Singapore has passed the Retirement and Re-employment Act ("Act") to enable more employees to continue working beyond the current statutory retirement age of 62. The Act will take effect on 1 January 2012, and re-employment will apply to employees who reach the retirement age on or after 1 January 2012 .
Under the Act, employers will be required to re-employ employees who have reached the retirement age and who are ready and willing to continue to work. The retirement age will remain at 62 years, but employers will be required to re-employ workers up to 65 years of age (and eventually to 67 years of age). However, an eligible employee may retire or be retired if he does not wish to be re-employed when he reaches the retirement age.
Employees are eligible to be re-employed if they:
- have attained the specified age of 62 years (or the contractual retirement age, if higher);
- have at least satisfactory work performance; and
- are medically fit to continue working.
The onus will be on employers to prove that an employee is not eligible for re-employment.
An employer must offer re-employment to his employee before the employee attains the specified age if the employee meets the conditions above. For the purposes of re-employment, a new contract of service may be entered into by the employee and employer, in which the job scope and the terms and conditions may vary from the previous contract of service. Any variation from the previous contract must be based on reasonable factors such as, but not limited to, the employee's productivity, performance, duties and responsibilities, and the wage system such as the seniority system applicable to the employee. The re-employment contract may of course also be on the same terms as before the employee reached the specified age.
Unless otherwise agreed by the parties, the period of re-employment stipulated in the new contract of service shall not be less than one year.
Continuous Service without Re-employment
An employer will be deemed to have complied with the requirement to re-employ an eligible employee if the employer allows his employee (being an employee who attains the specified age on or after 1 January 2012) to continue working beyond the specified age and the employer does not offer a new contract of service to the employee or terminate his contract.
Employment Assistance Payment
If an employer is unable to re-employ an eligible employee because the employer is unable to find a vacancy in his organisation which is suitable for the eligible employee despite making reasonable attempts to do so, the employer will have to offer an employment assistance payment (EAP) to tide the eligible employee over whilst he / she attempts to find employment with another employer. The amount of the EAP is recommended to be between SGD4,500 to SGD10,000.
Tripartite Guidelines on the Re-employment of Older Employees
To prepare employers and employees for the re-employment legislation, the Tripartite Implementation Workgroup has updated the Tripartite Guidelines on the Re-employment of Older Employees. The Tripartite Guidelines complement the re-employment legislation and will provide a basis for mediation and adjudication of re-employment disputes.