MOM releases revised re-employment guidelines for older workers

With the raising of the re-employment age from 65 to 67 from 1 July 2017 onwards, the Ministry of Manpower (MOM) announced a set of revised Tripartite Guidelines on the Re-employment of Older Employees on 18 May aimed to better prepare both employers and employees for the change.

The plans for the raising of the re-employment age were outlined in Parliament during the Committee of Supply Debate on 8 April earlier this year.

First set up in 2005, the Tripartite Committee on the Employability of Older Workers (Tricom) most recently reviewed tripartite guidelines to cater to the raised re-employment age. This review includes changes to the Employment Assistance Payment (EAP), where employers should offer eligible employees a one-off EAP if they are unable to find suitable jobs for them.

The EAP amounts have been revised to suit older employees, and Tricom has advised employers to set a minimum amount of S$5,500 and a maximum amount of S$13,000. The minimum EAP was set in consideration of low-wage workers who may have greater difficulty seeking alternative employment and the cap aims to ensure that employees will not be encouraged to stop working.

Nevertheless, Tricom stated that employers should aim to re-employ the majority of their older employees and that contracts for re-employment should be offered to all older workers who are medically fit for the job and whose work performance is satisfactory or better.

Additionally, it was suggested in the guidelines that employers should offer employees 5-year reemployment contracts in order to provide greater certainty for employees.

Tricom also made note of various options for employers to provide medical benefits to older employees. Apart from co-payment and implementing appropriate caps on medical benefits claimable, Tricom also suggested leveraging Medishield Life to provide medical benefits to re-employed employees, where employers can provide additional Medisave contributions for such workers.

Overall, Tricom called for employers to recognise the value of older re-employed employees as part of a company or organisation, and encouraged employers to voluntarily re-employ their employees beyond age 65 before legislation takes effect.