvantaged from not having a chance to learn broadly. With time, they may even face more difficulties to find the next appropriate job.

So, Mr Deputy Speaker, while I support the Bill and efforts that MOM has made thus far, we need to be cautious of the weary and prolonged effects a society may face if the efforts are made solely on the part of the Government. I hope our society can embrace the reality of an ageing workforce, progressively change their mindset on appreciating values of workers based on their abilities and make room for more people who are willing to contribute their part.

It may not be time for many to hang up their boots as they are cruising in their career, but reality hits hard when the mature worker wishes to remain active at work, only to find that redundancy and no vacancy are the music that welcome them. With this, I support the Bill.

Mr Deputy Speaker: Mr Henry Kwek.

7.24 pm

Mr Kwek Hian Chuan Henry (Nee Soon): Mr Deputy Speaker, the amendments to the current Retirement and Re-employment Act are sound. It strikes a good balance between protecting our seniors and encouraging our employers to hire seniors. Therefore, I stand in support of the Bill. I am also very heartened to hear Minister Lim's remarks about considering extending the SEC. I think that is a very good measure that many will welcome.

The next challenge we face is to get the information across to both our seniors and our companies. More so for the former, as our seniors are much more vulnerable.

One important point to communicate is the concept of re-employment age. On the ground, residents occasionally tell me that companies ask them to leave because they have reached "retirement age". Some companies even say that the "law prevents them from hiring seniors beyond a certain age". I am disappointed when I hear such misconceptions.

As my Parliamentary colleague Darryl David recently put it, as long as the employee is medically fit and willing, the re-employment age of 67 is just the floor and not the ceiling. The law does not stop companies from hiring seniors beyond 67, even though they are not covered under the rules spelt out in the Bill. This misconception shows us that empowering seniors with information is key. I have a few suggestions.

First, the Pioneer Generation Office can conduct household visits to seniors above 50 to share information on the current employment laws, as well as the incentives, such as the SEC, that can help them and that companies employ them. Secondly, well-crafted advertisements in different languages, including dialects, are also options. The ones for MediShield Life are very well-received and very effective. Third, let us not forget social media, especially since some of our younger seniors are also tech-savvy.

Besides informing seniors, companies need to understand that they not only gain from monetary incentives, but also from the experience our seniors have. However, it is not easy for businesses, especially SMEs, to stay current on regulations.

Therefore, our Government can do more to keep our businesses informed. For example, one, the upcoming business grant portal can be clear in stating senior employment incentives and re-employment age, perhaps through a pop-up banner at the launch page. This will ensure that our business leaders and towkays are kept in the loop. Two, the relevant MOM, CPF and Immigration and Checkpoints Authority (ICA) websites can display such information, too, so that the HR managers are aware of it as well.

Mr Deputy Speaker, in conclusion, the Bill amendments today are an important step to assure our seniors of their employability. But for the law to see its intended effect, seniors and businesses need a genuine shift in mindset. And for that to happen, they must first be empowered with the right information. I look forward to the responses from MOM and I stand in support of the Bill.

Mr Deputy Speaker: Minister Lim.

7.27 pm

Mr Lim Swee Say: Mr Deputy Speaker, Sir, first of all, I would like to thank the 17 Members who have spoken and for their support of the Bill. Let me try to address the key issues brought up by the Members.

First of all, I am happy to see that all of us in this House share a common objective which is to help as many Singaporeans as possible to work for as long as possible. Given the longer life expectancy, I think there is no disagreement that helping our seniors to live what I call "H2P2" − a Happy and Healthy, Productive and Purposeful life. I think we are on the same wavelength.

The issue is: what is the best way to go about achieving this? First, why re-employment and not retirement? Why do we not raise the retirement age? The Member Assoc Prof Daniel Goh asked that question: why leave the retirement age at 62? Why not raise it to 65 or even higher? Why raise only re-employment age?

Mr Deputy Speaker, Sir, we started off raising the retirement age as the key mechanism to enhance the employment rate for older workers. We used to have a de facto retirement age of 55. Later on, we formalised it at 60 and it was alright. Later on, the tripartite partners worked very hard together to raise it to 62. We managed to make it happen. But after that, we hit a wall. When the tripartite partners sat down to talk about raising the retirement age from 62 to 65 and beyond, all three parties objected.

