Our government requires companies to offer re-employment, to any worker who hits the age of 62. Now, I want you to take a minute to think that through: you have a company which, in many cases, isn’t willing to rehire someone. But they have to because the government says so. And then, said company finds out the rules for “re-contractors” are…loosely defined. Guess what happens next (Hint: it doesn’t end with “happily ever after”).
What is the Retirement and Re-Employment Act?
The Retirement and Re-Employment Act (RRA) has been in effect since January 2012. It sets the minimum retirement age at 62, but employers are required to offer re-employment (or re-contracting).
The re-employment contract is for one year, which can be repeatedly renewed till the age of 65. But the Ministry of Manpower (MOM) suggests companies offer a re-contract for all three years at once. All conditional upon satisfactory work performance and being medically fit, of course.
Now this is a good idea on the government’s part. It encourages older workers to impart their experience, helps out workers who ran out of CPF, etc. Problem is, the guidelines for re-employment are loose. They were made that way, to allow for some degree of negotiation.
But that also allows employers to warp the original spirit of the law, to the point where job benefits are absolute rubbish. In some cases, those dogs pulling sleds on the Nat Geo channel probably have better retirement packages, which don’t…
- Reduce Your Pay While Maintaining Your Workload
- Remove Your Bonuses
- Worsen Your Benefits
1. Reduce Your Pay While Maintaining Your Workload
Here’s the MOM guideline on pay, when it comes to re-employment:
In effect, the guideline (this isn’t a law but a suggestion) supports knocking your pay down to that of a less experienced worker. Because apparently, it makes sense to have someone to stay and impart their experience, while paying them as if they didn’t have that experience.
But say you’re willing to swallow a pay cut. Let’s look at what happens to workload, if you’re re-employed.
If your pay goes down, so should your workload right? Especially since you’re 62 and all. Listen real hard now. Do you hear that?
That’s the sound of no one giving a damn. A company can go right ahead and saddle you with the same responsibilities, while paying you less. That’s pretty shocking in some contexts. Imagine a 62 year old cleaner being asked to do the same amount of work, at her age, for less pay.
(The irony is, it’s precisely the lower-income groups who may be forced to work past 62).
Now this isn’t true of all companies. It is entirely up to employers whether they follow MOM’s guidelines, or choose not to lower an older worker’s pay. But don’t presume your employer’s going to be one of the decent ones.
It’s more reason to save and invest. Should you be faced with a crap re-employment deal, you’ll at least have the option to leave on a choice profanity.
2. Remove Your Bonuses
The tripartite guidelines mention bonuses, and that older employees should be part of such incentives:
“They should, where appropriate, continue to reward re-employed employees based on company and individual performance in the form of performance bonuses, long service benefits, gain-sharing incentives or one-off bonuses.”
Some companies looked at all those words, and ended up noticing exactly one thing: the document used the word should, not must.
I spoke to Mr. Jordan Choo, a former strategic consultant, about his loss of a six month bonus:
“It was a little bit my fault, I didn’t pay attention to the contract. But I was told by my company that, under my re-employment contract, I was not eligible for certain bonuses. One of these was a large account, which…was a six month bonus.
I left the company shortly after, I don’t want to name them because I don’t want to start a witch hunt. But I would encourage all older workers to pay attention and negotiate. It’s quite disappointing that some companies do not want to follow the spirit of this initiative.”
Before you get unsympathetic and lay on the “Hah, they can live without bonuses” speech, think about the fairness of it. If an older worker contributes just as much to a company’s success, why should the rewards be less? On what basis? That he now appreciates softer food and remembers Duran Duran?
Pay attention when re-contracting. If this is the sort of deal you’re getting, maybe you’d better take your experience elsewhere.
3. Worsen Your Benefits
Benefits like leave, medical insurance, dental plans, etc. are also up to individual employers. Again, there are guidelines. But with some companies, they’re as effective as trying to tow a rhino with a loop of dental floss.
To find out how many companies retained full benefits for re-employment, I called about a dozen of them. Each one was extremely forthcoming (in telling me to piss off). So I spoke to Human Resource Consultant Angeline Seah:
“The guideline is to peg certain benefits, like leave, to those of colleagues in a similar line of work. So if you are assigned to a different job when you are re-employed, I suggest you examine the benefits very closely. They may not be the same as what you received before.”
It is possible to be re-assigned to a job with less leave, worse health coverage, lower transport allowance, etc. when you’re re-employed. Follow us on Facebook, and we’ll update you as we meet more older employees, to see how they negotiate and cope with it.
Have you heard of companies changing the terms of re-employment before? Share the dirty details with us here!
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