Explainer: How the Fair Consideration Framework protects Singaporean jobseekers

• The Fair Consideration Framework took effect in 2014
• It is meant to tackle firms that hire foreigners without fairly looking at Singaporean applicants
• It has since been expanded to include discriminatory hiring based on age, gender, race and mental health
• More than 1,200 firms have been placed on watchlist since 2016, but list is not made public
• Penalties were raised earlier this year; errant firms can be barred from work pass applications for longer periods

SINGAPORE — Recent cases of suspected unfair hiring practices unearthed by the Manpower Ministry (MOM) have cast a spotlight on the Fair Consideration Framework (FCF), a set of rules meant to ensure that firms consider Singaporeans for all job openings fairly.

The framework ensures that firms consider Singapore workers for job openings “based on merit”, rather than unfairly excluding them through discriminatory hiring practices.

On Wednesday (Aug 5), the Ministry of Manpower (MOM) placed 47 companies on the framework’s watchlist, which means that these firms will attract greater scrutiny from regulators when making work pass applications.

The cases include a wealth management firm that appointed foreigners of the same nationality to almost three-quarters of the job roles for professionals, managers, executives and technicians (PMETs), as well as a bank with nearly two-thirds of PMETs from the same country.

Altogether, the 47 blacklisted companies employed more than 2,800 PMETs and 2,000 employment pass holders, and 30 of them are in the financial services and professional services sector. Employment passes are issued to foreign professionals, managers and executives and they need to earn at least $3,900 a month and have acceptable qualifications.

MOM said that it is also investigating another 240 firms.

HOW DID THE FRAMEWORK COME ABOUT?

The framework was introduced in 2014, three years after the watershed 2011 General Elections, which saw a significant vote swing away from the ruling People’s Action Party.

Among other issues, Singaporeans had been anxious over the large influx of foreign workers due to a liberal immigration policy in preceding years, which had added to public transport crowding, a perceived dilution of the national identity as well as more competition for jobs on the domestic front.

The theme of providing opportunities for all Singaporeans became a major focus of the Government’s agenda, with the launch of a national conversation on the country’s future direction, called Our Singapore Conversation, in 2012.

In 2013, then Acting Manpower Minister Tan Chuan-Jin said that Our Singapore Conversation found “a recurring tension which was particularly pertinent”, with employers stating that they had difficulty finding suitably qualified Singaporeans to work for them.

He added that employees, on the other hand, gave feedback that they were either overlooked for job opportunities or unfairly displaced due to non-meritocratic hiring practices.

In a written response to questions from four Members of Parliament (MPs) on foreign hires, Mr Tan revealed that MOM had been exploring the need for a new fair consideration framework.

This framework would strike a balance between the need to shape hiring behaviour and offer assurances to Singaporeans, while not affecting the country’s competitiveness and negatively impacting businesses, which would hurt the job prospects of Singaporeans, Mr Tan said then.

The framework took effect from Aug 1, 2014.

WHAT ARE UNFAIR HIRING PRACTICES?

In general, hiring a foreigner over a Singaporean without considering the merits of the latter is considered discriminatory, regardless of whether the foreigner had been “pre-selected” by the employer to take up the role.

It is also not fair for employers to assume that a certain role is unlikely to be filled by a Singaporean, and therefore they should not seek to hire one — a mindset that the FCF aims to combat.

MOM places firms on the watchlist if they have an exceptionally high share of foreign PMETs compared to industry peers, or a high concentration of PMETs from a single nationality. Complaints of discriminatory human resource (HR) practices can also lead to a company being placed on the watchlist.

The ministry has never revealed the threshold of foreign hires that it deems unacceptable, or what other factors cause firms to end up on the watchlist.

Before applying for an employment pass to hire a foreigner, businesses must also advertise the job posting on the Government's job-matching portal www.MyCareersFuture.sg for at least 14 days, and must consider all applicants fairly before they can submit an application for the pass.

Job ads that prejudice hiring based on age, race, gender, religion, and mental health condition can also be considered as discriminatory practices.