First, the employers objected for the very obvious reason because they are concerned about the impact on businesses. On the part of the workers, Members may not be aware, our younger workers objected, too. In fact, at a grassroots dialogue chaired by Prime Minister Lee Hsien Loong, a young worker asked him a very direct question. He said, "I am now in my 40s. I have been waiting for many years to take over the position of my boss. My boss is going to retire very soon because he is reaching 62 soon. Now, if you were to raise the retirement age to 65 and beyond, it means I have to wait a few more years." He asked, "How is the Government going to take care of the aspirations of the young?" The young employees objected.

The older employees also expressed their concerns. They talked to NTUC. Every time we raise the retirement age, employers will demand a wage cut because of various considerations, and the older employees would object to the wage cut. So, we could not move. Employers did not want to move, young workers did not want us to move, and unions were pressured by senior employees not to give in to demands for wage cuts. So, we were stuck. How to find a solution? But we believe that instead of having all three parties looking at this as a problem, why not all of us work on a solution that can produce an all-win outcome?

We went to Japan. We studied their model. Every country talks about raising their retirement age but, in Japan, they pursued the direction of re-employment age. The core difference between retirement and re-employment age is that when you raise the retirement age, the expectation is for same job, same pay. As a result, we may deprive the younger ones of career progression. Whereas when Japan introduced the idea of re-employment age, the concept is, not necessarily the same job, not necessarily the same pay.

They told us when we visited them in 2005, 2006 that, in Japan, under the Re-employment Act, no manager is allowed to be re-employed as a manager so that the position will be made available to a younger successor, and that person who is re-employed will provide value-add, maybe as a consultant, an advisor, or a staff officer to guide and help the younger ones to succeed. In some cases, if the corporation does not have a position opening for them, they allow them to be deployed to the subsidiaries. Why? Because they can actually help to bring their expertise and experience to the subsidiaries.

We learnt from them. We thought it made a lot of sense. We invited the Japanese experts to come to Singapore to conduct workshops. And finally, we came to the conclusion that that is the best bet and the way to go ahead. As a result of that, we moved away from raising the retirement age towards the introduction of the re-employment age. I would say that, over the last five years since 2012, it has been proven that what we did was correct.

The second point: are we moving too slowly? Have we wasted 23 years? Deputy Speaker, Sir, we learnt from Japan the concept of re-employment. Come 1 July 2017, we will be ahead of Japan in the adoption of the re-employment age. The re-employment age in Japan today is still at 65. We learnt from them five years ago and adopted the re-employment age of 65. Come July, our re-employment age will be 67, but in Japan, it is still 65. Our re-employment age at 67, compared to many other countries, is already among the higher ones. Of course, some many argue: why not do away with retirement age completely? Why not do away with re-employment age completely?

We did a quick comparison. There are countries that have no retirement age, for example, the UK, Australia, the US, Denmark, New Zealand and Germany. They have no retirement age, but yet at the same time, there are other countries − I am talking about the developed economies − they have a retirement age. For example, in Korea, it is 60; in Switzerland, 65 for males, 64 for females; Sweden, 67; Finland, 68; Luxembourg, 68. Some of them are about the same as us, some are lower, and some are higher than us.

At the end of the day, we look at the employment rates. Yes, you can do away with the retirement age or have a higher or lower retirement age. The bottom line is: to what extent are we able to help the older workers to stay employed?

We looked at the employment rates of those who are aged 65 to 69, and guess what? What we discovered is that, with Singapore's re-employment age of 65, our employment rate of those aged 65-69 is 40.4%, as of 2015. Of the developed countries, two countries are higher than us: Korea whose rate is 44.8%, and Japan whose rate is 41.5%. We learnt from them about the re-employment age but when it came to actual employment rates, they are still higher than us.

