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A new survey conducted by NTUC found the private sector is better at maintaining pay packages when rehiring older staff than the public sector.
The Straits Times reported close to 80% of unionised companies in the private sector did not reduce the pay of employees rehired at the age of 62.
In contrast, public servants can find themselves facing a pay cut of up to 30% when they are re-employed.
“(The findings are) our additional basis to ask that the formula to determine re-employment pay be reviewed in the light of the findings for the broad private sector,” Heng Chee How, NTUC deputy secretary-general, said.
He added the union is not implying rehired employees’ salaries cannot be adjusted to be lower; however “the default should be to consider the value of the job and the contribution of the person, rather than the formula”.
Currently, public sector employees will have their salaries readjusted to the mid-point of the salary scale they are at, or 70% of their last drawn salary, whichever is higher.
Heng added the labour movement is also pushing for the re-employment age limit to be increased from 65 to 67, so productive employees will still be able to contribute.
“The process of going from 65 to 67 will again require more learning on the ground, which is why I want the process of collecting data and learning and discussing to begin sooner rather than later.”
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