OLDER WORKERS (Increase of employment opportunities)

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OLDER WORKERS:

(Increase of employment opportunities): 9.

Mr Ong Ah Heng asked the Minister for Manpower whether his Ministry has

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any plans to encourage employers to employ and retain older workers as well as to increase their work opportunities.

The Minister for Manpower (Dr Ng Eng Hen): Sir, Mr Ong has asked whether my Ministry has any plans to encourage employers to employ and retain older workers as well as to increase their work opportunities.

Let me, first, say that, as a matter of principle and this is a consensus from all three social partners - the tripartite consensus - that workers should be hired based on their ability to do the job regardless of age, gender, race or other attributes which are not related to their performance on the job. However, we also recognise that as our population grows older, we will need to facilitate opportunities for Singaporeans to work longer.

Based on these two considerations, we, together with NTUC, have actively pushed for workers' skills upgrading and job redesign. In other words, the strategy is, yes, we need to be non-discriminatory in hiring practices and we need to skill up, especially those who are vulnerable. Between January and November 2004, the Skills Redevelopment Programme (SRP) supported close to 35,000 training places out of which approximately 60% of the people trained under this programme were aged 40 and above.

The Singapore Workforce Development Agency (WDA) will continue to expand our targeted training and skills upgrading programmes to help older workers pick up new skills in order to stay relevant in the changing workplace.

We will also continue to promote Flexible and Performance-Based Wage Systems that reward workers based on their output. The Seniority-Based Wage Structure works against older workers and makes them more prone to retrenchments

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in a downturn as they were relatively more costly to keep than younger workers performing the same job.

Members will remember the People for Jobs Traineeship Programme (PJTP) which was launched and in that programme, more than 20,000 older workers benefited because this incentivises employers to employ older workers. As announced by the Prime Minister, we will replace this with a more focused programme on vulnerable workers called the Re-Employment Assistance Programme (REAP). Under REAP, the Government will spend about $35 million over the next two years to assist 15,000 unemployed, less-skilled Singaporeans, and these will include older workers, find new employment. REAP has two components - firstly, a national job redesign initiative spearheaded by NTUC and, secondly, re-employment assistance for job seekers who face the risk of structural unemployment.

To study how the employability and job opportunities of older workers can be further enhanced, my Ministry will set up a tripartite committee, comprising key representatives from the Government, employers and trade unions, in the first quarter of this year, ie, next month. The committee will study workplace practices and relevant issues which include the restructuring of jobs, wage and benefit systems, and the changing of employers' perception towards the hiring and retention of older workers.

Mdm Halimah Yacob: Does the Ministry have any strategy against employers who continue to discriminate against older people, despite the fact that they have the skills and experience and they are prepared to accept lower wages?

Dr Ng Eng Hen: I do not think it is quite fair for the Member to tarnish all employers with a single brush. That is certainly not the case. But I do accept

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that older workers do have a lower re-employment rate. Our data suggest that they are not at a higher risk of being retrenched. In other words, of those who are retrenched - sometimes it works against us to say older or younger - if we use the age of, say, 50 and above, in terms of proportion of representation, it will be equivalent to what their share is in the workforce. So in terms of retrenchments, they are not more vulnerable. But they are more vulnerable to re-employment, in other words, once they lose their jobs they find it hard to get re-employed. And there are many factors for this, not necessarily, across-the-board, just employers' discriminatory practices.

So the first point is that, on a systemic level, I do not think we should assume that employers are discriminating against older workers. We have to study in detail, and this is what the Tripartite Committee for Older Workers will look at, in other words, what are the problems they face. Sometimes, it is just work practices. For example, Members of the House will know that certain employers change particular practices. McDonald's did, for example, lower the shelves so that when people put the stored packages, it would be easier for them, and older workers applied for those jobs. It is multifactorial. It would be wrong and misleading and, in fact, it would work against us if we start from fixed assumptions. So let us examine the problem and let us look at why older workers do find it harder to get re-employed and come out with solutions that are workable.

