New regulations for firms seeking to hire EP holders

SINGAPORE — Jittery employers were relieved yesterday after hearing about the Government’s plans to make them consider Singaporeans for vacancies.

On edge about the possibility of an onerous regime that will make hiring skilled foreigners even harder — following several waves of policy changes in recent years to curb imported labour, including steeper levies — businesses learnt that they have to first advertise job openings for 14 days on a new, free portal run by the Singapore Workforce Development Agency before they can turn to Employment Pass (EP) holders.

The “fair consideration framework”, announced by the Ministry of Manpower (MOM), follows rising numbers of complaints about nationality-based discrimination in hiring, which many frequently accuse the banking, services and IT sectors of.

The advertising rule will apply from August next year for companies with more than 25 workers and which are seeking foreign professionals, managers and executives (PMEs) for jobs paying up to S$12,000.

Among Singaporeans, 95 per cent are within this salary range.

Firms that attempt to “go through the motions”, as Acting Manpower Minister Tan Chuan-Jin put it, could face additional scrutiny and be made to show the MOM their organisation charts that detail the nationalities of workers, outline how they recruit, handle grievances and plan progression, as well as craft plans to develop Singaporean staff to take on bigger roles or reduce reliance on EP holders.

Errant firms may be hit with further requirements, such as declaring they will not let go of Singaporeans in a job they are applying or renewing EPs for 60 days prior and after. They should also “expect greater scrutiny and a longer review period for their EP applications”, or may have their work pass privileges curtailed, said the MOM.

It will also raise the qualifying pay for new EP applications for fresh graduates by S$300 to S$3,300 from January — the third hike since 2011.

Although there were fears that laws would be put in place to compel firms to give priority to locals, Mr Tan reiterated why it chose to “nudge” employers instead.

“Fair consideration is fundamentally about attitudes and mindsets,” he said. “It is neither possible to change mindsets overnight nor legislate the problem away ... It requires persuasion, explanation and leading by example,” said Mr Tan.

Business federations agreed with what they described as a “light touch” approach, saying that the rule will serve as a reminder to employers to give Singaporeans a chance.

Association of Small and Medium Enterprises President Chan Chong Beng said: “Naturally, there were concerns that there would be new laws or harsh measures ... but I think this new rule is a fair move that doesn’t make it too difficult for companies.”

Mr Tan also stressed that the new rule was not about getting employers to “hire Singaporeans first, or hire Singaporeans only”, noting that firms that are unable to find “suitable” Singaporeans can still bring in those with the skills needed from overseas.

Reiterating that the Republic has and will remain open to imported skills and talent, Mr Tan pointed out that the rule is only about helping Singaporeans get a “fair opportunity” and is not a “silver bullet”. “Singaporeans must still prove themselves able and competitive to take on the higher jobs that they aspire to,” he said.

While the “jury is out”, in the words of the Singapore International Chamber of Commerce’s Jonathan Asherson, on whether firms will indeed follow the spirit of the law, CIMB economist Song Seng Wun said he did not think Singapore’s competitiveness, as a place to work or set up shop, would be dented by the move.

“If you look at the figures, more are coming in than are leaving, even though costs are not low here,” he said. “As long as Singapore continues to be seen as a favourable place to live, work and play, it will not be an issue.”

Before the advertising rules kick in, the MOM will, from the first quarter of next year, also look for firms that warrant “additional scrutiny” because they either have a disproportionately low proportion of Singaporeans at the PME level compared to their industry’s benchmark or have repeatedly faced complaints about discriminatory human resource practices.

Writing on the MOM blog, Mr Tan said: “This is something ... we will be actively monitoring to add teeth to the advertising requirement, since we are realistic that some recalcitrant firms may try to ‘go through the motions’.”

The ministry had, together with employer and worker union representatives, studied models in other countries, such as the United States, Canada, the United Kingdom, Sweden, Germany and Hong Kong. “Many months of intense and wide-ranging consultations with various stakeholders” also went into coming up with the framework, Mr Tan said.

He noted that the new advertising requirement also serves “a larger purpose of facilitating greater labour market transparency”. Having a central pool of job vacancies will help the Government to “discern existing skill gaps and also better facilitate job-matching”, he added.