With an increasingly aging population and a growing number of Singaporeans opting to remain part of the workforce for an extended period, it is essential for older employees to enhance their understanding of their rights. Similarly, employers need to develop a heightened awareness of their responsibilities concerning re-employment after employees reach retirement age.
This article aims to address common queries in this domain, ensuring that older staff members can adequately prepare for re-employment opportunities while guiding employers in adhering to sound re-employment practices.
Retirement Standards in Singapore
What is the designated retirement age in Singapore?
In Singapore, the legal minimum retirement age stands at 63 years for individuals who:
- Are Singaporean citizens or permanent residents.
- Joined the organization or were recruited prior to turning 55.
- Employers are prohibited from enforcing retirement before the individual reaches 63 years.
Is early retirement feasible before the stipulated retirement age?
Employees are not bound by the prescribed retirement age of 63 years. If desired, one can retire earlier than the mandated age.
Can my employer terminate my employment due to age before I attain the retirement age?
As per Section 4(2) of the Retirement and Re-employment Act (RRA), employers are forbidden from dismissing employees below the minimum retirement age of 63 years based on age-related reasons. Violations by employers can result in penalties of up to S$5,000 in fines and/or a maximum imprisonment term of 6 months. Further information on handling disputes arising from age-based dismissals can be found below.
Is it permissible for me to continue working post reaching the retirement age?
Continuing work beyond the retirement age is allowed, provided the employee possesses the willingness and ability to do so. Moreover, employers must extend a re-employment offer within the existing organization before the employee turns 63, provided the eligibility criteria for re-employment are met, as elaborated below.
Re-Employment after Attaining Retirement Age
What is re-employment?
Re-employment pertains to the process of re-contracting employees who have reached retirement age, allowing them to persist in working, contingent on their willingness and capability. This involves presenting such employees with a re-employment contract.
What is the re-employment age in Singapore?
From 1 July 2022, the re-employment age, i.e., the maximum age for re-employment, has been set at 68 years. This implies that employers must offer re-employment to eligible employees who turn 63, extending until the age of 68.
Who qualifies for re-employment?
To meet the requisites for re-employment, the following conditions must be satisfied:
- Singaporean citizen or Singapore permanent resident.
- Completed at least 2 years of service with the current employer prior to turning 63 (if hired at 55 or older).
- Work performance has been evaluated as satisfactory by the employer.
- Medically fit to continue working, both mentally and physically.
- Born on or after 1 July 1952.
Certain categories of employees are exempted from re-employment, including those in specific roles or working limited hours per week. If ineligible for re-employment, employers must notify employees at least 3 months prior to turning 63, allowing ample time for alternative job searches. Employers are also encouraged to offer support services like career counseling to ineligible older employees.
Is re-employment obligatory for all?
What if I choose not to be re-employed? Re-employment empowers employees with the choice to determine whether they wish to continue working. There is no obligation to work or accept re-employment after attaining retirement age, even if eligible. Should an individual decide against re-employment upon receiving the offer, they can communicate their decision to the employer. This might necessitate confirming the decision in writing. If an individual accepts a re-employment offer but later decides not to continue, standard termination procedures can be followed as per the terms of the re-employment contract.
Can I work beyond the maximum re-employment age of 68 years?
Singapore lacks legal provisions restricting employment after the maximum re-employment age of 68, provided the individual remains medically fit and willing to work. Continued employment is also contingent on the organization’s capacity to accommodate such arrangements.
Grasping the Re-Employment Offer
Re-employment is typically facilitated through a contract. Employers are advised to initiate discussions regarding re-employment at least 6 months ahead of the employee’s 63rd birthday. Additionally, they should present the re-employment contract at least 3 months prior to the birthday. These timelines also apply to subsequent re-employment contract renewals.
During re-employment discussions, employers and employees can collaborate on mutually beneficial or flexible arrangements within the organization. Terms such as job role, working hours, and compensation can be adjusted. Upon agreeing to the re-employment terms, the contract takes effect on the individual’s 63rd birthday. For instance, if one turns 63 on 1 March 2023, the re-employment starts on the same date.
As per the Tripartite Guidelines on the Re-employment of Older Employees, the initial re-employment contract should span at least 1 year, with subsequent renewals annually until the maximum retirement age of 68. Alternatively, employers can offer a fixed-term 5-year contract up to age 68. If an employer fails to discuss re-employment arrangements and no decision is indicated by the employee, it’s assumed that the individual will continue in the same role and enjoy the original employment terms.
Options When Re-Employment Cannot Be Offered Despite Eligibility
- Transferring re-employment obligations to another employer In cases where an employer is unable to offer re-employment within the organization despite reasonable efforts, they might transfer re-employment obligations to another employer. This necessitates the new employer’s agreement and the employee’s consent. All parties involved must complete a consent form.
Acceptance of the new employer’s re-employment offer remains at the discretion of the employee.
- Providing an Employment Assistance Payment (EAP) An EAP is a one-time payment offered when an employer can’t provide re-employment within the organization, considering all viable options. The payment aids the employee while seeking new employment opportunities. MOM recommends an EAP equivalent to 3.5 months’ salary, with a minimum of S$6,250 and a maximum of S$14,750.
EAP is not applicable if the employee mutually agrees not to receive it, declines a re-employment offer, or is ineligible for re-employment. However, if the employer assists the employee in securing a job with another organization, the employee remains eligible for EAP, even if they decline the offer.
Resolving Re-Employment Disputes with Employers
Disputes with employers can arise under various circumstances, such as negotiating re-employment contract terms, disagreement over reasons for not offering re-employment, dissatisfaction with the EAP amount, or unfair dismissal due to age. Where possible, amicable resolution or union assistance should be sought. Alternatively, MOM or the Tripartite Alliance for Dispute Management (TADM) can be approached. For either organization, details of the dispute and relevant supporting documents, such as the re-employment contract, may be required.
Seeking MOM’s Assistance
If covered by the RRA, individuals can approach MOM for assistance if they believe wrongful dismissal occurred due to age. An online appeal form must be completed within 1 month of the last employment day.
If the appeal is successful and the Minister for Manpower finds wrongful dismissal, the employer might be ordered to reinstate the employee or provide compensation.