Basic Concepts on Re-employment in Singapore
The Retirement and Re-employment Act (IRRA) sets the minimum retirement age to 62 years old. It is illegal for employers to dismiss an employee because of their age.
Employers should offer re-employment to employees when they turn 62 up to 67 if they are eligible to continue working for them. The age of re-employment comes from 65 to 67 last July 2017.
The reason for this is that Singapore has a growing age population and there are more Singaporeans who want to stay in the workforce for a longer period.
Who is Eligible for Re-employment?
- A person who is a Singapore permanent resident or citizen.
- If the person has been with their current employer for at least 3 years before the age of 62.
- Their work performance is satisfactory according to the employer’s assessment.
- The person is still medically fit to work.
- Those who are born after July 1, 1952.
In case the person is eligible but the employer is unable to give them a position, the employer should:
- Give the re-employment obligation to a different employer with the employee’s agreement.
- Offer them a one-off Employment Assistance Payment (EAP).
Exemptions for Employee Categories
- Public officers that work in prisons, narcotics, the police, civil defence, and corrupt practice investigation service.
- Those who are part of the regular service in Singapore Armed Forces.
- Cabin crew from commercial aircraft.
- Statutory board employees and public officers who have the entitlement to receive benefits according to the Pensions Act.
- Workers with set contracts to work on specific projects because their employment ends when the project is done
- Employees working 20 hours or less in a week.
- Employees who first got a job after 55 years old and has been with the company for less than 3 years only.
Your employer should tell you if you are not eligible at least 3 months before turning 62 so you will have time to look for another opportunity.
Aside from that, employers must help older employees who will not be re-employed by them to offer career counselling and other services.
Employment Assistance Payment (EAP)
If the employer already checked the options of re-employment in the company, but still cannot find a job that suits you, the company can offer you an Employment Assistance Payment (EAP).
In essence, EAP is:
- Given only after interviewing you thoroughly because it is a last resort.
- A temporary relief that lets you survive a period of time while you look for alternative employment.
- A one-time payment that is equivalent to your salary for 3.5 months. It should be at least $5,500 and the maximum is $13,000.
- For the employees who got their re-employment offer at least 30 months before turning 62, they will only get 2 months’ worth of salary for their EAP. The minimum is $3,500 and the maximum is $7,500.
- Aside from the EAP, employers must provide outplacement assistance so their employee can find another employer.
Resolving Any Re-employment Disputes With an Employer
These disputes could happen based on these circumstances:
- There are disagreements when it comes to negotiating the re-employment contract terms.
- Your employer did not offer you re-employment and you disagree with the reasons why.
- The amount of EAP is unreasonable.
- You were given unfair dismissal because of your age.
You should always try to amicably resolve disputes with your employer or ask the union to help you if it is applicable.
If not, you can ask MOM or the Tripartite Alliance for Dispute Management (TADM) to help you.
Keep in mind that you could be asked for these when you approach the organization for assistance:
- Dispute details you have with your employer.
- Supporting documents, like your re-employment contract.
Central Provident Fund (CPF) Contributions
Singapore is operating in a mandatory statutory pension scheme that Singapore citizens can benefit from. The government must provide enough savings for participants when they retire. The CPF scheme is given and managed by the CPF Board of Singapore.
The CPF contributions are paid by the employer and employee. Further, the employer must deduct the employee contribution from their wages monthly and send that money to the CPF Board. It should have the employee’s contributions already when they do this. The contribution of the employer is different from the monthly salary of the employee. That is because the employer cannot deduct it from their contribution shares from the monthly salary of the employee.
Do You Need to Be in the Same Role?
Re-employment offers should be given before the employee turns 62, but it is not necessarily for the same role or same terms and conditions. However, the changes should be because of reasonable factors like duties and responsibilities of employees, performance, and productivity. Since re-employment resets the time for benefits related to services, the annual sick leave minimum requirements do not apply. In addition, employers must recognize all prior service because of these purposes.
In Case of No Re-employment
If the employee does not want to be re-employed must give written notice to their employer, within a reasonable time before they retire.
In case the employer is unable to re-employ the employee even if they have made reasonable attempts following the Tripartite Guidelines, the employer should make an EAP to the employee.
Special Employment Credit (SEC)
Employers who re-employ workers voluntarily from age 65 and older shall receive an added offset of 3% from the monthly wages of employees.
The enhancement of the SEC is helpful to employers when it comes to managing their total costs and encourages them to re-employ voluntary workers who are 65 and older.