13th month pay 'part of basic wage' in SIA case

The 13th month annual wage supplement is part of basic pay, an English court has ruled, in a case involving Singapore Airlines and a consultant firm.

The issue had emerged as a preliminary point to be settled in a court suit in London between SIA and Buck Consultants. SIA hired Buck in 1997 as a pension benefits consultant and administrator. But the airline sued Buck for alleged negligence over its drafting of revised pension scheme rules in 2000.

While the ruling is not legally binding here, lawyers say that the Englishcourt's rationale could be a reference point for employers mulling over whether to give the 13th month pay to older workers renegotiating their jobs. An SIA spokesman said the ruling had no impact on the airline as it had been including the 13th month payment when rehiring workers in Singapore past the retirement age of 62.

'The recent ruling in the UK court has no bearing on the practice,' he said. Under newly enacted laws that took effect this month, employers must offer re-employment to workers who turn 62, though not necessarily in the same job or on the same terms.