These two countries are higher than us. And guess what? If we compare ourselves to all the other countries with a higher retirement age, for example, Luxembourg, their employment rate for those aged 65 to 69, is 7.1%, less than 10%. In the case of Finland, the retirement age is 68, but their employment rate for those aged 65 to 69 is 13.1%. In the case of Sweden, the retirement age is 67 and their employment rate is 21.9%.

What about countries with no retirement age? The UK has no retirement age, employment rate for those aged 65 to 69 is 21%; Australia, 25%; the US, 31%; and Denmark, 15%. All of them, all these countries, even though they do not have a retirement age, their employment rates for workers aged 65 to 69 are all significantly lower than Singapore's 40.4%.

What about workers aged 70 to 74? Eventually, what we hope is that our people can actually continue working for as long as they are able to, and as long as they want to. Looking at the employment rate for those aged 70 to 74, Singapore is 24%. Is that low? Is that high? Again, if we compare it to all these other countries, one country that is much higher than Singapore is Korea, which has 32.3%. I must really visit Korea soon to see how and what we can learn from them. Japan is again higher than us, 25%. But all the other countries are significantly lower. In other words, if we compare the employment rates of older workers aged 65 to 69, and 70 to 74, the tripartite partners in Singapore are very convinced that the way we are doing it is the right way.

The re-employment model is the right model. At the same time, we are not progressing too slowly. In fact, compared to other countries, our re-employment age at 67 is comparable and in fact, higher than many other countries, either going by the re-employment age as in Japan, or the retirement or pension age in other countries.

Therefore, I want to appeal for the support of Members: let us commit ourselves. At the end of the day, here in Singapore, what is our objective? We want to ensure that our economy can continue to grow. We all recognise that for economic growth, we have to support businesses. However, the main objective, the end outcome of economic growth must be translated into employment opportunities for people, young and old, all inclusive.

Jobs represent the best welfare; full employment is the best protection. Therefore, we will continue to evolve the re-employment model and, at the same time, make sure that our re-employment model in Singapore must be both pro-business and pro-worker. If we do not address the interests and concerns of businesses, we will eventually run out of jobs. But yet at the same time, if we do not take care of the interests of our workers, our people will eventually not be able to continue to pursue and live a "H2P2" life.

With that as a backdrop, I will now address some of the points brought up by Members. A related issue is about the CPF Payout Eligibility Age (PEA). Assoc Prof Daniel Goh asked whether we can roll back PEA from 65 to 60. For Member Louis Ng, he asked: with the increase in our re-employment age, does it mean that we are going to adjust the PEA to 67 as well?

Deputy Speaker, Sir, let me explain the current situation. Up until 2012, the link between the retirement age and CPF PEA was direct and identical. It is a point-to-point linkage. So, when the retirement age was 60, PEA was 60. When the retirement age went up to 62, PEA was 62. But in 2012, something happened. The two are still related, but they are no longer identical. They are still related because both are related to the expected lifespan but yet at the same time, I think from 2012, you would notice that even though we raised the re-employment age to 65, the CPF PEA, in fact, went up much slower to 63 in 2012, 64 in 2015, and 65 only in 2018.

The increase in our PEA is already something like six years lagging behind the re-employment age. Something happened again last year. I do not know whether Members noticed. At the recommendation of the CPF Advisory Panel, we amended the rules by which members can draw on their CPF payouts.

Starting from 1 January 2016, CPF members will start their CPF payouts between ages 64 and 70. Come next year, it will be ages 65 to 70 even though the re-employment age is 67. Therefore, the relationship between re-employment age and the age of starting the CPF payouts has already changed. It used to be point-to-point, but now, it is a range. The CPF payout start range is now 64 to 70, and the re-employment age will be 67 by July, within that age band. Next year, the CPF payout start range will be 65 to 70, and again, the re-employment age at 67 is still within that band. There is no longer a direct point-to-point linkage.

I think on this, we are all in agreement. But one point which we are still in strong disagreement is really not about the de-linking, but rather, it is about whether we should reset the PEA back to 60. For this Government, we think it will be the wrong thing to do, given that the life expectancy of our people is getting longer.

