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Re-employment: A joke?

Leong Sze Hian/

When Ravi Philemon, TOC Interim Chief Editor  alerted me to the Ministry of Manpower's (MOM) latest report of the Survey on Re-employment, and asked me to “crunch the numbers”, I was hopeful that unlike previous surveys on re-employment, this one would be different in that workers would be surveyed too.

But when I managed to read the report, I was disappointed. In my view, the most obvious question was not asked in the survey – whether the employer respondent cut the pay of those that are offered re-employment at age 62, and by how much?

I think it may be useful to ask workers too, as to whether and how their employers offered re-employment. Otherwise, we may just be hearing one side of the story.

Also, the inherent problem with surveys, which in this case, is a survey of 3,000 private establishements, that had a 90 per cent response rate, may be that employers may be inclined to answer in the positive, rather than negative aspects of how they treat older workers.

Now, let me go into the specifics of the report.

Smaller employers better?

According to the report:

“The majority or 61% of all private establishments surveyed allowed their employees to continue working on existing contracts while 17% offered re-employment. Nevertheless, more locals were employed in establishments offering re-employment (47%) than in those allowing them to continue working on existing contracts (39%). This was because large establishments were more likely to offer re-employment than the smaller ones”.

I find this statement to be somewhat strange, as it may mean that it indicates that larger establishments may be more likely to discriminate against older workers, because 47% being offered re-employment may be worse than 39% being allowed to continue on existing contracts.

The reason being that re-employment may often result in pay cuts or a loss of benefits like medical or reduced annual leave, etc.

Work not satisfactory?

“Satisfactory work performance and medical fitness were common criteria for re-employment, with over nine in ten private establishments with re-employment policy adopting these criteria.”

This may not be a good sign for workers, as it may indicate that over 90% of employers may use such “reasonable factors”, to not offer re-employment or at much reduced pay and benefits.

So few have consultation?

With the Re-employment Acr's implementation just around the corner in 2012, it may be alarming from the workers' perpective, in that only 61% conduct re-employment consultation. Similarly, another alarming statistic may be that 23.4% of establishments (25.4% for Management & Executive), have not implemented any measures at all, with regards to workers working beyond 62.

“65% were allowed to continue working without a new contract and 30% were offered re-employment, mostly in the same job.”

It may indicate that as many as 35% ended up with employment terms that may be worse off.

“More establishments had plans to retain (55%) their older employees aged 55 to 62 than to recruit new older workers (42%)”

It may mean that 42% do not hire older workers at all, and only 55% plan to keep their 55 to 62 workers.

In other words, one of the primary problems of the Re-employment Act, may be that some workers may be fired even before they reach 62, so that they may not be eligible under the Act.

“64% of large establishments (with at least 200 employees) offered re-employment, higher than 19% for smaller establishments (with 25 to 199 employees). The latter were more likely to allow continuation of employment (56%) than the large establishment (28%)."

This may mean that workers in smaller establishments may have double the chance of be allowed to continue, and those in the large establishments may have more than three times the chance of being offered possibly worse off terms of employment.

Just 1 worker will do ?

“58% of private establishments employed private establishments employed at least one local worker aged 62 years old & over in 2010, up from 53% in 2009. The proportion of establishments employing local workers aged 55 to less than 62 also edged up from 79%to 80%"

In my view, this is rather odd, as as an employer with 100, 1000, 5,000 or say 10,000 workers, only needs to employ just one local worker over 62, and be counted as an increasing positive outcome? And also just one 55 to less than 62 local worker to be counted too, as more employers employing older workers. Surely, we need to ask what percentage of the employer's work force are age 62 or above 55?

“The increase was observed for both management & executives (M&E) and rank & file (R&F) staff. More establishments employed older staff in R&F than M&E positions, reflecting the concentration of older workers among the less educated due to limited opportunities for higher education in the earlier years.”

It may mean that the more educated you are as you grow older, the harder it may get to keep or find a job.

This has indeed been the trend in the recent labour data for older PMETs.

Older workers discrimination?

Since the top reason given by 62.1% of establishments for not implementing any measures to allow local employees to work beyond 62, was that “none of the establishment's employees have approached the age of 62”, it may indicate that most employers do not even employ any workers who are older (approaching 62 and over).

“Nearly all (93%) private establishments with re-employment policy used work performance as a re-employment criterion. This consisted of 72% which required work performance to be at least satisfactory and 21% which required work performance to be better than satisfactory”

It may mean that many workers may be at the mercy of their employers who have sole discretion to deny re-employment on the same terms, citing perhaps “not better than satisfactory” performance.

Hence, you may be employed with the same employer all your life, only to be told at age 62, that you are not “better than satisfactory”.

Supervisors become doctors?

“Medical fitness was also a common (91%) criterion for re-employment. This mainly consisted of those which required retiring employees to be assessed by a doctor to be medically fit (62%). Another 29% indicated that the assessment was done by their supervisors.”

How can supervisors who have no medical education, experience or training, be given the prerogative of assessing whether a worker is medically fit?

No suitable jobs?

“16% reported they had cases where local employees were not offered re-employment, even though they met both the work performance and medical fitness criteria. Common reasons given by these establishments were that employees were reluctant to continue working (75%) or no suitable jobs were available (61%)”

How ludicrous can it be that 61% of those not offered reemployment had no suitable jobs available for them, as soon as they reach 62?

It may become even funnier, when “offering Re-employment to Eligible Employees”, is defined as those “who met both work performance and medical fitness criteria for re-employment”.

It is kind of like you are a good and medically fit worker, but suddenly had no suitable jobs available for you as soon as you turn 62?

What is the point of a Re-employment Act that as surveyed, 80% of establishments with re-employment policy (not even counting those without an re-employment policy) set the minimum duration of re-employment contract at one year? In fact, 14.4% of establishments give less than 12 months!

So, does that mean that you are at the mercy of your employer every year? Actually worse is to come, as 20% would renew based on the criteria (new?) that “would be determined when the contract was expiring”.

Re-employment – funny or not?

Ask any country in the world, and our Re-employment Act may best be described “as a joke”, as there is so little protection for workers, with employers being able to offer any terms based on “reasonable”factors other than age discrimination, or just offer $4,500 to $10,000 compensation to not offer re-employment, or fire the worker before 62, or don't hire older workers in the first place, etc.

Like the folk song classic, “Blowing in the Wind”, when will we ever see a survey that ask workers instead of only employers, and an Equal Opportunity Employment Commission, like that in most developed countries, like Hong Kong and the United States.