GE issues – job security, the Fair Consideration Framework and its limited promises

singapore workersBy Reperio Simon

Jobs. This will be a hotly debated topic for this General Election. It is the one singular topic with many real concerns, ranging from security to opportunity, and Singaporeans have a right to question the policy performance of the ruling People’s Action Party and any proposals made by the opposition.

In terms of job security for Singaporeans, the single biggest move made by the government – at least in terms of making the loudest noise in the market of opinions – is the Fair Consideration Framework (FCF) in response to increasing concerns that foreigners are taking up jobs. The question most of us have is whether this works and whether it will work in the long term.

The FCF is part of the government’s overall effort to strengthen the Singaporean core in the workforce. It sets out clear expectations for companies to consider Singaporeans fairly for job opportunities. The FCF applies to all companies in Singapore. All companies must comply with the Tripartite Guidelines on Fair Employment Practices (TAFEP) and have fair employment practices that are open, merit-based and non-discriminatory.

TAFEP is basically a set of five Fair Employment Practices, which covers the recruitment process, employee treatment at work, training and development, fair rewards and adherence to labour laws.

The main directive within the FCF is that employers must advertise the job vacancies on the Jobs Bank administered by the Singapore Workforce Development Agency (WDA) before submitting Employment Pass (EP) applications. The requirements for the advertisement:

  • Be open to Singaporeans.
  • Comply with the Tripartite Guidelines on Fair Employment Practices.
  • Run for at least 14 calendar days before you apply for the EP.

Employers are exempted from the Jobs Bank advertising requirement in any of these cases:

  • Your company has 25 or fewer employees.
  • The job position is paying a fixed monthly salary of $12,000 and above.
  • The job is to be filled by an intra-corporate transferee (ICTs). Under the World Trade Organisation’s General Agreement on Trade in Services (WTO GATS), ICTs refer to those holding senior positions in the organisation or have an advanced level of expertise.
  • The job is necessary for short-term contingencies (i.e. period of employment in Singapore for not more than one month).
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What immediately hits us in the face is that it is technically possible to bypass the FCF if you hire up 20 foreigners and 5 Singaporeans, assuming that there are no foreigner quotas in your industry. It is also important to ask how many companies in Singapore fit the following exemption criteria, bearing in mind that 99% of our companies are SMEs, employ 70% of our workforce and contribute 50% of our GDP.

It is also important to note that TAFEP and FCF are NOT enshrined in Singapore’s Employment Act (Chapter 91). This means that it is a guideline, enforced by the Ministry of Manpower (MOM). This is uniquely Singapore because discrimination in recruitment and workplaces are enshrined in law in other countries.

For instance, the Finnish Employment Act specifically prohibits discrimination against employees on the basis of age, health, disability, national or ethnic origin, nationality, sexual orientation, language, religion, opinion, belief, family ties, trade union activity, political activity or any other comparable circumstance. This applies equally to fixed-term and part-time employment relationships.

Similarly in Australia, the Australian Employment Act prohibits discrimination against employees based on their age, race, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

In both Finland and Australia, it is illegal to treat hired employees differently and subject them to different terms or types of employment based on discrimination. As a developed country, even with the FCF, Singapore is still a long way away from global norms.

Manpower Minister Tan Chuan-Jin
Former Manpower Minister Tan Chuan-Jin, who oversaw the launch of the Fair Consideration Framework.

When enshrined in law, there are real substantial penalties for breaches and recourse for victims, as outlined in both the Finnish and Australian Employment Acts. In Singapore’s case, it is entirely within the jurisdiction of MOM, in terms of penalties and recourse for victims of discrimination. The big question is why discrimination, while addressed in our constitution, is not addressed in our Employment Act. Does the citizenship factor simply vanish in matters of employment? Why?

The other issue is policing the guidelines. Since MOM is the agency now saddled with this matter, how much resources does MOM have in addressing breaches? What recourse, particularly legal ones, does a Singaporean have when discrimination actually occurs? None to date.

From the business perspective, only 5% (4,000 out of 77,000) of registered businesses in Singapore have signed the TAFEP pledge. It is a dismal sign up rate. The reason might be that either the registered businesses have something better in their employment standards, or see no incentive in signing up, despite all the carrots given. Temasek Holdings and GIC are conspicuously missing from the list as well.

There are several assumptions that FCF and TAFEP are founded on:

  • Meritocracy is practised.
  • Effort is rewarded with promotion and other benefits fairly.
  • A level playing field where everyone is given equal opportunity to advance and upgrade to their full potential.
  • All employers will abide by labour laws and adopt the Tripartite Guidelines on Fair Employment Practices.

When contrasted with The Economist’s crony-capitalism index, one begins to wonder if these assumptions will hold. If they don’t hold water, then the relevance and efficacy of FCF and TAFEP becomes questionable.

Granted, we are not able to see if FCF has indeed been successful at keeping jobs for Singaporeans, or if the curbs on Employment Passes is doing a better job. But the FCF in itself is clearly not the best answer for the issue of job security.

jobs bank
Launch of the Jobs Bank (image – Mediacorp)

On the other hand, opposition parties are a lot less dependent on prevention, but opt to address the root of the issue – systems that encourage unfair employment. With its economic policy paper launched in February 2015, the Singapore Democratic Party has proposed a retrenchment insurance scheme, RESTART, that was meant to cushion workers who have lost their jobs. SDP also proposed to encourage entrepreneurship, reduce reliance on multi-national corporations and vest Singaporeans at the centre of the nation’s economic policy.

The Democratic Progressive Party has also earlier published a series of discussion papers to propose putting “the person at the heart of an increasingly high-tech society and economy, and how we can use new tools and opportunities to help everyone”. DPP proposes to reform the “job pyramid” such that Singaporeans are just as capable and willing to take up current low-skilled, low paying jobs that are effectively being use to trickle profit upwards in corporations.

Admittedly, these alternative proposals are still in their developmental stages, but compared to what the current government has done with the FCF, which lends itself to such tremendous loopholes that it would be folly to depend on it as any form of protection against employment discrimination, these alternatives might be worth considering and refining.

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August 2015