Lowering retirement age not the answer to youth unemployment

KNUT Secretary General Collins Oyuu.

Parliament is considering reducing the mandatory retirement age of public servants, including teachers, from the current 60 years to 55 to give young people an opportunity to be employed in public service in Kenya. The National Assembly's Labour Committee announced on August 3, 2023 that it will introduce an amendment to the proposed legislation capping the retirement age at 55.

The Bill also seeks to amend the current Act by requiring that no officer serves in an acting capacity for more than six months. In the teaching service, there has been an outcry over the commission appointing teachers to act in administrative positions without substantively confirming them for more than two years. Amending this particular clause would be a blessing to the teaching fraternity.

It is important, however, to know how the 60 years retirement age was arrived at and what benefits it had to the employer, the employee and our economy so that they can engage and amend legal provisions related to the same if necessary.

Workers experience, saving on costs of employment and institutional memory in service might have been reasons for the extension. But saying that the main reason for reducing retirement age is to create opportunities for young people is fallacious.

Employment opportunities are created by expanding consumption of goods and services through good leadership and proper and prudent management of public resources. Curbing corruption and networking with international agencies for more emerging opportunities also helps, be not reducing the retirement age and retrenching workers.

If the proposals are approved, majority of the civil servants expected to retire in the next five years will have to leave earlier. This will have far-reaching consequences, including burdening a government already struggling with finances with a higher pension bill. In six months to December 2021, the National Treasury paid Sh69.22 billion in pension and gratuity due to a big number that exited the public service after serving to the mandatory retirement age.

An audit conducted in 2016 revealed that 35 per cent of national government employees were between the ages of 51 and 60 years. A total of 3,958 officers left the service in 47 ministries, departments, and agencies, according to the Public Service Commission's (PSC) annual report for the Financial Year 2021/2022.

On acting, different employment contracts provide that a person may be appointed in an acting capacity for a period of at least 30 days but no longer than six months. The Public Service Commission (Amendment) Bill, 2023 seeks to entrench this aspect of the employment and appointment provision into law. This will be a blessing to all workers.

The proposed legislation states that an individual can only be appointed to hold a public office in an acting capacity after they have fulfilled all requirements for that specific office. An acting appointment shall be in favour of a public officer who is qualified and competent to perform the duty and not undermine the expeditious appointment or deployment of a competent person to the public office concerned.

If one is appointed in an acting capacity without the requisite qualifications, such appointment will be revoked by the Public Service Commission. This was a firm recommendation by Knut to TSC in an administrative retreat held at Sawela Resort, Naivasha, in September 2022.

Concerning retirement age, at the entry point of any work engagement and when a worker is signing for an employment, several clauses of engagement are documented.

They include; clear terms of entry and exit from employment, the entry and exit date, retirement procedures' benefits, benevolence and any other benefits related to and that are consistent with the terms and conditions of service related to different employment opportunities available.

The Employment Act also provides for the employer to prepare an employee for a specific period of time before s/he proceeds for retirement. Employees are able to organise themselves in terms of personal development when they are certain of their date of exit from employment. They also have a savings plan consistent with the period of time they shall be working.

For instance, banks only offer loaning facilities to workers with their retirement dates as an important consideration. A bank may not offer credit facility to workers for period which exceeds the working period documented in their contract.

So then, in the event the proposed Public Service Amendment Bill 2023 goes through, employers might need to prepare those targeted for retirement in advance so that there shall be psychological acceptance and readiness to embrace the change.

When Kenya and other countries embraced the World Bank and IMF proposal to retrench workers in 1999 in order to reduce the wage bill, most employers did not prepare their employees adequately. The result was that most of them died shortly after. We do not want to experience the same any time in the future.