As former labour chief Lim Swee Say steps up to his new role as Manpower Minister on 4 April 2015, what are the anticipated changes in labour policy?

Bringing over the wealth and depth of experience from his previous portfolio as labour chief, new Manpower Minister Lim Swee Say plans to use his influence to encourage the labour movement and business community to collaborate collectively. In particular, Minister Lim has been an active advocate of tripartism, which he believes has been one of Singapore’s key achievements in managing industrial relations. However, how tripartism is implemented; and whether it will result in a “journey towards a healthier economy, a more progressive society and a better Singapore for all” for employers and employees, remains to be seen.

What is Tripartism?

In response to public outcry against the perceived notion that foreigners are being favoured over locals for job opportunities, the Singapore government has begun advocating tripartism, to develop the local population into a globally competitive workforce, boost Singapore’s economic competitiveness and promote harmonious labour-management relations.

In Singapore, tripartism has been promoted through several key efforts, namely:

  • Job re-creation
  • Raising the effective retirement age
  • Training and upgrading the workforce
  • Fair and progressive employment practices
  • A flexible wage system

TripartismThe Ministry of Manpower (“MOM”), in conjunction with the National Trades Union Congress (“NTUC”) and the Singapore National Employers Federation (“SNEF”) have been working closely together on the tripartism movement. For example, MOM has been pushing employers to embrace flexible working arrangements (“FWAs”) and give greater consideration towards hiring contract staff or freelancers to boost their manpower, through funding and incentives. One example is the Work-Life Grant, which is provided for companies that offer FWAs for their employees.

By doing so, locals and foreigners alike can look forward to a greater variety of working arrangements to suit their needs. For example, Singaporean housewives, retirees and spouses of Employment Pass (“EP”) holders, Permanent Residents and Singapore Citizens who are holding a Letter of Consent (“LOC”) may be able to benefit from flexible working arrangements.

Perhaps the most evident result of Manpower Minister Lim Swee Say’s influence is the birth of a new international conference held in Singapore to discuss tripartism, which is scheduled to take place in October this year.  This conference, which will host union leaders from the region, will showcase Singapore’s approach to tripartism, as well as create an opportunity for Singapore to learn from other models in other countries.

What about Foreign Talent?

As part of the tripartism movement, MOM has also introduced the Fair Consideration Framework (“FCF”), which took effect from 1 August 2014. Under the FCF, employers were required to advertise job vacancies on the electronic Jobs Bank portal for 14 calendar days, before submitting an application for an Employment Pass (“EP”). This highlighted the government’s focus and push for employers to prioritise hiring locals first amidst globalisation, which has skewed the bargaining power in favour of businesses as advances in technology have opened up a global labour market. However, employers in unique industries would still have the freedom to tap on the specific skills that foreign talent may have, that locals are lacking in.

Indeed, newly appointed labour chief Chan Chun Sing commented that with the fast-paced advances in technology, new industries were “mushrooming and creating jobs, (but) require new and higher-level skills which are not produced quickly enough”. Hence, while employers may have to anticipate a longer waiting time in the event that they are seeking to hire someone with specific skills unlikely to be found in the local market, they can be assured that the door is not closed to foreign talent.

Moreover, companies that fulfil any of the following requirements will be exempt from the Jobs Bank requirement:

  • Company has 25 or fewer employees
  • Job position will pay a fixed monthly salary of S$12,000 and above
  • Job will be filled by an intra-corporate transferee, i.e. employees that hold a senior position in the organisation or have an advanced level of expertise
  • For a short-term contingency <1 month

labour-market-singaporeWith these exemptions, employers can be reassured that the MOM’s implementation of the policy has been carefully thought out so as not to overly impact a company’s business operations, particularly since the Singapore government still prizes its position as the top country in the world to do business. However, employers should still note that appropriate measures should be put in place to ensure that its human resource department does not practice any discriminatory practices, as MOM is stepping up its scrutiny of companies and their hiring practices. Examples of areas of scrutiny would be:

  • Requesting for a company’s organisation charts with the nationality of its employees
  • A company’s recruitment processes
  • A company’s staff grievance handling procedures
  • Framework for staff progression
  • Evidence of plans to develop local internal staff to take on higher roles, or to reduce reliance on EP holders.

Evidently then, employers cannot remain complacent even if their applications for EPs get approved and should not think it sufficient to hire local staff to perform basic administrative duties only. Rather, employers should recognise that it is essential to contribute towards the upgrading of the skills of its local employees; while providing them with opportunities for career progression.

Enhanced Checks on qualifications of S Pass and EPs applicants

In response to Non-Constituency MP Gerald Giam’s query on how MOM conducted its review of S Passes and EPs, Minister Lim highlighted that MOM’s review process was targeted at sieving out applicants who had submitted fake or sub-standard qualifications. This review process was in the interest of the employer and the labour market as a whole, as it would ensure that foreign talent were not misrepresenting their qualifications to the employer and in the process, putting locals at a disadvantage. Nevertheless, employers should not leave the review of academic qualifications solely to MOM and should still bear the “primary responsibility” of verifying the authenticity and quality of the academic qualifications of the candidate.

Certificates

Indeed, the prevalence of “degree mills” throughout the world has resulted in several high profile scandals. In April 2015, the Infocomm Development Authority of Singapore (“IDA”), a statutory board that oversees the development of information technology and telecommunications in Singapore, was brought under scrutiny for hiring an employee who had allegedly obtained her master’s degree from a “degree mill”, which has since been closed in the United States by a court order.

With these changes and more stringent regulations in place, how should employers protect their own companies against applicants who may be holding shoddy qualifications? Minister Lim shared several methods through which MOM conducts its review process, which employers should consider:

  • Database checks
  • Direct verifications with the issuing institutions
  • External checks with third-party screening agencies

Notably, the employer will have to declare, as part of the submission process, that the academic qualifications have been verified. Given that each submission comes with an administrative fee, employers or their employment agencies can save costs by ensuring that the relevant verification procedures have been carried out.

More importantly, those found to have submitted forged documents or false particulars may be subject to a fine of up to S$20,000 and/or imprisoned for up to two years. With such heavy penalties, companies are incentivised to ensure that proper hiring practices and procedures are in place.

Moving forward in a Tripartite Labour Market

labour-marketUltimately, employers and workers will have to accept trade-offs and benefits as the Singapore labour market progresses towards tripartism. For companies, the tightened procedures on academic qualifications and skill sets will encourage them to opt for higher quality human capital, while the requirement for career progression and training for its local employees through initiatives such as SkillsFuture, will ensure that companies transfer knowledge and skills to Singapore labour force.

On the other hand, workers will benefit from the government’s push for companies to embrace more varied working arrangements, as those who prioritise a work-life balance will be able to find opportunities that suit their needs. However, workers may in turn need to accept that part-time and contract positions may not offer the same level of benefits that permanent staff will enjoy.

Nevertheless, companies and employees should recognise that a relationship of mutual trust and consensus with the government bodies as the labour market moves towards adopting tripartite practices is generally beneficial and will contribute towards the sustainability, competitiveness and growth of Singapore’s economy.

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