There has been much discussion about the presence of foreigners in Singapore's workforce, and with many expressing concerns that they impact the employment of Singapore's PMET population.
In her speech at the Debate on the President's Address in Parliament on Tuesday (Sep. 1), Minister for Manpower Josephine Teo spoke in-depth about Singapore's work pass policies, how the ministry monitors companies' employment and retrenchment practices, and how employers need to do their part in hiring local PMETs.
Government has adjusted work pass policies
Teo said that the government has regularly adjusted its policies for work passes over the years, which have slowed down the growth in the number of Employment Pass (EP) and S Pass holders.
In the five years between 2014 and 2019, said Teo, the number of EP and S Pass holders has grown by less than 9,000 annually, on average. By comparison, the average annual growth in the five years prior — between 2009 and 2014 — was 30,400, more than three times the current average.
Meanwhile, amongst the local workforce, the number of locals working in PMET jobs has grown by an average of 35,000 annually over the last five years.
Teo also rebutted the argument that the growth in number of locals in PMET jobs is due to an increase in PRs, noting that the population of PRs over this five-year period has remained stable, around 500,000.
With COVID-19, the number of EP and S Pass holders have come down sharply. Between January and July this year, it dropped by 22,000.
In response to suggestions for the government to use levies and quotas to regulate the number of EP holders, Teo shared the government's reasoning for not doing so.
She compared raising the salary requirements for EP holders over time to a high jump, such that when the government raises the bar, the hurdle is higher for EP holders, which requires them to have more skills and talent to cross the higher bar, which improves the quality over time.
This also means that EP holders on the lower end — or those who are unable to cross the raised hurdle — get pushed down to the S Pass-level, where there are quota controls. In all of the past adjustments to EP salary requirements, said Teo, a "good number" have been downgraded to S Passes.
"To similarly impose quotas at the higher end of EP holders is not unthinkable," said Teo. "But it is probably unwise."
She said that this is because, without the flexibility of using salary requirements rather than quotas, many top-quality investments and job opportunities would be lost to Singapore's competitors, as "there's no shortage of takers ready to eat our lunch."
MOM takes into account how employer support local PMETs
Teo also added that employers' records need to show that they have kept up their support of local PMETs in their employment.
MOM holds employers accountable by monitoring how employers handle retrenchment exercises. For example, Teo said, if an EP or S Pass applicant were a replacement for a recently-retrenched local, the ministry would question why and reject the application unless there were "very good reasons".
MOM also takes into consideration whether an employer has discriminated against qualified local PMETs, by regularly taking employers to task for practices like pre-selecting a foreign candidate and disregarding qualified local candidates.
In 2020 alone, Teo said, MOM has suspended the work pass privileges of 90 employers because of infringements under the Fair Consideration Framework (FCF).
One company that she raised as an example was "clearly not serious in considering local applicants", as it did not shortlist or interview any of the seven local candidates who met the job requirements. Instead, two were deemed "over-qualified" while the other five were rejected for not meeting requirements that were not stated in the job advertisement in the first place.
As a result, the company will not be able to hire or renew EP holders for 12 months, and will instead need to recruit more locals, which is "something they should have done all along", said Teo.
She added:
"We agree with Ms. Foo [Mee Har] if, in fact, there are equally or better-qualified local candidates, it will be only logical that they be given priority consideration.
This is one of the reasons why the company is in Singapore in the first place."
More than 1,200 employers scrutinised under FCF since 2016
In Aug. of this year, MOM stated that it had taken action against 47 employers whose workforce profiles indicated that they may have discriminatory hiring practices, by placing them on the FCF Watchlist.
Since 2016, more than 1,200 employers have been scrutinised under the FCF, said Teo. These companies have not flouted any rules, but have been identified by MOM because of their "unusually high reliance" on foreigners in their PMET workforce.
Until these companies "improve", Teo said that MOM will continue to reject or hold back their work pass applications. In all, 3,200 EP applications have been rejected or withheld by MOM, or withdrawn by employers while they were being scrutinised.
As a result, the employers have hired more than 4,800 Singaporean PMETs instead, said Teo.
She added that the "targeted approach" of "scrutinising and engaging employers" has helped to keep and expand local PMET employment in these companies, because it is a more effective way to get businesses to reshape their HR practices, even though it requires more resources from MOM.
If MOM had instead "vilified" the companies through a name-and-shame approach, Teo stated, it would be "ultimately counterproductive" and "not advantageous to us" in Singapore, as the company could easily take its business and opportunities elsewhere.
MOM monitors retrenchment practices
Teo said that MOM actively monitors retrenchment practices, and asks these 10 "key questions":
- Did the employer implement any other alternatives, such as cost-saving measures before considering retrenchment?
- Were efforts made to re-skill and re-deploy staff, before embarking on the retrenchment exercise?
- Does the business situation warrant a retrenchment?
- Did the employers put in place clear criteria to identify workers to be retrenched?
- Did these criteria discriminate against any employee on the basis of age, gender, ethnicity, or family circumstances?
- Did the company provide retrenchment benefit commensurate with its financial position?
- In a unionised company, were the selection criteria and retrenchment benefits discussed and agreed to with the union?
- Did the company put in place measures to support the workers’ transition — for example, engaging WSG or e2i for job assistance?
- Did the company communicate its business situation and plans clearly, sensitively, and with adequate notice to affected employees?
- Was the company’s Singaporean core weakened as a result of the retrenchment exercise?
The majority of retrenchment exercises have been conducted "fairly and responsibly", said Teo. She stated that, in the instances where older Singaporeans have been let go, it has mostly been because of criteria such as the relevance of their skill sets to core functions.
Answering question 10, Teo said that there has overall not been a weakening of the Singaporean core. Giving the example of the Resorts World Sentosa retrenchments, Teo said that a foreign employee would need to meet a higher performance bar than a local employee in order to be retained.
Still, Teo said, MOM will continue to be vigilant and work with tripartite partners to advance sound retrenchment practices, such as by updating the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment, or taking into account the Fair Retrenchment Framework proposed by NTUC.
Employers must also step up and play a part
Teo emphasised the part that employers must play in fair hiring practices:
"No amount of rules will be enough if employers do not have the shared sense of commitment to fair hiring and responsible retrenchment.
[...]
The Government cannot do this alone. We need employers to do your part: be fair to locals when you hire or when you have to retrench."
She said that unfair hiring practices not only result in a lost job opportunity for a local worker, but also the loss of "trust that the system is fair, that the odds were not stacked against people who are trying".
Teo revisited the support available to companies to continue to retain and hire locals, such as the S$1 billion Jobs Growth Initiative, to help support new local hires in growing sectors.
She highlighted Professional Conversion Programmes, which help provide employers with training and salary support to re-skill and hire mid-career local jobseekers.
Teo also mentioned another way of supporting PMETs, through attachments and skills training opportunities for mid-career individuals, which will help make their CVs "more polished" for once the economy recovers.
She closed her speech speaking tearfully about the manpower ministry's dedication to Singaporeans:
"However long this storm lasts, MOM will walk the journey with you. However tough it may be, we will help you bounce back.
Our mission is to help each and every one of you emerge stronger, by never giving up hope and by working with employers in Singapore to treat you fairly, to make your hard work bear fruit."
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Top photo via YouTube / CNA.