IMPACT OF REGIONAL CRISIS ON OLDER WORKERS

Mr Ong Ah Heng asked the Minister for Labour what the Government will do to prevent employers from using the regional currency crisis as an excuse to get rid of Singaporean workers, especially the older ones who can work until they are 62 years old, before the retirement age is extended from 60 to 62 on 1st January 1999 and how the Government can help cushion the impact of the regional economic crisis on workers worried about losing their jobs.

Dr Lee Boon Yang: The regional currency crisis is likely to slow down Singapore's growth rate this year. Companies, especially those with business exposure to the region, will be affected by the currency turmoil. Some may have to restructure their businesses and downsize. So far, there is no evidence that local workers, particularly the older ones, have been singled out for retrenchments. The main reasons for the retrenchments were business failure, industry downturn and companies undergoing restructuring. Of the 9,784 workers retrenched last year, 68.7% of them were local workers with the remaining 31.3% being foreign nationals.

I believe the Member for Nee Soon Central is concerned that before the retirement age of 62 is legislated on 1st January 1999, some employers may quickly discharge the workers so as to avoid retaining them up to the age of 62. This should not happen. In fact, my Ministry is encouraging companies to voluntarily extend the retirement age to 62 even before 1st January 1999. So long as the older employees are productive and can continue to contribute to the company, employers are unlikely to terminate their services. Such a move would be short-sighted as the employers would find it difficult to recruit experienced workers when business conditions improve. In the event that an employee is unfairly dismissed by his employer on account of his age or for other reasons, he can seek assistance from the Ministry under the Employment Act or the Retirement Age Act.

In anticipation of more workers being retrenched in the months ahead as a result of the regional financial crisis, the Ministry has set up a Tripartite Panel comprising representatives from the EDB, NTUC, SNEF, PSB and MOL to assist retrenched workers seeking re-employment. The Panel would also explore alternatives such as adjustment of wage costs under the flexible wage system to avoid retrenching their workers, re-deployment and implementing shorter work week. Employers will also be encouraged to take advantage of available training incentives to improve the skills of their workers during the lull period. The workers, on the other hand, are urged to take training and skills upgrading seriously so that they can remain employable in an increasingly difficult economic situation.