The Arrival of FCF in Singapore
September 30, 2014
Singaporean workers are set to see an improvement in job prospects since the introduction of the Fair Consideration Framework (FCF) on 1 August 2014. Designed to help establish a strong local workforce by improving the way companies hire and develop Singaporeans, the FCF requires employers to consider the suitability of Singaporean workers for professional, managerial and executive roles (PME) before seeking to fill these vacancies with foreign manpower. To further level the playing field, steps were also taken at the beginning of the year to increase the qualifying monthly salary necessary for the granting of an Employment Pass from SGD 3,000 to SGD 3,300.
How does the FCF work?
The new rules require companies to advertise vacancies for positions paying less than SGD 12,000 per month fixed salary in the Jobs Bank, a recently introduced public platform facilitating job matching between local individuals and employers. Positions must be advertised for at least 14 days before an Employment Pass application can be submitted to hire a foreigner.
In the lead-up to 1 August, the Ministry of Manpower’s Fair Consideration Department has engaged firms across different industry sectors to better understand their HR practices and efforts to develop Singaporeans at the PME level. Other than the Ministry, agencies such as the Economic Development Board (EDB), Infocomm Development Authority of Singapore (IDA) and the Monetary Authority of Singapore (MAS) also engage their stakeholders and industries on the need for the FCF and for employment practices to be fair and merit-based. Companies requiring assistance to shape or improve its hiring and career development practices are encouraged to consult the Tripartite Alliance for Fair and Progressive Employment Practices for guidance.
Does the FCF apply to all jobs?
Exempt from the advertisement requirement are positions paying above SGD 12,000 per month, companies with 25 or fewer employees, foreigners on short-term assignments not exceeding one month and intracompany transferees (ICTs) who are in manager, executive or specialist positions and have worked for the overseas firm for at least one year. It is important to take the correct approach in deciding whether to advertise or apply under an exemption as the authorities may reject an application if they do not consider the employee as falling within the exemption.
How big is the Jobs Bank?
The Jobs Bank is intended as an exclusive gateway to help locals to market their skills. In addition to supporting the advertising requirements implemented under the FCF, the Jobs Bank provides companies with access to a pool of local candidates for selection. Since going live in July, it has attracted registrations from more than 4,300 employers and 12,900 individuals, resulting in approximately 16,000 job opportunities being made available to Singaporeans. It has been reported that almost half of those job postings were targeted at PMEs.
Overseeing the FCF
Reports show that issues involving unfair employment opportunities and discrimination top the list of Singaporean workers’ concerns, with preferential hiring of fellow countrymen by foreign hiring managers being the main cause for complaint. As a result, and in line with FCF policy, companies which have a disproportionately low concentration of Singaporean employees at a PME level compared to other players in the industry will be subject to greater scrutiny by the authorities, including investigation by MOM and other government agencies. Unresponsive companies which do not take steps to improve their human resource practices risk having their ability to hire foreign manpower curtailed.
How is the FCF being enforced so far?
The objective of the FCF is to encourage companies to give Singaporeans fair consideration when looking for resources. However, it is the employer who is ultimately left to decide on the best person for the job and may still choose to hire a foreigner despite the position being advertised in the Jobs Bank for the required 14 days. There is presently no requirement for Singaporeans to be interviewed before an Employment Pass application is submitted to hire a foreigner, although the application does ask if any locals were interviewed and the reasons they were not successful in being selected for the role.
While companies are being encouraged to consider Singaporeans fairly, the authorities have also assured businesses that they will still be able to hire and bring in skills from abroad to build a strong team of both local and foreign workers. However, it is still unclear how checks on companies and recruiters will be undertaken; in particular, the standards against which employers will be assessed to determine compliance with the FCF and whether they employ a proportionate number of local workers to foreign employees. The authorities have mentioned that they will be comparing companies across industries to identify the correct proportion between locals and foreigners, but there are no specific guidelines which have been released yet. It can be difficult for companies to understand the expected proportion applicable to them and how successful they are in meeting it.
