Less than 3% of private firms cut older workers' wages
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May 20, 2010 - ST Forum
Less than 3% of private firms cut older workers' wages
WE REFER to Ms Radha Basu's commentary last Friday, 'Unjust pay cut for older workers hurts'.
The Retirement Age Act does allow wage reduction of up to 10 per cent. However, the Act also makes it clear that if there is any reduction, it should be based on 'reasonable factors' like the employee's productivity, performance, duties and responsibilities, and the market value of the job. It is worth noting that age does not qualify as a reasonable factor in the Act.
While we have made progress in moving towards performance-based wage systems, there are still establishments that continue to adopt seniority-based wage systems in varying degrees. Hence, the flexibility provided in the law still serves to enhance the employability of older workers.
As cited in the article, National Trades Union Congress secretary-general Lim Swee Say noted that some companies which have narrowed the max-min ratio to 1.3 will then have less reason to make wage reductions at 60.
The overall number of establishments that practise wage reductions at age 60 is small. The latest Ministry of Manpower (MOM) survey of some 3,600 private sector establishments earlier this year found that only 2.8 per cent of the establishments with employees aged 60 and above still have such a practice.
The tripartite partners agree with the writer that wage reduction at 60 should not be 'automatic'. We like to emphasise that it should be based only on the reasonable factors as stated clearly in the Retirement Age Act.
We urge employers and workers to work together to strive for a win-win outcome, by rewarding workers with wages reflective of their job scope, value of the jobs, productivity and performance, regardless of their age.
Employers can visit the re-employment portal at www.re-employment.sg for more information. Employees who feel that their wages are unfairly adjusted can approach their unions or the MOM for assistance.
Koh Juan Kiat
Executive Director
Singapore National Employers FederationOng Yen Her
Divisional Director
Labour Relations and Workplaces Division
Ministry of ManpowerCham Hui Fong (Ms)
Director, Industrial Relations
National Trades Union Congress -
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