Also on the point about letting our CPF members withdraw more money so that they can invest on their own. If Members have been following all the developments, many of the CPF members who had invested their money on their own through the CPF Investment Scheme, or CPFIS in short, have not done better. By putting their money under our CPF LIFE, they can earn an interest rate of at least 4% per year. Therefore, I believe that it is to the best interests of our CPF members for them to keep their CPF retirement money in CPF LIFE.

Please also do not forget that CPF members can withdraw their savings above the Basic Retirement Sum (BRS) if they already have got a sufficient housing charge or pledge in place. In other words, we are not depriving our CPF members from investing their own retirement sum, if they have anything above the BRS for those who have sufficient housing charge or pledge and above the Full Retirement Sum for those without sufficient housing charge or pledge. Therefore, this amendment Bill is about raising the re-employment age. It has nothing to do with the CPF PEA or payout start range which, as I have said, is already fixed at 64 to 70 this year, and 65 to 70 from next year.

On eligibility for re-employment, some Members have expressed concern on whether the onus of proof is on the workers or the employer. I want to make it very clear that the onus is on the employer to show proof. If the employer says this worker is not eligible for re-employment due to poor performance, it is for the employer to show proof. If the employer says that this worker is not eligible for re-employment due to medical reasons, it is for the employer to show proof.

Some Members asked, "What if this company has no performance appraisal system in place?" When that happens, we will tell the employer, "Since you don't have proof, you don't have a performance appraisal system in place, and you don't have proof that this person has not been performing well, year after year, and more than that, along the way, you had not been giving him feedback, suggestions and so on, these cases would be ruled as being unreasonable denial of re-employment". MOM will then come in to either reinstate re-employment or order compensation, based on the situation of the case.

In the case of discrimination, I share the concerns of Members. This is something that we are always on the lookout for. For example, can the employer try to find ways to get rid of a worker just before 62? A worker may come to MOM to complain and say, "I have been working for this company for 10, 20, 30 years; everything went very well. But somehow, three years before I turn 62, everything turned negative." If this worker is a union member, we can ask him or her to approach the union. If he is not a union member, he should come to MOM.

Let me also emphasise that the Retirement and Re-employment Act covers all local workers. There is no salary cap of $4,500. Re-employment is an entitlement that covers all local workers, regardless of whether they are PMETs, high-wage or low-wage workers, they can all come to the tripartite partners or MOM if they feel that they had been discriminated against under the Retirement and Re-employment Act.

Regarding the employees' entitlement on re-employment, again, this is a trade-off between being pro-business and pro-worker. The tripartite partners negotiated and decided to strike a balanced outcome, which is that the core entitlement of workers provided for under the Employment Act should be protected. For example, paid sick leave of 14 days for outpatient consultation and 60 days of hospitalisation are protected. In the case of annual leave, the minimum seven days provided for under the Employment Act, again, is protected.

Some other entitlements may no longer be relevant and so, they are removed. For example, maternity leave. It is unlikely that the re-employed workers would need maternity leave. This is removed.

The question, really, is what about the contractual benefits: medical benefits and other benefits? Contractual benefits have never been part of the Employment Act. In other words, even the Retirement and Re-employment Act cannot protect your contractual benefits. Contractual benefits are bounded through contracts. It applies to all workers, young and old. Whether you are 40 years old or you are re-employed and aged 62, all your employment contract terms depend on what is contained in there; it is a subject of direct negotiation between the employee and employer, or between the union and the management. This will continue.

However, the tripartite partners are still concerned that the older workers, those who are re-employed, may not be in a good position to negotiate for fair terms and conditions. As a result, we have issued a set of tripartite guidelines. The latest revision will be issued later today.

In these guidelines, we will highlight what are considered reasonable terms and conditions. These guidelines are very important because in the situation of any dispute, the employee can come to the Tripartite Alliance for Dispute Management (TADM) for mediation and come to MOM for mediation. If the mediation is not successful, the case can go to the Employment Claims Tribunals (ECT). ECT will make reference to this set of tripartite guidelines. So, if the employer is, indeed, being unreasonable in terms of the terms and conditions and, after mediation, we could not succeed in a resolution and the case goes to ECT, ECT will make reference to this set of tripartite guidelines and rule whether the terms and conditions offered upon re-employment are reasonable. I want to assure Members of this House that the tripartite partners take this very seriously. ECT will come into effect on 1 April, before the re-employment age of 67 comes into effect.

