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29 November, 2010
For over a decade in Singapore, it had been common practice for employers to reduce salaries of workers by 10% once they turn age 60. That practice is now coming to a screeching halt as trade unions, in a united front, have convinced employers that the practice is degrading and discriminatory.
Seven unions over the past several months, including the Chemical Industries Workers’ Union (CIWU) and the Metal Industries Workers’ Union (MIWU), have now negotiated an end to the cut-at-60 practice in an important labour development on the island-nation.
Over 34,000 workers will this year no longer have to witness pay cuts just because they reach age 60. The recent initiative was not instituted by law, but rather came from a strong public urging to employers by National Trades Union Congress (NTUC) General Secretary Lim Swee Say and Singapore Manpower Minister Gan Kim Yong.
Under some of the negotiated agreements, workers age 60 or above must undergo performance-based indicators to retain their salaries, but in others they do not. The MIWU had elimination of the practice incorporated in all collective agreements. That affected 11,000 senior workers for the good. One union, the Singapore Airport Terminal Service Workers’ Union, will have the no-cut-at-60 language finalized in December, with payment of salaries that were cut back to January 2010 restored.
Other unions that have succeeded in eliminated the practice include the NatSteel Employees’ Union, the Singapore Bank Employees’ Union, the DBS Bank Staff Union, and the Union of Telecoms Employees of Singapore. Elimination of the practice at scores of private-sector employers by the CIWU affects 4,500 senior chemical and petrochemical workers.
The practice began in 1999 when the retirement age was raised to 62 in that year. The Retirement Age Act was then amended to give legal status to the cut-at-60 practice.
NTUC Deputy Secretary General Heng Chee How said it was encouraging that a great number of companies from many different industries and sectors had reviewed with unions the regressive practice and decided to end it.