Employers buck bill lifting retirement age cap

Published August 14, 2022, 9:45 PM

by Bernie Cahiles-Magkilat

The management sector has opposed a legislative measure that would remove the compulsory retirement age of 65, stressing it should be a management prerogative whether to retain or not an employee, who has reached the retirement age.

Sergio Ortiz-Luis, Jr., president of the Employers Confederation of the Philippines (ECOP), said in reaction to the proposed House Bill 3220 filed by Senior Citizen party-list Rep. Rodolfo Ordanes Jr. The proposed bill seeks to amend the Labor Code of the Philippines, which sets the compulsory retirement age at 65 as long as the senior citizen ““qualifies under the bona fide occupational qualifications of his job.”

Ortiz-Luis explained that a mandatory no retirement age cap would be counterproductive.

For one, he said, removing the retirement age limit for an employee would put a company’s productivity at a disadvantaged given the fact that seniors may have lower output than the young workers. He also finds it onerous that the bill also put the burden upon the employer to prove that the worker is still “fit” to work in the company.

In addition, he said, the bill would only worsen the unemployment in the country as new labor entrants or new graduates may not be able to get hired because there are fewer vacant positions.

He also warned that having more seniors in a company would also put a strain on pension fund agencies’ resources as elderly workers, normally have more medical claims.

“Social Security System and Pag-Ibig cannot afford such claims, they will have to refocus on their capability in terms of insurance,” he pointed out.

“In the end, it is not a healthy atmosphere anymore because employers will lose control in the management of their workers,” he said.

Worse, he warned that removing the retirement age cap would only discourage capitalists to invest in the Philippines.

Instead, Ortiz-Luis said the management should be given the prerogative to retain a retiring employee or not. “We are always in favor of non-discriminatory practices in hiring workers, but we are against removing the mandatory retirement age cap,” he said.

There are companies that continue to employ their workers beyond retirement age. In this case, he said, these companies can pass a resolution extending their benefits. Some companies though still hire some of their retiring employees as consultants, but without the benefits of regular employees.

“There is no problem to extend the retirement of an employee but the law must also provide an option for the employer to decide to retain or retire the employee, and not put the burden on the employer to prove that the employee is no longer fit to work in his company,” he said.

While the retirement age in the private sector is 65, the government has set the cap at 60 for civil servants, although military personnel are retired at an earlier age of 55. Ortiz-Luis, however, pointed out that some of the newly appointed top government heads are already past 70 years old.