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By Sue-Ann Chia & Kor Kian Beng
MR REGINALD Rodrigues, 63, suffered two pay cuts in the last three years. The first was when he turned 60 and the second, at 62.
'I'm really upset as I still have to do the same work,' said the technical specialist at a logistics company.
In all, his pay was reduced by about 25 per cent: 10 per cent initially and then 15 per cent as part of a re-employment package given to workers on reaching the retirement age of 62.
Mr Rodrigues then asked to do less but was told he was lucky to have a job.
Like many at large companies that take full advantage of the law, which allows them to cut a 60-year-old's pay by up to 10 per cent, he is all for the labour movement's move to get this practice eliminated.
The National Trades Union Congress (NTUC) drive, announced on Thursday, has also fired up unionists, who said they would soon be approaching management to coax them to change their policy.
At the Singapore Bank Employees' Union, about 70 per cent of the 30 unionised banks do it. Said its president, Mr Michael Lim: 'We're still working things out. We hope the banks will review their positions positively.'
According to the NTUC, more than 80 per cent of unionised companies with older workers follow the pay-cut rule allowed under The Retirement Age Act.
It was part of a package of concessions to employers when the retirement age was raised from 60 to 62 in 1999.
But labour chief Lim Swee Say said on Thursday it was time to review this 10-year-old policy, as most companies have moved away from a seniority-based wage system, under which wages are determined by length of service rather than performance.
Similarly, human resource consultants contacted yesterday believe it is timely to review this rule as it is unfair to penalise older workers who do the same job for less pay.
'With an ageing population, you will want to retain the older workers,' said Mr David Ang, executive director of the Singapore Human Resource Institute.
'So it is not good to keep that practice unless there is justification for a pay cut like a change in job scope.'
The Government, he added, should also relook the reduced Central Provident Fund rates for older workers, which get lower after age 50.
'It doesn't make sense to keep that CPF wage structure,' he explained, as it goes against the Government's call for workers to build up their retirement nest eggs by working longer.
Mr Peter Lee, managing consultant of Remuneration Data Specialists, said the paycut-at-60 rule should be replaced by the re-employment law, due in 2012.
This law, which will require bosses to employ workers beyond the retirement age of 62, could include clauses that allow for pay cuts at 62.
Employers, however, were more elusive with their views.
Among the almost 20 big companies contacted, those who responded quickly tend not to have this policy. They include food manufacturer Nestle, transport company Comfort Delgro and telco StarHub.
Only two companies - Singapore Airlines (SIA) and OCBC Bank - said they are guided by the rule.
SIA said employees have an option of retiring at 60 or 62. Those who choose to leave at 62 will have their pay cut by 10 per cent at age 60, said its spokesman.
'We look forward to the outcome of the review by the tripartite partners,' she added, referring to the upcoming guidelines by the unions, employers, and Government on this issue.
Other companies either said they could not reply in time or issued terse replies.
SingTel's spokesman said: 'We do not generally share details of our wage structure.'
Yet, Mr Logarajah Sabapathy, general secretary of the Union of Telecoms Employees of Singapore, revealed that SingTel does have a policy of cutting workers' pay when they turn 60.
The union is in discussion with the company to review its decision, he said.
As for Mr Rodrigues, his company stopped the practice a year after he turned 60.
But he is still sore. 'They could have restored the 10 per cent,' he said.
This article was first published in The Straits Times.
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