“Singapore
Airlines (SIA), SIAEC (SIA Engineering) and all other
SIA-affiliated companies practise 10 per cent across-the-board pay
cut for all employees the moment they turn 60 years old,” Ms
Jennifer Tan wrote to the Straits Times in May this year. “When
queries are made to the human resource department about such cuts,”
Ms Tan wrote, “especially in relation to the new
government push to extend the working life of experienced older
workers, the reply given is that it is ‘company policy’.” (Asia
One)
Captain P James, president of the Airline Pilots Association
(Singapore), had also expressed similar sentiments in his letter to
the Straits Times a week earlier. Referring to Singapore Airline’s
cutting wages of older workers the moment they turn 60, he wrote:
“It was really a case of no cut, no job. This was despite the fact
that there was no change other than the pilot turning 60 years
old.” (See
here) Legally, pilots are allowed to work up
to age 65. Captain James thus could not understand why SIA needed
to cut the wages of pilots who turn 60. “Here is a company that has
been struggling to stay above water, and yet it is willing to hire
the more expensive expatriate pilot on a longer contract term, with
the attendant costs such as housing and child allowances,” he
said.
“Why are they denying the national pilot, who helped build up
the national icon, the same opportunity of a job until the end of
his useful working life?”
Given that SIA is a government-linked company (GLC) and that the
government itself has been encouraging older Singaporeans to work
longer, it is puzzling that GLCs themselves would resort to
penalizing older workers by cutting their wages for no other reason
than that these workers have turned 60.
The Ministry of Manpower’s reply to these questions was: “Some
wage adjustment is necessary in order to maintain the employability
of workers as they age.” With regards to the specific question of
employers cutting – or as MOM put it – “adjusting” wages of workers
“as they reach 60”, MOM says:
“The Retirement Age Act does allow wage reduction of up to
10 per cent. However, the Act also makes it clear that if
there is any reduction, it should be based on “reasonable factors”
like the employee’s productivity, performance, duties and
responsibilities, and the market value of the job. It is worth
noting that age does not qualify as a reasonable factor in the
Retirement Age Act.”
It also said:
“[Wage] reduction at 60 should not be “automatic”. We
like to emphasise that it should only be based on the reasonable
factors as stated clearly in the Retirement Age Act.” (MOM)
The government has announced that it will introduce the
Retirement Age Act (RAA) in 2012 – five years after it was
first proposed in 2007.
Even before the Retirement Act’s expected enactment in 2012,
many older workers may already have been terminated from their jobs
or have had their pay cut substantially even before they reach 60
or 62. Employers may simply avoid the requirement to offer
re-employment under the RAA, by letting go or cutting the wages of
those approaching or who turn 62-years old, before the RAA takes
effect in 2012.
Although the proposed Retirement Age Act is clear that a pay cut
should be based on “reasonable factors” and age is not one such
factor, employers can get around this simply by citing these
“reasonable factors” as the reason for terminating a 62-year old
from his job or cutting his pay – even though the real reason may
be his age!
How do we effectively address issues of age discrimination like
those highlighted by the Air Line Pilots Association?
From past experience, getting employers to heed guidelines have
not have been an easy task.
————
