NSP's response to the new 'Fair Consideration Framework'

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Singapore

26 September 2013

The National Solidarity Party welcomes the Ministry of Manpower’s announcement on 23 September 2013 on the new Fair Consideration Framework (FCF) which requires employers to consider Singaporeans fairly before hiring Employment Pass (EP) holders. For some time, opposition parties and concerned citizens have urged the Government to review its policies relating to the employment of non-Singaporeans.

In our 2011 General Elections Manifesto, we had specifically called on the Government to grant priority to Singaporeans in employment.  We are glad that the Government has heeded the call to level the playing field between Singaporeans and foreigners for job opportunities and has moved to improve employment opportunities for Singaporeans.

Coming into force in August 2014, the FCF will only apply to the hiring of EP holders.  The Ministry has justified this by saying that levies and dependency ratio ceilings will spur firms to search for suitable Singaporeans before applying for an S-pass or Work Permit (WP).  The employer who hires a Singaporean at a salary of $2,200 (qualifying salary for S-Pass applicants) will have to pay about $350 as the employer’s portion of CPF contribution for hiring that Singaporean worker, but the employer has only to pay $300 levy for hiring a foreigner for the same job, as long as the employer remains within the quota. Even if this levy will be increased to $330 in the year 2015, there is little incentive for the employers to hire Singaporeans because with the foreign worker, the employer may not have to grapple with manpower issues like staff turnover, yearly increments and increased costs related to staff benefits like 4-months maternity leave, reservist call-ups (NS ICT call up), etc.

NSP reiterates that the single largest factor that prevented the wages of the citizen workforce from rising is the large supply of foreign workers who are willing to accept lower pay, as it is very convenient for employers to have foreign workers who may not demand better wages, or take up other jobs. This undermines the natural economic forces in local job-market by artificially filling low-paid, low-skill positions and removing the impetus for higher wage demands.

In addition to the reasons above, the number of S-Pass holders (i.e. mid tie Professionals, Managers, Executives and Technicians) has increased by over 35 per cent since December 2011, from 113,900 S-Pass holders in December 2011 to 154,100 in June 2013, hence it is important to extend the FCF to other work pass schemes besides the EP.

We are pleased to note the Ministry’s assurance that it will monitor the hiring of S-Pass and WP holders closely, and consider extending the advertisement requirement to those jobs in future if necessary.

The President
For and on behalf of the 15th CEC of the National Solidarity Party