Hi HR Practitioners,
I was recently been informed that the company will not re-elect employee that holds the Position of a Director when person reaches 62. No re-employment will be offered due to the fact that the company deemed a Director as the employer, hence, once person reaches 62, he or she Will be forced to be retired.
However, as Singapore has the retirement regulation of 65 and increased to 67 from next year July, Will such employee falls under the re-employment criteria as well. The catch is also under the company’s constitution, all Directors has to be retired yearly and be re-elected. As such an employee will also be on the under hand if he or she is promoted to the position of a Director and thereafter the next year, he or she is not being re-elected, this person will then have to leave the company.
Please share your opinions on the company’s right in this context.
1. My input for your consideration.
1. Definition- I believe the word ‘Director ‘ used here refers to a member of the Board of Directors, and not referring to a position title such as Director(Finance), Director (Human Resources) , etc. If that is the case, such directorship
a) Is not obtained through promotion. A director in the former sense is being nominated/appointed by the shareholders of the company, and the duty is not on the daily routine works RUN BY MANAGEMENT , as the Board of Directors normally meets only 3 or 4 times a year to review, discuss performance of the company with senior management team
b) Is therefore not deemed to be the employer of the company.
2. Executive vs. non-executive directors- If a director is being appointed and he is also working in the company (e.g. GM or CFO) . such directors are being called as executive directors, those directors who are not the employees of the company are called non-executive directors.
Following the above, if an executive director ( working in the company) is being appointed, he is still an employee of the company, and therefore should be given the same treatment of retiring at the age of 65 years old , or 67 years old next year, whether or not he is being re-elected.