Singapore’s New Fair Consideration Framework
December 31, 2013
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The Fair Consideration Framework (FCF) was announced by Singapore’s Ministry of Manpower on 23 September 2013. Set to take effect on 1 August 2014, it comprises a set of rules designed to remind employers to consider the suitability of Singaporean workers for professional, managerial and executive (PME) roles before seeking to fill these vacancies with foreign talent.
With foreigners making up one-third of Singapore’s workforce, there has been growing concern amongst Singaporeans that they are being bypassed by employers in favour of foreign applicants. It is hoped that the new framework will help allay the concerns of Singaporeans regarding what they perceive as discriminatory hiring by some employers and foreign recruitment managers who hire their own nationals.
The aims of the new framework
The FCF does not stipulate a “Singaporeans first” or “Singaporeans only” recruitment policy. The government has made it clear that it is neither turning away foreign executives nor foreign investment. Rather, it aims to ensure that Singapore continues to remain open to overseas candidates but without marginalizing its own pool of PMEs.
The government’s light touch is intended to give Singaporeans a fair chance of competing with foreigners in their own country. The government is concerned to ensure that the hiring process is fair and that Singaporeans are considered on merit, and that it is more difficult for employers who engage in discriminatory hiring to continue with such malpractice.
The Ministry has clearly stated that it will not review the merits of a company’s hiring decision as the company is best placed to decide which candidate is the best fit for the job in terms of qualifications, work experience and other qualities. However, recalcitrant employers who fail to prove they have conducted satisfactory due diligence when trying to hire locals could have their rights to hire foreigners temporarily suspended or cut.
The new job bank
Key to the FCF’s success will be the creation of a government-run job bank administered by the Singapore Workforce Development Agency. It will be mandatory for companies to open up PME jobs to locals and to consider them fairly for these positions by advertising in the job bank for at least 14 days. If there is no suitable local candidate for the job, the company can then submit an employment pass application to hire a foreign resource.
The job bank will be free for both job seekers and employers and will have the benefit of bringing them onto one platform that offers greater visibility as to the types of jobs that are emerging. The job bank can also be used to map trends and mine data to help create training initiatives that ensure the local workforce’s skills remain current and relevant. It will also help to highlight industries which may not be popular with Singaporeans so steps can be taken to redesign or repackage these jobs to entice the local workforce.
The government will also consult with private job portals to explore possible collaboration to help improve overall market efficiency and visibility of job opportunities for local job seekers.
As part of the new framework, employers are also being encouraged to focus on providing training to locals to grow and develop their skills, with the aim of building a core national workforce that will be supported, supplemented and augmented by foreign talent. By doing this, the new framework will help to ensure that foreign manpower will complement rather than undercut the skills of the local workforce.
To further level the playing field for Singaporeans, the fixed monthly salary threshold for foreigners to qualify for the application of an Employment Pass will be increased from SGD 3,000 to SGD 3,300 with effect from 1 January 2014.
It is hoped that the new rules will inspire Singapore’s PMEs to feel confident that they stand a fair chance at gaining a job, without the system being overly onerous for employers.
Key points to note under the FCF include:
Effective date
The effective date for the FCF is 1 August 2014.
Key Features
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All employers are encouraged to advertise job vacancies and ensure that these jobs are open to Singaporeans;
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Employers making new Employment Pass applications must first advertise the job vacancy on a new job bank to be administered by the Singapore Workforce Development Agency. The job advertisement must:
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be open to Singaporeans;
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comply with the Singapore Tripartite Guidelines on Fair Employment Practices; and
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must run for a minimum of 14 days.
Exemptions
Employers with less than 25 employees, or job positions with a fixed monthly salary of SGD 12,000 or more, are exempted from the requirement to advertise in the job bank.
Possible actions by the Ministry of Manpower
1. Firms which have a disproportionate number of Employment Pass holders or who continue to adopt discriminatory practices may be put under additional scrutiny and be asked to furnish additional information such as:
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organization charts outlining the nationality of various employees;
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the recruitment process;
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staff grievance handling procedures;
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framework for staff progression; and
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plans to develop local staff and plans to reduce reliance on Employment Pass holders.
2. The Ministry of Manpower may impose additional requirements on employers who fail to show sufficient progress. Such requirements may include:
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an attestation that the employer will not displace any similarly employed Singaporean within 60 days before or after applying or renewing Employment Passes;
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displaying a factsheet containing key information submitted to the MOM at the workplace;
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greater scrutiny and longer review of Employment Pass applications; and
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curtailment of Employment Pass privileges.
New qualifying salary for new Employment Pass applications
The qualifying fixed monthly salary for new Employment Pass applications will be raised from SGD 3,000 to SGD 3,300 on 1 January 2014.
Transitional measures
To help employers manage the changes, the following transitional measures have been introduced:
1. All new Employment Pass applications are subject to the new qualifying salaries from 1 January 2014.
2. For existing Employment Pass holders, the new requirements will be phased in as follows:
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existing Employment Pass holders whose passes expire before 1 January 2014 will receive a one-time renewal based on existing qualifying criteria;
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existing Employment Pass holders whose passes expire between 1 January and 30 June 2014 will receive a one-time renewal for one year only, based on existing qualifying criteria; and
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existing Employment Pass holders whose passes expire on or after 1 July 2014 will be subject to the new qualifying criteria.
3. The transitional measures outlined above apply only if the holder of the Employment Pass does not change employers.
