Singapore's Fair Consideration Framework: Refinements are Underway

On 23 September 2013, the Singapore Ministry of Manpower (MOM) announced the Fair Consideration Framework (FCF), which will take effect on 1 August 2014. The FCF 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.

 

These new rules include mandatory advertising in a government-run job bank, coupled with increased scrutiny of HR practices and enhanced employment pass qualifying requirements. It will become 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 may then submit an employment pass application to hire a foreign resource.

 

Earlier, the MOM announced that small companies with 25 or fewer employees and jobs paying a fixed monthly salary of SGD12,000 and higher will be exempt from the job bank advertising requirement. Whilst the MOM is still working to finalize the specific implementation details before 1 August 2014, we understand that intra-company transferees (ICTs) will now also be exempt, although this has yet to be formally announced by the MOM.

 

It is expected that the FCF will be applied in a manner consistent with Singapore’s World Trade Organization and US-Singapore Free Trade Agreement obligations. These international agreements clearly define ICTs as Managers, Executives and Specialists and an individual will need to satisfy a number of criteria in order to qualify. It is anticipated that before the advertising requirement comes into effect, the MOM will amend its Employment Pass Application Form to include a question on whether the applicant has worked in an overseas subsidiary, branch or affiliated company, including the name of the company and the duration of employment. The MOM may also require supporting documentation, such as an organization chart showing the applicant’s position, in order to ascertain if he or she qualifies as an ICT.

 

The requirement to advertise will also not apply to employment pass renewal cases, unless the employer has been identified by the MOM as one with discriminatory hiring practices or scope to improve its hiring and career development practices. In these cases, the MOM will notify such firms in writing.