Singapore To Introduce “Fair Consideration Framework”

About The “Fair Consideration Framework”

The Fair Consideration Framework (FCF) is a new guideline announced by Singapore’s Mininstry of Manpower that requires employers to consider Singaporeans fairly for all job opportunities before hiring Employment Pass (EP) holder.

The ministry stressed that the rules are not meant to be a “Hire Singaporean First” policy but about fairness in hiring. Singapore will remain open to imported skills and talent. Firms that are unable to find “suitable” Singaporeans can still bring in those with the skills needed from overseas.

The New Job Advertising Rule

From 1st August 2014, companies seeking foreign professionals, managers and executives (PMEs) for jobs paying up to S$12,000 must first advertise the job vacancy on a new jobs bank administered by the Singapore Workforce Development Agency before an EP application for a foreign professional will be reviewed. The advertisements must be open to Singaporeans.

Exemptions will be given to small companies with 25 or fewer headcount and jobs with fixed monthly salary of S$12,000 and above.

The new jobs bank will go online by mid-2014.

Additional Scrutiny For Firms Which May Have Discriminatory HR Practices

Firms that attempt to “go through the motions” or may have scope to “improve their hiring and career development practices” could face additional scrutiny by the Ministry.

In its press release, the Ministry cited such firms to be those that may have disproportionately low concentration of Singaporeans PMEs compared to others in the their industry or have had repeated complaints of nationality-based discrimination. Such firms will be asked to provide additional information to MOM such as:

  • Organisation charts with nationality information;
  • Recruitment processes;
  • Staff grievance handling procedures;
  • Framework for staff progression; and
  • Plans to develop local internal staff to take on higher roles or reduce reliance on EP holders.

If firms are not responsive towards improving their recruitment and training processes, the ministry may impose additional requirements. They include attesting that the firm will not displace any similarly employed Singaporean within 60 days before or after applying for an Employment Pass. Recalcitrant firms may have their work pass privileges curtailed.

Selected firms under additional scrutiny will be notified by the first quarter of next year.

Raising Of Minimum Monthly Salary For EP Holder To S$3,300 Or More

With effect from January 2014, the qualifying salary for new EP applications for fresh graduates will be raised from S$3,000 to S$3,300. Older applicants will have to command higher salaries to qualify, commensurate with the work experience and quality they are expected to bring.

Existing EP holders whose passes expire before January will receive a one-time renewal based on the existing EP criteria.

Those whose passes expire between 1 January and 30 June 2014 will receive a one-time renewal of up to one year based on the existing EP criteria. After 30 June 2014, all existing EP holders will have to meet the new criteria.

Getting Prepared For The FCF

While the Ministry has reiterated that the new FCF is not intended to compel firms to give priority to locals, the new requirements coupled with the recent range of various measures to tighten labour inflows would certainly make it more difficult for firms to hire foreign professionals.

Business owners and HR practitioners of companies who need to hire foreign PMEs are advised to review their hiring process and policies ahead of the implementation of FCF.

Employers are encouraged to keep records of their interview process as proof that they have adequately assessed local PMEs in filling a position.

It is also important to look at your current talent pipeline and have development plans to nurture existing talents for higher roles. With a well thought development plan and a change in mindset, employers may find suitable local professionals to fill the jobs and thereby reduce their reliance on EP holders for jobs at PME level.