Fair Consideration Framework: Impacts on Singapore EP Applications

August 2020

The Lanturn Team

Observe any building in the CBD for a day, and you’ll see talented professionals of every nation and colour. This vibrancy is possible because Singapore’s government has balanced competitiveness and locals’ interests through the Fair Consideration Framework (FCF). But this balancing act has certain effects on the Employment Pass (EP) application process. We’ll dig deeper for you in this blog post.

What is the Fair Consideration Framework?

The Singaporean government runs numerous initiatives and organisations designed to encourage both diversity and fairness in its workforce. One of these initiatives is the FCF, or Fair Consideration Framework—a set of guidelines that firms must follow when filling professional, managerial, executive, and technical (PMET) roles.

The FCF was last revised in 2020, but the ever-changing hiring landscape means that the Singapore Government could introduce further updates in the future.

The FCF plays a vital role in the employment pass process. If you’re planning to make international hires, you should get acquainted with the FCF’s rules and clauses. Additionally, you should be familiar with the government agencies in charge of enforcing it.

Support for Singapore’s workforce

The FCF is managed by the Ministry of Manpower (MOM) and enforced by the Tripartite Alliance Limited (TAL).

MOM is in charge of all things labour-related in Singapore. This includes creating new legislation for employment practices, managing work passes, outlining workplace safety and health standards, and more.

TAL is a collaboration between MOM, National Trades Union Congress (NTUC), and Singapore National Employers Federation (SNEF). It serves as a mediator and advocate for fair, non-discriminatory work practices.

Prior to the FCF’s implementation, many Singaporeans felt that companies were giving good-paying PMET jobs to foreigners without first considering locals for these positions. In response to these fears and concerns, MOM announced the FCF in 2013 and implemented it the following year.

What changes did the FCF bring?

The introduction of the FCF resulted in two major changes: the creation of a national jobs advertising platform (currently known as MyCareersFuture), and new jobs listing requirements that affected Work Pass applications.

Jobs Bank

MyCareersFuture is a free public platform and jobs-listing site for local employees and employers. It was created after the FCF came into force.

Based on the candidates’ current skills and competencies, the portal matches locals to relevant jobs. It also highlights jobs that are eligible for Government support through WSG’s Adapt and Grow Initiative.

MyCareersFuture also features a Careers Toolkit section, which provides career insights and guidance in the form of written content.

Jobs listing requirements

The FCF made it mandatory for certain businesses to list PMET jobs on the Jobs Bank so that talented locals would have a chance to apply for these roles.

Currently, it is mandatory for Employers to list their positions on MyCareersFuture and consider local candidates, unless the Company and/or roles meets any of the below requirements.

The company has fewer than 10 employees.
The fixed monthly salary for the vacancy is $20,000 and above.
The role is short-term, i.e. not more than 1 month.
The role is to be filled by a local transferee, i.e. an existing employee from the company in Singapore transferring to another related branch, subsidiary, or affiliate in Singapore.
The role is to be filled by a candidate choosing to apply as an overseas intra-corporate transferee under the World Trade Organisation’s General Agreement on Trade in Services or an applicable Free Trade Agreement that Singapore is party to.

Keep in mind, though, that even if you are exempt, the MOM still recommends listing any open positions on Jobs Bank.

If, after 28 days, companies are unable to find a local to fill the position, they could advertise the job elsewhere and open it up to foreign applicants.

2020 revisions

The scope of the FCF was expanded in 2020 to cover more Work Passes and increase the minimum time period for advertisement.

With Effect from 1 October 2020:

The FCF job advertising requirement will be extended to S Pass applications

to promote greater awareness of vacancies in mid-skilled jobs among local jobseekers and require employers to make greater efforts to consider local candidates.
The minimum FCF job advertising duration for EP and S Pass applications will be doubled from 14 to 28 days

to give local jobseekers more time to respond to job openings and for employers to seriously evaluate their applications.

Firms that do not fulfil the listing requirement will not be able to apply for an Employment Pass or S-Pass for a foreigner to fill the empty position.

Punishments for violations

MOM proactively monitors indications of discriminatory hiring practices. Once flagged, potentially errant employers are placed on the FCF Watchlist for closer scrutiny. Employees and third parties may also report companies they suspect of discriminatory HR practices.

Here are some things that MOM will pay close attention to:

Complaints of discriminatory HR practices (e.g. involving age, race, religion or nationality bias)
Hiring practices that differ significantly from those of industry peers. For example, employers with an exceptionally high proportion of foreign PMETs, or very high concentration of a single nationality within their organisation
Job descriptions that request highly personal information

If your company is placed on the Watchlist:

MOM will more closely examine all of your EP applications
MOM may require more information on your company’s HR practices
EP applications may take three or more months to process, compared to the normal 10 working days
The duration of a renewed EP may be shortened to one year (compared with the norm of two years)

Companies will have six months to come off the Watchlist. This can be done by showing the following to TAFEP, a TAL agency:

A comprehensive plan to improve fair employment practices
Evidence of fair consideration for all candidates
Your willingness to work directly with TAFEP to make improvements and changes

If the Watchlisted employer doesn’t improve within six months, they can expect their EP applications to be rejected automatically by MOM.

The very real impact on employee passes

Between 2016 and August 2020, MOM has scrutinised a total of more than 1,200 employers under the FCF. In all, 3,200 EP applications have been rejected or withheld by MOM, or withdrawn by employers.

The sectors with the most FCF violations are:

Administrative and support services
Education
Information and communications
Professional services, and
Wholesale trade.

To comply with the FCF, get in touch with a work visa expert

Now that you know about the FCF, you are now better equipped to make foreign hires. The FCF is here to stay, and staying in line with the FCF guidelines will ensure that your foreign hires go as smoothly as possible.

For more detailed advice on hiring foreign talent while navigating a constantly changing legal landscape, get in touch with our visa specialists.