By Nur Dianah Suhaimi & Cassandra Chew

BOSSES are willing to give their older workers payouts that, on average, range between three and six months' wages - in the event that they cannot offer the workers continued employment beyond the retirement age of 62.

They gave this range yesterday in response to a new proposal that bosses give a one-off payment to tide these workers over while they look for a new job.

But one of the 10 companies interviewed said it would give just one month's wages, while another was willing to give up to two years' salary.

The Employment Assistance Payment (EAP) is one of the key proposals in a set of guidelines, announced on Monday by Manpower Minister Gan Kim Yong, that looks set to form the core of the re-employment law to be introduced by 2012.

Although the EAP was generally supported by the employers, it was received with some reservations by small and medium-sized companies like Legend Security Services.

'It will definitely affect our margins,' said chief executive Randy Chua, who employs 31 people older than 62. They form about 5 per cent of his 550 employees.

He also said it would be unfair to make the EAP compulsory, unless the minimum sum is reasonably low.

The employers also suggested that two clauses be added to the EAP guideline.

One, give the EAP in small portions spread over several months, instead of in one lump sum. 'Companies prefer to pay less so that the worker does his part to find a job, and the reliance on the money is not so great,' said Mr Lawrence Leow, president of the Association of Small and Medium Enterprises (Asme).

In addition, it will help regulate the company's cash flow.

Two, the worker must have worked for the company for a specified number of years to be eligible for the payment.

Said Mr Chang Yeh Hong, managing director of Nordic Flow Control, a supplier of marine and offshore equipment: 'The worker must have been around long enough to deserve this payment. If not, it won't be fair to the employer. Some older workers job hop, too.'

Singapore's move to make it mandatory by 2012 for companies to offer re-employment when a worker turns 62 is prompted by inadequate retirement savings for people's longer life span, and the need for the country to make productive use of its limited labour resources as the population ages.

All the bosses were not opposed to it. 'The new 60 is the old 50,' said Mr Harish Nim, chief executive of IT solutions firm Emerio. 'We're living longer, people are much healthier, they have the faculties, if they want to work, they bring a lot of value to the organisation,' he added.

All of them also said they would not change the employment terms on re-hiring, although the guidelines let them adjust wages down to near the mid-point of a worker's existing salary range.

The proposals also let companies offer one three-year contract up to age 65, or renewable shorter-term contracts.

But some employers prefer the convenience of giving the worker a three-year contract. It is less cumbersome than having to renew it every year, said Mr Chua Teow Tzing, managing director of optics firm Qioptiq Singapore.

However, he foresees problems should the worker fall ill. 'It will be helpful if there is a clause that allows the contract to be terminated in this case,' he said.

On medical benefits, some want a co-payment system while others say it would not be fair if employers have to pay more for medical insurance.

However, come crunch time when the law is effected, Asme's Mr Leow foresees SMEs responding better to re-hiring than bigger companies. The reason: Multinationals are often hampered by existing employment policies. 'At SMEs, it is not easy to find replacements for older workers, and there is usually a bond between the worker and the boss,' he added.