EP criteria refined to prevent build-up of pass-holders in some sectors

SINGAPORE — The application process for Employment Passes (EPs) has been refined with additional criteria for firms to ward off a “highly undesirable” concentration of Employment Pass (EP) holders in certain companies, segments of industries and locations, said Manpower Minister Lim Swee Say on Friday (April 8).

In the past, such passes were approved based on an applicant’s qualifications, experience and salary. But since October last year, companies applying for EPs have been scrutinised on their ratio of locals to foreigners in the firm compared with the rest of the industry, as well as their commitment to developing locals. They are also assessed on their economic and social impact on Singapore. 

So far, the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP), which does the assessment, has served notice on 100 companies, all of which have EP holders comprising more than half of their employees. 

Mr Lim, who was speaking during his ministry’s Committee of Supply debate, said: “The majority of companies in the same industry have a healthy Singaporean core. But there are outliers, significantly weaker than industry norms.” 

Calling firms that do not meet all three criteria “triple weak”, Mr Lim said such firms that do not make progress may eventually have their work pass privileges suspended. The processing of new EP applications and the renewal of existing passes could also be affected. Curtailing work pass privileges will have serious consequences on their continued operation and growth in Singapore, noted Mr Lim.

Mr Lim highlighted the slowdown in the growth of EPs given out: From 32,000 in 2011 to 9,000 last year. At the national level, foreigners take up about one in five jobs within the EP salary range, starting from S$3,300. 

“Yet, there is (a) perception among some Singaporeans: ‘Why am I the minority in my workplace?’” said Mr Lim. “I think the answer is because of what I call pockets of Employment Pass concentration in some companies, in some segments of industry and at some locations.”

The Republic is not “anti-foreigner”, but the behaviour of some companies add to “the deepening of the local-foreign divide in our Singapore workforce”. If left unchecked, these firms can end up weakening “unity and cohesion”, and hurt the country’s overall competitiveness, he said. 

A review on the 100 firms will be conducted in six months’ time. These companies, said Mr Lim, had displayed a weak commitment to recruiting and developing local professionals, managers, executives and technicians. But they have been largely cooperative with the authorities, with some even engaging external consultants to review their HR processes. 

At the opposite end of the spectrum, firms with a strong Singaporean core, a commitment to nurturing this core and strong economic linkage and social impact — “triple strong” — will be recognised by the Government. This is especially so for firms in sectors “critical” to future growth, such as advanced manufacturing. The Government will help such firms bring in foreign talent and transfer their expertise to locals, and nurture locals to be regional and global talents. 

Meanwhile, Minister of State (Manpower) Teo Ser Luck shared during the debate on Friday that the Lean Enterprise Development (LED) Scheme has received 79 applications since its launch in October last year.  

The two-year pilot allows small and medium enterprises (SMEs) more leeway in hiring and retaining foreign workers. The catch: The firms have to be committed to becoming more manpower-lean and building a core of Singaporean workers.

Thirty firms have been given the green light. Mr Teo highlighted the three features that good proposals had in common: Centralised with shared services or facilities, automation, and skills development for 
Singaporeans.