Manpower Ministry to review companies whose 'Singaporean core has been weakening': Josephine Teo
SINGAPORE: The Ministry of Manpower (MOM) intends to review the hiring practices of companies whose "Singaporean core has been weakening", as well as those whose Employment Pass (EP) and S Pass workforce are "overly concentrated" from a single foreign nationality source, said Manpower Minister Josephine Teo.
The move comes amid a heightened sense of insecurity about jobs, in an economy battered by the COVID-19 pandemic.
Announcing the move in Parliament on Tuesday (Sep 1), Mrs Teo said MOM will work with other agencies to actively intervene and help such companies reshape their workforce profiles.
The ministry will also engage the human resources community to “do more”, she added.
READ: Minimum qualifying salary to rise by S$600 for Employment Passes and S$100 for S Passes, higher requirement for financial services
Mrs Teo was responding to several Members of Parliament (MPs), who had posed the issue of job competition between Singaporeans and work pass holders.
She pointed out that work pass policies have been regularly adjusted, slowing down the growth of Employment Pass and S Pass holders.
Between 2014 and 2019, the number of Employment Pass and S Pass holders grew on average by fewer than 9,000 annually, compared with the average annual growth of 30,400 in between 2009 and 2014.
In comparison, the number of locals in professionals, managers, executives and technicians (PMETs) jobs rose by an average of about 35,000 annually between 2014 and 2019, said Mrs Teo.
With COVID-19, the number of Employment Pass and S Pass holders have also come down sharply, she said, adding that this group of workers dropped by 22,000 between January and July this year.
Singapore's overall unemployment rate has risen to its highest level in more than a decade, with retrenchments more than doubling because of the COVID-19 pandemic.
In the second quarter, retrenchments more than doubled to 6,700, from 3,220 in the previous quarter.
Mrs Teo said that MOM actively monitors retrenchment exercises, and that the vast majority have so far been conducted fairly and responsibly.
"By and large, there has also not been a weakening of the Singaporean core," she said.
Notwithstanding these "reassuring observations", said Mrs Teo, MOM will work with businesses and unions to “advance sound practices” - such as by updating the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment, or through the Fair Retrenchment Framework proposed by the National Trades Union Congress (NTUC).
READ: MPs call for firms to be more transparent on foreign hiring, make push to prioritise Singaporeans
FAIR TREATMENT FOR LOCAL JOB SEEKERS
The ministry will also intensify other efforts to ensure fair treatment of locals applying for jobs, Mrs Teo said.
For example, in evaluating Employment Pass and S Pass applications, MOM will place additional emphasis on whether a business has kept up its support of local PMETs in its employment.
“Among other things, an employer’s record in how it handles retrenchment exercises will certainly have a bearing,” she said.
“For example, is an EP or S Pass applicant a replacement for a local who was only recently retrenched? If so, MOM will ask why and turn down the application unless there are very good reasons.”
MOM will also look at whether businesses have been responsive to government efforts to help them recruit and train local PMETs, she said.
“Therefore, in specific areas of skills shortages and where there is strong interest from locals, we will also assess if agencies like WSG (Workforce Singapore), MAS (Monetary Authority of Singapore) and IMDA (Infocomm Media Development Authority) have been able to get an employer on board their many programmes to strengthen the development of local PMETs,” said Mrs Teo.
This will have a bearing on their Employment Pass and S Pass applications, she added.
READ: Union leader urges tougher measures to tackle hiring bias, including EP quotas and ending tax breaks
MOM will also consider whether an employer has discriminated against qualified local PMETs, she noted.
“Of all possible infringements, this is what offends Singaporeans most - that they have the qualifications but lost out to a foreign candidate who did not appear to be better,” she said.
MOM regularly takes companies to task for practices such as pre-selecting a foreign candidate and disregarding qualified local candidates, Mrs Teo said.
She noted that this year alone, 90 employers have had their work pass privileges suspended because of infringements under the Fair Consideration Framework.
Mrs Teo gave the example of a multinational company in the healthcare sector that did not shortlist or interview any of the 26 local candidates who had applied for a position advertised on MyCareersFuture.gov.sg.
“This company was clearly not serious in considering local applicants. As a penalty, it will not be able to hire or renew EP holders for 12 months,” she said. “To stay in business, they will have to recruit more locals, something they should have done all along.”
READ: Foreigners keep Singapore ‘economically relevant’, but pay attention to the Singapore worker: Pritam Singh
Mrs Teo noted that since 2016, more than 1,200 employers have been scrutinised under the Fair Consideration Framework (FCF), which requires firms to assess Singaporeans fairly for all job openings.