On the issue of a new option for a second employer, some Members are concerned about what would happen if the second employer is not able to fulfil the commitments of the first employer. So, they asked if there is a way out for the second employer. First, I want to assure the Members that the consensus of the employee is a mandatory condition. If the worker does not feel comfortable, then he does not have to accept this offer. Once the offer is accepted, the second employer will have to fulfil all the obligations of the first employer.

For example, a Member mentioned about what would happen after one year, the worker is subsequently not offered re-employment at 63, after having been offered re-employment at 62. At the point of 63, if the worker is not offered re-employment, the second employer would have to pay the worker EAP. No difference from the first employer. Before the second employer can offer to pay EAP, the tripartite partners will come in to scrutinise whether this is the last resort. Remember that EAP is a last resort. Mr Patrick Tay highlighted this.

We will be monitoring very closely to ensure that there is no abuse of EAP. I am happy to say that in the five years of the Retirement and Re-employment Act, we have not come across too many cases; just a handful. The large majority does not have this issue of abuse of EAP. As such, we believe the second employer will be tightly bounded by these criteria and conditions.

On the question about whether workers should be told much earlier if they are not eligible for re-employment, our tripartite guidelines stipulate that whether a person is eligible or not eligible for re-employment, he should be notified at least three months in advance, the longer the better. Mr Zainal Sapari asked if the notice period can be one year. The unionised sector can try. The guidelines dictate at least three months' notice for eligibility, and mutual consultation for at least six months prior to re-employment or extension of re-employment. We think that is sufficient but let us do more.

On the payment of EAP, I agree fully with Mr Patrick Tay that we must have a safeguard in place to prevent abuse. As I mentioned, we watch it very carefully, and so far, so good. We will continue to monitor the situation.

In terms of the review of the quantum of EAP, we just reviewed it this round. Having extended the re-employment period from three to five years, the EAP quantum would be higher now, in the event the employer is not able to offer re-employment. This is already in our guidelines.

Business concerns are real. We take business concerns very seriously because we recognise that re-employment can only work if it is a win-win outcome. We have been in very close consultation through SNEF to take into account all the feedback. We will continue to provide support, not just through this scheme, but through the overall package that is coming up.

Assoc Prof Randolph Tan asked what if a company in financial hardship is not able to pay EAP. Those cases can go to Employment Claims Tribunal and the Tribunal will then rule, after they have seen whether the company is, indeed, in such great difficulty that it is not able to pay the EAP. There is a mechanism to resolve this.

Ms Jessica Tan asked whether we can do something to help and encourage employers to re-employ the older workers, including those not eligible for re-employment till 67. The answer is yes, we are actively looking into this. The decision on the extension, what form, what coverage of this additional wage offset will be decided soon, well ahead of the 1 July implementation date.

Last but not least, I share the views of many Members here that at the end of the day, the true success of re-employment depends a lot on how we value our older workers and how we redesign their jobs. I am very happy to hear the Labour Members repeating the call for "ESS", or making our jobs "Easier, Safer, Smarter". We are 100% aligned on this.

Last year, we enhanced WorkPro for job redesign. I am still looking for more ways to encourage greater adoption. Many countries have done something, so there is a lot that we can learn from.

Mr Melvin Yong asked about whether the Public Service can take the lead on re-employment. The answer is yes. Actually, the Public Service was the first one to adopt the re-employment age of 67 way back in January 2015. It has been about two and a half years ahead of the law. I also agree with Mr Heng Chee How that we should look at different ways to make "progressive workplace practices" more prevalent across the board.

Mr Deputy Speaker, Sir, I hope I have addressed most of the issues brought up by Members. I also want to assure the Members that many of their good suggestions will be taken note of by the tripartite partners and will be incorporated in our implementation. At the end of the day, just because we have succeeded in re-employment in the first five years, from 2012 to now, it does not mean that the way forward will be smooth.

