Jurisdiction - Singapore
Reports and Analysis
Singapore – Fair Consideration Framework: Are You Ready?

30 July, 2014

 

Legal News & Analysis – Asia Pacific – Singapore – Labour & Employment

 

Introduction


Following from our last update in September 2013, 1 August 2014 is almost upon us. From this date, prior to making an application for an Employment Pass (“EP”), companies will be required to advertise the job vacancy on a new national Jobs Bank administered by Singapore’s Workforce Development Agency (“WDA”) for at least 14 days. This requirement is part of the Singapore Government’s overall effort to ensure that companies consider Singaporeans fairly for job vacancies, particularly at the managerial and executive level, and to put in place fair employment, hiring and staff development practices that are open, merit-based and non-discriminatory.


Apart from the requirement to advertise on the national Jobs Bank, under the Fair Consideration Framework (“FCF”), companies are also expected to comply with the Tripartite Guidelines on Fair Employment Practices (“TAFEP”), and in particular, companies are required to attract and consider Singaporeans for job positions on merit, and to train and develop potential and careers of Singaporean employees.
This client update will discuss some of the key issues related to the requirement to advertise on the national Jobs Banks, and other issues related to the FCF as a whole. This client update will also discuss briefly the implications of Singapore’s new personal data protection legislation on the hiring process of a company.


Key Issues To Consider


While it appears that the only new obligation imposed on companies from 1 August 2014 is a duty to post an employment vacancy on the national Jobs Bank prior to hiring an EP holder, this is not necessarily true. Essentially, companies who do not want to fall foul of the FCF and attract additional scrutiny from the Ministry of Manpower (“MOM”) will want to review their existing HR practices and ensure that the following issues have been addressed:


(a) Do my job applicant forms suggest that I do not hire an employee based solely on his / her merits? Does my company’s job application form require the applicant to state information that is not necessary to perform the duties of the job?


(b) Does my company have in place a discrimination policy, and other policies relating to employee progression? If yes, do all my employees adhere to these polices?


(c) Will I be required to advertise on the national Jobs Bank if the position has a salary range, with the higher tier being above SGD 12k?


(d) Given that vacancies offering a salary above SGD 12k are exempted from the advertisement requirement, must I still advertise on the national Jobs Bank if the vacancy offers a salary of SGD 12,050?


(e) Will my company still be required to advertise on the national Jobs Bank if we are transferring an employee from an overseas subsidiary? Does this transfer fall within the ambit of the intra-corporate transfer exemption?


(f) Does my company have in place a process whereby all resumes received by the company are reviewed to ensure that the applicant meets the requirements of the role?


(g) Are there any policies and / or practices that deal with rejected applicants within my company? Does my company make a note of the reasons for rejecting a potential employee?


In essence, although the obligation to advertise a job vacancy on the national Jobs Bank is a fairly straightforward one, the overall framework of the FCF raises an interesting myriad of issues that a company will have to contend with. All the issues that we have raised above will need to be carefully considered by companies.


While the answers to some of the questions that we have raised above may seem simple, it is not necessarily always the case. For example, a company will need to ask itself why certain information, such as an applicant’s age or nationality, is required in its application process. Further, a company may also need to question if it is able to justify hiring a foreigner over a similarly or slightly lower qualified Singaporean.

 

Ultimately, the onus is on the company being able to show, when questioned by the MOM, that it has put in place HR practices which are based on merit, and on the suitability of a potential candidate for the role, and that a Singaporean employee is not rejected for a role solely by reason of his nationality.


Personal Data Protection & Employment


As an additional point, companies may wish to note that the key data protection obligations of Singapore’s Personal Data Protection Act 2012 (Act 26 of 2012) (“PDPA”) came into force on 2 July 2014. On this, and as a practical point, companies will need to put in place internal processes, relating to personal data, in order to comply with the PDPA. In particular, companies will need to review its procedures relating to the collection, use, disclosure, storage and destruction of CVs of rejected job applicants to ensure that the provisions of the PDPA have not been infringed.


Companies will, therefore, need to ensure that rejected CVs are not disclosed to other third parties, and that the CVs received by the company are only used for the purposes of determining the suitability of the applicant for the job position that he / she had applied for. One interesting question that arises from this is whether the company can use the personal data contained in the CV to consider the applicant for other job positions.


Conclusion


As the employment landscape in Singapore continues to be more focused on Singaporeans, it is important that companies operating in Singapore be aware of the new requirements and ensure that their employment processes adhere to the overall spirit and objective of the FCF. This is particularly so given that companies found to have infringed the principles of the FCF will be subject to additional scrutiny from the MOM and may be required to provide an undertaking to the MOM not to displace Singaporeans and / or have their work pass privileges for a significant period of time, which are highly disruptive to the operations of companies that operate across multiple jurisdictions.


In conclusion, there are no straightforward answers to the various questions that we have raised, but it is recommended that companies, whether big or small, make a conscious effort to amend or improve their HR and hiring practices to ensure that they do not fall foul of the underlying principles of the FCF.

 

Rajah & Tann

 

For further information, please contact:

 

Abdul Jabbar, Partner, Rajah & Tann
abdul.jabbar@rajahtann.com

 

Kala Anandarajah, Partner, Rajah & Tann 

kala.anandarajah@rajahtann.com

 

Desmond Wee, Partner, Rajah & Tann

desmond.wee@rajahtann.com


Lionel Tan, Partner, Rajah & Tann
lionel.tan@rajahtann.com

 

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