While these firms did not flout any rules, they were singled out for their “unusually high reliance” on foreigners in their PMET headcount, compared to others in the same industry.
“Until they improve, we will reject or hold back their work pass applications,” she said. “At the same time, TAFEP engages them to understand their problems and help them strengthen their hiring practices.”
“In all, 3,200 EP applications have been rejected or withheld by MOM, or withdrawn by employers while they were being scrutinised,” said Mrs Teo.
“But these employers have hired more than 4,800 Singaporean PMETs as a result,” she noted.
“In other words, this targeted approach has helped to keep and expand local PMET employment in these firms.”
NTUC assistant secretary-general Patrick Tay, who is the MP for Pioneer SMC, had last month called for such errant companies to be named, so as to deter unfair hiring practices.
However, Mrs Teo said on Tuesday that a “name-and-shame” approach would be counterproductive and frustrate the companies' efforts to expand local hiring.
“Our alternative approach of scrutinising and engaging employers is highly resource-intensive but in fact, a more effective way to get businesses to reshape their HR practices.”
Several MPs sought clarification from Mrs Teo on her speech.
Sengkang GRC MP Jamus Lim asked if slowing down the rate of new EP and S Pass holders was sufficient to ensure that local PMETs do not get displaced.
The Workers' Party (WP) MP suggested that many PMET positions may already have been secured by foreign talent, and that it is "no surprise that the number that is now required actually goes down".
"I merely stated the facts. I did not say that one contributed to the other," said Mrs Teo.
She added that MOM is always looking at the best way of helping Singaporeans stay in employment, stay out of unemployment and over time, to achieve income growth and retirement adequacy.
Aljunied GRC MP Leon Perera asked what actions could be taken against employers who were found to discriminate against job seekers. He said anti-discrimination legislation "could provide a solution" to such an issue.
Curtailing work pass privileges could help address such cases of discriminatory hiring, Mrs Teo said, noting that "not so many businesses" are able to operate with a 100 per cent local workforce.
She questioned if countries with anti-discrimination laws have better employment outcomes.
“Look at women’s participation in Singapore. It’s not as high as we would like it to be, but it’s far higher than in some jurisdictions that claim to have gender discrimination laws,” she said.
"So look at the substance of it, I think the results are encouraging we are not giving up trying to push the agenda more, we are concerned about it during this time whether the women, whether the seniors, they will be well taken care of."
But she said the answer to discriminatory hiring "cannot be" for Parliament to pass another law and expect it will be done.
"I think that is not a very realistic approach," Mrs Teo said.
NEW PROGRESSIVE WAGE MODEL MARK
While Singapore has not legislated a single minimum wage across the board, features of a “minimum wage plus” have been implemented through a Progressive Wage Model, said Mrs Teo, noting that the model currently benefits about 80,000 workers in the cleaning, security, and landscaping sectors.
Workers in Progressive Wage Model sectors have seen cumulative wage growth of around 30 per cent compared in the last five years, she noted.
However - with businesses still trying to find firmer footing and great uncertainty in the labour market - any attempt to expand the Progressive Wage Model into new sectors “carries higher risk”, Mrs Teo said.
“While it may be too risky to mandate PWM in more sectors right away, we can still promote its voluntary adoption by progressive employers that are able to do so,” she said, adding the Government would work with its tripartite partners to introduce a new Progressive Wage Model Mark.
This Progressive Wage Model Mark would recognise companies that voluntarily pay progressive wages and provide job progression pathways to their lower-income workers, she said, noting that sectors such as food services and retail trade had the potential to come on board.
“For the PWM Mark to work, there must however, be a broader movement involving society at large. As consumers, we must be prepared to pay slightly more, and intentionally support such progressive companies by purchasing their products or services,” said Mrs Teo.
“This will spur more companies to be progressive and adopt the PWM Mark, which in turn will benefit our lower-income workers.”
“I hope MPs will agree with me, that we must have it in our hearts to consider this a small price to pay for better jobs and income security for those among us who need it most.”
Tearing as she concluded her speech, Mrs Teo said that just as workers care for their families and loved ones, the manpower ministry also has the best interests of workers in mind.
"Please know that you too are always in our hearts. However long this storm lasts, MOM will walk the journey together with you. However tough it may be, we will help you bounce back," she said.
"Our mission is to help each 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," she said.
"Our work is not yet done. We have taken firm steps forward, and we will press on whatever the challenges - with you, for you, for Singapore."