The reactions to Minister Mentor Lee Kuan Yew?s recent remark that Singaporeans should not retire but work as long as possible have ranged from surprise to incredulity to puzzlement. What does he really mean? What are the implications for employers and workers? Is it feasible or just hypothetical?
Reflecting the sentiments of many bosses, On Cheong Jewellery managing director Ho Nai Chuen says: 'He may not have meant what he said seriously.'
But it would also, in one fell swoop, upend the structure on which the labour market is built.
What he said about no retirement age, he elaborated, should apply to the entire workforce, not just to top-tier talent or middle management and professional ranks. 'If a man is physically fit and can still do his work, he should be allowed to do so,' he said.
The Government has also signalled a clear tightening of its foreign worker policy, giving employers less space to manoeuvre when it comes to manpower needs.
Remember that the statutory retirement age is only a 17-year-old institution, introduced with the Retirement Age Act in 1993. It was set at 60 then, and raised to 62 in 1999.
But the significance is really the implication that employers can freely dismiss a worker for reasons of age after 62 with no consequences - a bottom line measure managers prize dearly.
A retirement age also gives workers some measure of security, in the sense that there is a stipulated milestone at which one's contribution to the company is evaluated; one's fortunes do not rise and fall from year to year, project to project.
The other option is retrenchment, which an employer invokes when his company has no room for the worker because of restructuring, downsizing and the like. But it is almost prohibitively expensive.
'Over-protection and privileges work against older workers' chances of being employed,' he cautions.
Re-employment contracts are usually for one to three years, with employers retaining the flexibility to dismiss the employee. Health benefits are often slashed in re-employment contracts, thus preventing the headache of ballooning health costs as a company's workforce ages.
But for employers to move closer to the unions on the issue, workers have to accept the dismantling of seniority-based wage structures.
If the US rate is not any higher, it may be due to a workforce that has a higher percentage of workers on contract work, which introduces insecurity for workers but allows a great deal of flexibility for employers.
Little wonder that Japan is the model older brother to a Singapore now struggling to age with grace.
Sep 4, 2010