Dr Lily Neo (Jalan Besar): May I ask the Minister whether there will be more incentives, such as tax incentive for rebates, to encourage employers to employ older workers? Is it time to review the various retraining schemes to expand the effective ones and to make them available to the majority? Will he make it more attractive, especially in

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terms of financial needs, to attract more people to take up the retraining opportunity? Lastly, is it correct that the lesser take-up rate of retraining was due to a lack of suitable matching job placements? Therefore, will he put a system in place to get greater success rate?

Dr Ng Eng Hen: Sir, all the above points that Dr Lily Neo has brought up are worthy of consideration. Let me just address them broadly. Yes, we need to improve our results, especially when there are employment opportunities that come about as our economy goes on an uptake. And as I said, there are many factors why the older workers have a lower re-employment rate, some of it may be due to a lack of skills, training or aptitude. We will address these. I do not think it is so much the financial aspects, which deter older workers from going for training. In fact, our data suggest that they do go for training. But the Member is quite right that some of them may not want to go for training because they do not see the benefit at the end of their training. And this is something that we want to address. In other words, we used to go towards what we call "Train and Place". We train you first and then place you in the job. We found that it is not as effective as "Place and Train". We put you into a job and you recognise your skills mismatch. There is more motivation because you know that there is a job waiting for you at the end of it. We think that is more targeted and that would be generally the direction which our programmes are placed.

On top of that, as I mentioned, under the Re-Employment Assistance Programme, we will incentivise these workers to stay on the job by giving them adjustment allowances as they stay longer in their jobs, whether it is three or six months. The idea is that if we can get

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you over the initial hurdle, the psychological barrier, the workplace adjustment, over the first three months, you are more likely to stay and therefore reduce your retrenchment risks. So that would be the general direction that the REAP programme will go. We will redesign the jobs so that the older worker feels that he can do the job. And my officers on the ground tell me that is an important psychological aspect. Many of them leave the workplace not because the employer tells them that they are not doing the job properly but because they feel that they cannot contribute. So we need to redesign certain jobs, whether it is through mechanisation or review of work processes, so that the older workers feel that they can give the economic value-add and we will train them to be productive on the job as well.

Mdm Halimah Yacob: Sir, I would like to thank the Minister for his explanation and I was not making a general statement. I was asking whether a strategy is in place on the part of the Ministry. Specifically, I would like to ask: if a complaint is received from an older person that he is being discriminated against, despite having all the required attributes, what specific action can the Ministry take in order to assist him?

Dr Ng Eng Hen: Sir, the Member is a seasoned unionist and she attends these international forums, and she will recognise that even if we put in place legislation against so-called discriminatory practices, it is very hard to prove at the workplace. In other words, if someone does not want to hire you or someone fires you, there could be a multitude of reasons that they can put forth. So the solution, I think, needs to be beyond legislation. The retirement age, as we have already indicated at some point of time, will need to be raised to support these measures. But even in countries with a higher retirement age, the effective retirement age is much lower than the

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statutory retirement age, which means that at the marketplace it does not quite work flow-through, and this is where we need to focus. This is where the Tripartite Committee on Older Workers will have to work very hard to look at these factors. Yes, it would also involve, for some employers, the changing of mindset so that they are not biased against older workers. It will also mean job redesign. It will also mean certain financial aspects. It may mean certain incentives. We will look at all of these. The Committee is given a timeline of about six to nine months for it to complete its job.

Let all the social partners come together to work out an adequate roadmap for us to change this, because this is a long-term problem. We are all growing older as a population. This will be with us for a long time. This is not a one-off exercise, and it is not a trivial exercise. It will significantly impact our competitiveness down the road. This is a major problem that we will have address, ie, how we can continue to be cost-competitive, even as our population ages.

Dr Lily Neo: May I ask the Minister when will he raise the retirement age or implement flexible retirement age to enable workers to work beyond the age of 62?

Dr Ng Eng Hen: Sir, this is one of the aspects we will allow the Tripartite Committee to debate upon. We have already indicated that we want to raise the retirement age. But the point is that legislation can help but it is not a panacea. It will not solve all our problems. As I said, there are many things that we need to do, so let us get cracking, and retirement age will be one of them.