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Tuesday, 25 May 2010

Little protection for older workers


I refer to the attached letter by Mr Tan Kin Lian which was published in the Straits Times (24 May 2010).

I agree with Mr Tan Kin Lian that there is still a lack of statutory protection for older workers, particularly PMEs against prematured layoffs before reaching retirement age and also unfair retrenchment.

I had quite similar experience when I worked for a Korean MNC contractor, even though I was in the Mid-40s. I was retrenched in 2005 and paid a meagre compensation for my 13-year employment service, only after raising the issue with the NTUC and MOM. Luckily, I was hunted by another company, whom I had business contact, for a difficult project then.

Those years of wage re-structuring during the economic downturn had allowed employers to put forth and stretch unfair practices; while many middle income earners (PME) were forced to sacrifice with wage cut, CPF cut and CPF income ceiling cap, etc., but at the end; they suffered from a lack of statutory protection for retrenchment.

In Singapore, HR practitioners continue to support and capitalise on a blurred line between the following :-

(a) definition and contractual provisions for "termination" of employment contract,

(b) definition and contractual entitlement for "retrenchment" compensation or severance pay under the employment contract,

(c) statutory provisions under the Employment Acts.

The NTUC capitalises on it as a grey matter to attract membership, and talks too much on "ex-gratia" entitlement rather than push for statutory protection.

The MOM now convene a tripartite mediation process, which will be in place next year to help junior and mid-level professionals, managers and executives (PMEs) earning up to $4,500 a month to address common employment issues with their employers, except issues on "retrenchment benefits".

Note there is still a blur line between "workmen" and "employee" as far as HR practices are concerned, as opposed to the Employment Acts.

Employment Act (Cap 91)


Application of this Part to certain workmen and other employees

35. The provisions of this Part shall apply —

(a) to workmen who are in receipt of a salary not exceeding $4,500 a month (excluding overtime payments, bonus payments, annual wage supplements, productivity incentive payments and any allowance however described) or such other amount as may be prescribed by the Minister; and

(b) to employees (other than workmen) who are in receipt of a salary not exceeding $2,000 a month (excluding overtime payments, bonus payments, annual wage supplements, productivity incentive payments and any allowance however described) or such other amount as may be prescribed by the Minister.

Outsourcing also marginalise local workers when there is no "Minimum Wage Policy".

Even if local workers are not discriminated when there is exceptional economic performance, it is alright only if employers are willing to pay. However, this is just the macro view for the Government.

At the micro-level, the local workers still suffer, because a minimum wage policy is not in place.

The Governemnt is happy because they could collect foreign worker levies...while our State provides little welfare to locals; and zero unemployment benefits.

There remains much to be done to accord older workers the necessary fair statutory protection from unfair employment practices.


ST Forum
May 24, 2010

I REFER to last Thursday's letter, "Less than 3% of private firms cut older workers' wages", sent in jointly by the Singapore National Employers Federation, Ministry of Manpower and National Trades Union Congress.

Employers in Singapore have the flexibility to terminate an older worker for a variety of reasons, including restructuring and outsourcing. This has been practised quite often in the private and public sectors. There is little need for them to keep workers until age 60 to have their wages reduced under the Retirement Age Act. This probably accounts for the low percentage of employers exercising this wage cut.

I cite the case of a friend who has worked for 11 years in regional business development for a local insurance company. He was rated a good performer by the previous management. Recently, with a change of top management, he was asked to leave and was offered a compensation of only three months of salary.

He asked for my assistance on how to make an appeal to the Ministry of Manpower, as he still has a family and a sick elderly mother to support.

I hope that our tripartite partners will recognise this type of difficulty faced by many Singaporeans. The current employment practices offer little protection to workers, especially older ones, when the top management outsources the work to contractors to reduce their costs or replaces senior people with their own buddies.

Tan Kin Lian


  1. The longest I ever worked for a company is 6 years. Most of the companies I worked for are between 3-5 years. So loyal for what? I cannot understand how come some people can stay 10-20 years in a company.

  2. Hi Anon. 26 09:58

    If you are working on a routine job, like in the manufacturing industry, it seems unlikely.

    I work in the construction industry. One big project can takes 4~5 years, and with final accounts settlement and defect liability period, it takes another 1~2 years. A small project is about 3+1 years.

    Say one worked and completed a big project, and the economy turned bad. His company was "lucky" to secure a small project next and he stayed on, more than 10 years would have passed.

    It is industry specific.

    I had met a banker who worked for a Japanese Bank for 12 years. He was retrenched after the Tech Bubble Burst in early 2000.