The tripartite partners are concerned that as we raise the re-employment age, the higher the re-employment age, the more challenging it is going to be. Therefore, we have to find ways on the one hand, to make sure that the workplace becomes more age-friendly so that the older workers will be able to remain productive and help companies to remain competitive; at the same time, we must also take good care of our older workers in terms of employability and welfare.

We believe that by working together, we can continue to ensure that employment rates of our people aged 65 to 69, 70 to 74 and above, will always be among the highest in the world. On that note, I beg to move.

Mr Deputy Speaker: Mr Leon Perera.

7.57 pm

Mr Leon Perera: I thank the Minister for his answers. Just a few brief clarification questions. First, with regard to the possibility of discriminatory employment practices, the Minister cited an example of ageism, everything going bad in the last three years and how the employee in that case can go to MOM. My question is: what will MOM do at that point? I suppose MOM will look at the case and see if it contravenes the Retirement and Re-employment Act. Would MOM also look at that company in a more systematic way? The reason I mention this is because of the "double weak companies". For those who discriminate against Singaporeans, there is a so-called framework where you look for other evidence or a pattern of discrimination, who are the people they have hired over time and so on. Does MOM do that now in cases of ageist discrimination and other kinds of discrimination, or will it consider doing so in the future if it does not do so now?

The second and last question is: the Minister talked about the link between countries which have a higher or no retirement age and the labour force participation of those aged 65-plus. I am wondering: why do the tripartite partners feel that raising the retirement age or eliminating the retirement age reduces the labour force participation? I am wondering if there is really a causation or could it just be a correlation. There could be other reasons countries like the UK and the US may have lower post-65 labour force participation; they could have more generous defined benefits and pension schemes, for example. It may not be just the raising of the retirement age that is the thing that lowered the labour force participation.

Mr Lim Swee Say: Mr Deputy Speaker, Sir, on the first point, the answer is yes. Currently, all complaints are investigated by TAFEP. Once TAFEP does the investigation, if it discovers that it is not an isolated incident but rather it is a more pervasive HR practice of the company, then TAFEP will watch the company more closely and we will continue to work with them to work through that. The answer is yes.

Having said that, let me also assure Members that the incidence of discrimination of all forms, based on the cases we see at TAFEP, is still low. Of course, we will take every case seriously.

The second point about the retirement age, as I had mentioned, the key difference between the retirement age and re-employment age is that retirement age involves same job, same pay. Re-employment age is not necessarily the same job, not necessarily the same pay.

Let me give an example. I will not name this company but it is a company that I know. The senior management has been ageing. When we introduced re-employment up to age 65, the employees and the union asked the management how this would affect the renewal of the senior management in the company. The Chairman and CEO, in consultation with the top management of the company, about 20 to 25 of them, they came to a collective decision. They decided that in this company, all senior management of certain positions, on a voluntary basis, will exclude themselves from re-employment. They are very determined and said that leadership renewal for their company is critical to their sustained success. So, on a voluntary basis, they excluded themselves from re-employment.

The difference between re-employment and retirement really is about mindset; about how are we going to be able to continue to address the concerns of businesses and, at the same time, also address the concerns of the younger workforce in terms of their career advancement; and, at the same time, address the concerns of the older workers for wanting to continue to be re-employed.

So far, most countries still go for retirement age. To the best of our knowledge, Japan and Singapore are the only two on the re-employment model. The results, so far, I would say, seem to be more positive because the employment rates in Japan and Singapore are relatively higher compared to other countries. But the Member is right that this cannot be the only reason. It could be many other reasons and that is why in Singapore, we make sure that all the conditions are right, are conducive to be supportive of re-employment. It is not easy. Through tripartite efforts, I believe we can continue to make progress.

8.01 pm

Mr Deputy Speaker: I shall put the question.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Mr Lim Swee Say].

Bill considered in Committee.

[Deputy Speaker (Mr Lim Biow Chuan) in the Chair]

The Chairman: The citation year "2016" will be changed to "2017", as indicated in the Order Paper Supplement.

Clauses 1 to 11 inclusive ordered to stand part of the Bill.

Bill reported without amendment; read a Third time and passed.