Legal Briefing

Fair Consideration Framework: 
one year on

The In-House Lawyer Logo

Immigration | 01 April 2015

In late 2013, the Singapore Government announced that the introduction of the 
Fair Consideration Framework (FCF) would 
be made mandatory on all employers of foreign nationals in Singapore with effect from 1 August 2014.

Since this date, all employers doing business in Singapore have been expected to consider Singaporeans fairly for job vacancies and to comply with the Tripartite Guidelines on Fair Employment Practices. The main objectives of the Framework are as follows:

  1. To ensure that ‘Singaporeans’ (Singapore citizens and Singaporean permanent residents) have fair access to job and development opportunities; and
  2. To set out required standards for hiring practices.

There are five principles of Singaporean fair employment and hiring practices:

  1. Recruit and select on the basis of merit (such as skills, experience or ability to perform the job) regardless of age, race, gender, religion, marital status and family responsibilities, or disability.
  2. Treat employees fairly and with respect, and put in place progressive human resource management systems.
  3. Provide employees with equal opportunities to be considered for training and development based on their strengths and needs, to help them achieve their full potential.
  4. Reward employees fairly, on the basis of their ability, performance, contribution and experience.
  5. Abide by the labour laws and adopt 
the Tripartite Guidelines on Fair Employment Practices.

Indicative of this new approach is that companies have been required to advertise vacancies in the WDA (Singapore Work Development Agency) Jobs Bank before filing new Employment Pass (EP) applications. The advertisement must show that the vacancies are open to all Singaporeans, and will have to comply with the Tripartite Guidelines on Fair Employment Practices. In addition, the advert must 
run on the WDA Jobs Bank for at least 
14 calendar days.

CURRENT PRACTICE

At present, foreigners who wish to work in Singapore and have a job offer from either a Singapore-based entity or (if the prospective employer is not registered in Singapore) a sponsor based in Singapore can apply for an EP, subject to meeting the relevant pass criteria.

EPs are available for applicants who earn a minimum monthly salary of SG$3,300. These are typically young graduates of reputable educational institutions. Older applicants are expected to command higher salaries to qualify for the EP, commensurate with the work experience and quality they are expected to bring to Singapore. There is now a requirement that a Singapore based employer should advertise the role within Singapore, and all employers are expected to implement fair employment hiring practices in respect of local recruitment.

As an indication of a shift in public sentiment with regard to immigration, the government’s approach is to help maintain a level playing field, and help equip Singaporeans with the skills they need to fill ‘quality jobs’ – and the FCF is seen as a crucial aid to the achievement of this objective.

ADVERTISING REQUIREMENTS

As noted above, all jobs in Singapore must be advertised locally, unless an exemption applies. Specific requirements in relation to adverts are as follows:

  1. When companies wish to hire a foreigner for a job that has been advertised, an application for an EP must be made within three months of the closing date of the advertisement, otherwise a new advertisement will need to be posted.
  2. The advert must include information such as the job title and closing date, along with skills, experience and qualifications required to undertake the role. Employers do not need to state the salary range for the position in the WDA Jobs Bank if the intention is not to hire a foreigner for the position. However, if there is a possibility that the company may wish to consider a foreigner for a position, companies are strongly advised to state the salary range.
  3. A salary range is needed by the Ministry of Manpower in order to assess the EP application, and although the salary range does not need to be made public, an EP application will not be approved if it is not stated in the Jobs Bank. In this situation, employers will need to re-post the advert, in some cases delaying the recruitment of a foreigner for a further 14 days.

EXEMPTIONS

At time of writing, there are five circumstances in which certain employers will be exempt from the FCF advertising provisions. These are:

  • companies with 25 employees or less based in Singapore;
  • jobs advertised paying at least SG$12,000 per month;
  • employees who are considered to be intra-corporate transferees (ICT);
  • pass upgrades within the same company; and
  • roles for an intended duration of one month or less.

The Ministry of Manpower strongly encourages all firms to advertise their job vacancies, even if the role is in one of these five exempt categories. Regardless of whether the job vacancies are exempted from the advertising requirement, firms found to have nationality based or other discriminatory HR practices will face additional scrutiny from the Ministry of Manpower and could have their work pass privileges curtailed.

COMPANIES WITH 25 EMPLOYEES OR LESS

The Ministry of Manpower has devised a ‘warm body concept’ to identify these companies, where the total employees would include all local employees with CPF (Central Provident Fund) contributions, along with any foreign employees, including those on mainstream work passes (EP/S-Pass/work permit) and those on all other work passes; such as LOCs (Letters of Consent), PEPs (Personalised Employment Passes) and training passes.

The Ministry of Manpower will be updating this ‘warm body concept’ figure on the last Saturday of the final month in each quarter (ie March, June, September and December) – it is important to note that this is not the same as the total workforce used for the purposes of computing a company’s quota under the S-Pass.

JOBS ADVERTISED PAYING AT LEAST SG$12,000 PER MONTH

The job must attract a fixed monthly salary in excess of SG$12,000. In calculating whether an individual can satisfy this exemption, it should be noted that the fixed monthly salary is made up of the basic monthly salary plus fixed monthly allowances. These figures consist only of guaranteed, fixed payments (such as monthly salary, and food or housing allowance) which are not subject to performance or discretionary award. Specifically, payments relating to overtime, commission, bonuses, expenses reimbursement etc are not permitted to be included in the SG$12,000 figure.

EMPLOYEES WHO ARE CONSIDERED TO BE INTRA-CORPORATE TRANSFEREES (ICT)

In order to be considered an intra-corporate transferee, the Ministry of Manpower states that the individual must have worked in the company for at least one year before being seconded to the subsidiary or affiliated firm in Singapore and prior to the EP application; and fall within one of the following categories:

a) Manager

Primarily directs the organisation or a department or sub-division of the organisation; and who:

  1. supervises and controls the work of other supervisory, professional or managerial employees; and
  2. has the authority to hire and fire or take other personnel actions (such as promotion or leave authorisation); and
  3. exercises discretionary authority over day-to-day operations.
b) Executive

Primarily directs the management of the organisation; and who:

  1. exercises wide latitude in decision-making; and
  2. receives only general supervision or direction from higher level executives, the board of directors, or stakeholders of the business.
c) Specialist

Possesses knowledge at an advanced level of expertise; and

  1. Possesses proprietary knowledge 
of the organisation’s service, 
research, equipments, techniques 
or management.

PASS UPGRADES WITHIN THE SAME COMPANY

The Ministry of Manpower allows for an exemption to the advertising requirements of the FCF, in circumstances where the individual looking to obtain an Employment Pass is already employed by the company on the same or a different pass. This exemption applies to individuals who, for instance, are looking to convert their S-Pass to an EP, or alternatively allows for EP holders to extend their periods of stay in Singapore, without the need for their current role to be advertised.

JOBS FOR AN INTENDED DURATION OF ONE MONTH OR LESS

The Ministry of Manpower allows for an exemption in relation to jobs which are for an intended duration of less than one month. The EP will be valid for a 30 day period from date of issue of the pass.

CONCLUSION

The FCF seeks to redress the balance between using foreign talent and protecting the local workforce. The FCF is not a ‘hire Singaporeans first’ policy; it is about giving a fair chance for Singaporeans to compete.

The Ministry of Manpower will be seeking to use the data gained from the implementation of the FCF to consider whether further changes are needed to protect the local workforce and identify what foreign talent is required and in which sectors. We expect further changes to be implemented in the coming months and years as Singapore (along with most of the world) deals with the politically sensitive issue of immigration