SINGAPORE - Any changes to the law on retirement and re-employment should not remove protections for older workers from being dismissed on account of their age, said President Halimah Yacob on Friday.
She was referring to points made in a speech in Parliament on Wednesday by East Coast GRC MP Jessica Tan who said the Retirement and Re-Employment Act could be a double-edged sword.
Ms Tan noted that companies may see it as a risk to hire a senior person if he turns out not to be a good fit for a role, as the company will be required to offer re-employment to the person upon reaching retirement age.
Under the Act, when an employee reaches the retirement age - currently 63 - the company will have to re-employ him or her until the person reaches the re-employment age, which is currently at 68.
In a Facebook post, Madam Halimah said to ensure that companies do not get around the law and dismiss an older employee before he or she reaches retirement age, the law provides that it is an offence for employers to do so.
"But it does not affect an employer's ability to terminate an older employee on account of proven misconduct or incompetence or other valid reasons related to the performance of his duties regardless of his age," she added.
The position remains the same today with the retirement age of 63 and the re-employment provision added to the law, she said.
Madam Halimah noted that the law already provides a mechanism to deal with issues arising from older workers' contention of wrongful dismissal on account of age and employers' assertion that the reasons are work-related.
"It's in both the workers' and employers' interest to maintain this provision," she said.
On Wednesday, Minister of State for Manpower Gan Siow Huang said in response to Ms Tan that an employer who is unable to identify a suitable position to re-employ the senior worker can, as a last resort, provide an Employment Assistance Payment in lieu of re-employment.
This is to help the worker tide over while seeking alternative employment.
Madam Halimah said on Friday that another element to ensure this law is effective is to provide structured training to older workers so that they remain fit to do their jobs when companies restructure or automate.
Ms Tan in her speech also called for structural change around learning, employment models, work processes, human resource practices and career planning to better harness a multi-generational workforce.
Madam Halimah added: "And that training should not start only when they are about to retire. It should be part of a company's policy, in its own interest, to consistently develop every worker that it employs to realise their fullest potential."
It is also necessary to ensure that the push for the employment of older workers is meaningful, she said.
"Many good employers realise the value of older workers and continue to provide them with meaningful job opportunities. I hope that more employers will do so."
Describing the Act as a piece of legislation that is "largely misunderstood", Madam Halimah said she was involved, while working at the National Trades Union Congress, in the original Act that was passed for the first time in Singapore's history in 1993 to stipulate a minimum retirement age.
Before that, the norm was to retire people at 55 and, in the case of unionised workers, at 60 under collective agreements.
With a shrinking workforce, that was untenable when people were still productive and could continue to contribute, so the law provided a minimum retirement age of 60, said Madam Halimah.
"The retirement age today is 63 years. Employers are at liberty to retire people at a much later age," she added.
Singapore's population is ageing rapidly, with the proportion of citizens aged 65 and above at 18.4 per cent in 2022.
By 2030, around one in four citizens - or 23.8 per cent - will be 65 and above.