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Creating and safeguarding jobs have been the Government’s prime objectives currently against the economic downturn pressure brought by COVID-19. The Government last week announced the second round Anti-epidemic Fund – a $137.5 billion package, which included an $80 billion Employment Support Scheme. While the city is preparing for the contingency, formulating a long-term and comprehensive manpower policy has a bearing on the competitiveness and long-term development of Hong Kong. The Bauhinia Foundation Research Centre (the Centre) today released a study on ‘Extending the retirement age and working life: Options stretching beyond legislation’, which has reviewed relevant ordinances on statutory retirement ages in Hong Kong and law enforcing experiences in the United Kingdom (UK) and Singapore. The study aimed to analyse whether by way of legislation can effectively help make workplaces age-friendly, and explore possible non-legislation options that may be considered.
The Centre's Chairman Mr Lau Ming-wai said, ‘Mature persons with rich experiences in life are invaluable human capital to our community. The Government, thus, should ponder over how to unlock the potential of labour force, and provide them with diverse opportunities and choices to facilitate their continuous contributions to society. By doing so, we can turn challenges into opportunities, and effectively alleviate the pressure imposed by an ageing population on public finance. Everyone may have his most desirable age for retirement. Making the workplace age-friendly is a shared responsibility of the whole society, it is time for society, employers and employees to work together paving the way towards progressive retirement.’
According to the Centre’s study of ‘Where to find new key driver: The Emergence of Post-50 cohort, Hong Kong’s manpower strategies start afresh’ (Post-50 Study) released earlier this year, from 1998 to 2018, the labour force aged 50 or above recorded an increase of approximately 800,000 persons, while the labour force aged 15 to 49 reduced by around 270,000 persons. It indicated that the Post-50 cohort has become a new key driver of the labour market over that 20 years. Medical advances and an increase in life expectancy have made it possible that mature persons who are healthy and capable of working can extend their working life. In recent years, some overseas countries have encouraged able and willing elders to work longer through raising statutory retirement age or introducing legislation to deal with age discrimination in employment.
There is no mandatory retirement age in Hong Kong, although retirement age limits are set in specific occupations (such as civil servants and security guards) on need basis. In recent years, the Government indicated that encouraging more citizens to work and extending their working life are one of the population policy objectives. Despite the fact that government departments and a number of public organisations have already extended the retirement age and amended existing laws to raise the statutory retirement age of certain occupations, the current labour force participation rate among mature persons is still lower than that of Singapore, Japan and South Korea. Also, the average retirement age in Hong Kong is even earlier than the above-mentioned Asian countries, as well as some of the Western countries.
Our Post-50 Study pointed out that people aged 50 or above are the new key driver of labour market in Hong Kong. If the barriers to employment of this Post-50 group can be removed, Hong Kong can further unleash the potential of its labour force. Currently, there is no anti-age discrimination law in Hong Kong. The Government advocates eliminating age discrimination in employment with a voluntary approach, such as issuing the ‘Practical Guidelines for Employers on Eliminating Age Discrimination in Employment’, as well as promoting public education and self-regulation. The Government has stated that enactment of anti-age discrimination law is an extremely complex issue, and is likely to be contentious in the legal debate. In addition, the effectiveness of law enforcement may not be ideal. The Government, thus, has no intention to take forward the legislative work at the moment.
To promote sustainable employment of mature persons, employees should be assessed in accordance with the principle of ‘Count on Talent not Age in Employment’. To cope with the shrinking labour force, some regions have introduced statutory retirement ages to extend the working life of mature employees. The Centre believes that legislating retirement age may not be the best option to fit local context, and it is hard to resolve issues relating to age discrimination. Hence, the Centre has proposed the following policy directions which comprise the strategy of ‘Entry’ and ‘Exit’ arrangements. (Please refer to the Appendix for details)：
Direction 1: Legislating retirement age is not a must
Direction 2: Providing protection over age discrimination
Direction 3: Increasing the flexibility of MPF withdrawal to encourage older workers to stay in the labour market
Direction 4: Promoting flexible work arrangements for adoption in the workplace and enabling employees advancing health and well-being into mature age
With reference to the experiences of UK and Singapore, we have found that:
Although the Default Retirement Age (DRA) was introduced in 2006, the UK Government ended up abolishing DRA in 2011 as the impact of DRA on employers’ retirement policy was limited. Despite some employers noted that dismissing employees might be tougher and costly in the absence of the DRA, most firms would encourage elder workers to stay. As a result, the employment rate in UK has surged beyond expectation.
Singapore, on the other hand, has adopted mandatory retirement age, and introduced re-employment age. The idea of re-employment means that employers have an obligation to re-employ their elder employees who have reached their retirement age and meet the re-employment eligibility, or to provide a one-off Employment Assistance Payment to affected employees.
Population ageing, a global issue is expected to continue. It not only poses challenges to the public finance and economic growth, but also accelerates the decline of the labour workforce. However, it may not be easy to shift people’s way of thinking and nurture a culture towards extending retirement age in a short period of time. In the absence of a clear regulatory framework on the statutory retirement age, the Government should provide non-legal means such as tax concession, wage subsidies and public education to incentivise older workers who wish to continue staying in the job market as long as they are willing and able. Employers should also be encouraged to hire mature workers proactively to achieve a win-win situation. At the same time, employers should also shoulder the social responsibility by adopting good human resource management practices and protect mature workers against direct or indirect age discrimination.
In the long run, the Centre believes that inclusive practices to foster age-friendly workplaces should be considered, including public education and social consensus on what changes must be required to facilitate sustainable employment policies for mature persons to be accomplished. Where appropriate, the process for the enactment of statutory retirement age and anti-age discrimination should be gradual and any policy or legislative changes towards the employment of mature persons have to be fully deliberated. Upon the thoughtful and careful examinations carried out by the Government and stakeholders, we can make good use of the city’s human resources and mobilise the forward development of our society.