There are some exemptions to the advertising requirement:

• Ads do not need to be placed for jobs meant to be filled by intra-corporate transferees — so long as they meet the stringent definition set out under free trade agreements to which Singapore is a party

• Companies with fewer than 10 employees are exempted

• Temporary job vacancies of less than a month, or those with a monthly fixed salary of S$20,000 or more, are exempt from this rule

“This (requirement) is to ensure fair hiring and guard against job openings being restricted to closed circles of friends,” Manpower Minister Josephine Teo said during the debate on her ministry’s budget in March.

WHY AREN’T COMPANIES ON THE WATCHLIST NAMED?

The FCF watchlist of companies is not made public, despite calls from some to reveal the names of these firms.

In a Facebook post on Wednesday, the National Trades Union Congress' assistant secretary-general Patrick Tay suggested publishing the names of errant companies on the watchlist, among other suggestions to “weed out” such practices.

The watchlist comprises firms suspected of having discriminatory hiring practices and are thus being scrutinised more, as well as recalcitrant firms that have been handed work pass debarments.

Since 2016, MOM has placed more than 1,200 employers on this list.

However, the ministry does periodically publish the names of firms found to have breached the rules, which led the authority to cut back on their work pass privileges.

In March, it named five such companies: Wisdomtree Learning Centre, Outshinerz Events, Security & Risk Solutions, Incredible Service Doc and Idoc Pte Ltd, for age-related discriminatory hiring.

The other firms placed on the watchlist will work with the Tripartite Alliance for Fair and Progressive Employment Practices (Tafep) to improve their HR practices and support hiring of resident workers.

Companies can be removed from the watchlist after demonstrating strong commitment to improve their hiring practices.

“Through Tafep’s intervention, most employers reviewed their hiring practices to give local jobseekers a fair chance,” MOM said on Wednesday.

The FCF measures have led to a net increase in resident employment by the firms that were placed on the watchlist.

The ministry said that 3,200 employment pass applications had been rejected, withheld or withdrawn since 2016, while the employers on the watchlist have hired more than 4,800 Singaporean PMETs.

Over the years in Parliament, MPs have asked if more can be done to penalise firms for being on the watchlist — ranging from excluding them from government procurement exercises or depriving them of government schemes until they are out of the watchlist.

Mrs Teo said in response to one such suggestion in 2018: “While these firms may be on the watchlist, and we are working with them to improve their hiring practices, in the meantime, they are still employers of Singaporeans, and we do not want to unfairly penalise their Singaporean employees while they are going through this process.”

DOES THE FRAMEWORK HAVE ANY TEETH?

Employers that are recalcitrant or uncooperative in improving their hiring practices face may have work pass privileges curtailed.

The five firms that were named by MOM have been barred from hiring foreigners and from renewing the work passes of existing foreign employees for a year, after the penalties were enhanced earlier this year to stamp out discriminatory practices.

MOM had raised the minimum work pass debarment period for all discrimination cases from six months to a year. This period can also last up to two years for more serious cases of hiring discrimination.

The scope of debarment, which previously included only new work pass applications, was also expanded to include renewals of work passes.

As the duration of most work passes is two to three years, this meant that between a third and half of the passes of a firm’s existing foreign workers cannot be renewed if they are given a year-long debarment.

Employers or key personnel who falsely declare that they had considered all candidates fairly could run afoul of the Employment of Foreign Manpower Act, which carries a maximum jail term of two years and a S$20,000 fine.

In March, Ti2 Logistics director Francis Chiang Tin Yui became the first person to be convicted for making a false declaration under the enhanced rules, after he was found to have pre-selected a foreign candidate for a general manager position in his logistics company.

His company did not review and consider any of the 22 Singapore candidates who had applied for the job through the jobs portal.

Chiang was fined S$18,000. MOM also debarred the firm for two years and revoked the work pass of the pre-selected candidate.

Under the new penalty framework, 23 employers have been sanctioned, Mrs Teo said.