Developments on Fair Consideration Framework and Measures on Discriminatory Hiring Practices

Ms He Ting Ru asked the Minister for Manpower whether she can provide an update on the latest tripartite discussions relating to fair employment practices, in particular discriminatory hiring and human resource practices, including nationality, race, age and religious-based discrimination.

Thank you. Members have filed a number of Parliamentary Questions on the topic of fair employment practices – some are for the next Sitting and others are for Written Answers.

I appreciate that these questions are of concern to Singaporeans and seek Members' understanding to take these related questions together, so that we can deal with them more holistically.

Ms Foo Mee Har asked how employers’ employment practices are monitored and employers held accountable. Ms He Ting Ru asked about tripartite discussions on discriminatory practices.

Sir, the Tripartite Guidelines on Fair Employment Practices spell out the principles and practices that all employers are expected to abide by. In practice, MOM works closely with the Tripartite Alliance for Fair and Progressive Employment Practices or TAFEP to follow up on all complaints of potential malpractices at workplaces. All forms of discrimination are covered, including for age, gender, ethnicity and family circumstances. We also monitor the workforce profiles of firms for potential unfair hiring practices against Singaporeans.

For example, MOM has regularly taken employers to task for pre-selecting a foreign candidate and disregarding qualified local candidates. This year alone, 90 employers have had their work pass privileges suspended because of infringements under the Fair Consideration Framework or FCF, including for age and gender discrimination. This means that the company cannot renew existing work passes or have new applications approved – some for as long as two years. These penalties are serious and the employers know it. To stay in business, it will be necessary for them to boost local employment.

To questions by Mr Louis Chua and Mr Seah Kian Peng, there are currently about 400 firms placed on the FCF Watchlist for having a higher share of foreign PMETs compared to their industry peers, or high concentrations of a single foreign nationality source. Employment Pass or EP applications from these firms are held back, while TAFEP engages these firms to help them improve their human resource practices.

Mr Yip Hon Weng, Mr Ang Wei Neng and Mr Louis Chua suggested publicly naming firms placed on the FCF Watchlist. Mr Chua further asked for these firms’ access to Government grants and tax incentives schemes to be withdrawn. As I explained in Parliament on 1 September 2020, unlike firms whom we have taken to task for infringements, firms on the FCF Watchlist have not flouted any rules. Instead, we identified them through proactive surveillance. We are watching them.

Members may recall that on Tuesday, I shared a few examples. Upon investigation, we found some employers to be genuinely unfamiliar with local recruitment channels or whose recruitment had been limited by directives imposed by overseas headquarters. Measures we take for these firms must therefore be proportional and also consider the impact on their existing local workforce.

In most instances, employers on the FCF Watchlist have been responsive to TAFEP’s engagement efforts and expanded their employment of local PMETs with help from Workforce Singapore. Naming these firms would likely have frustrated their local hiring efforts and is ultimately counter-productive. Instead, following TAFEP’s intervention, many firms exit the FCF Watchlist within a year. For the minority who are uncooperative, refusing to make adjustments even after options have been suggested to them, their work pass privileges remain suspended.

This approach has served us well. Since 2016, more than 1,200 employers have been scrutinised under the FCF. In all, 3,200 EP applications by these employers have been rejected or withheld by MOM, or withdrawn subsequently by the firms themselves. On the other hand, firms on the FCF Watchlist have hired more than 4,800 Singaporean PMETs in total. So, we withheld 3,200 or rejected them, or they got withdrawn. And then, these firms collectively hired more than 4,800 Singaporean PMETs in total. That is a net gain.

This comes on top of all the local employees that these firms originally employed and continued to retain.

We plan to proactively engage even more companies under the FCF, such as those whose Singaporean Core has been weakening, or whose EP and S Pass workforce are concentrated with a single foreign nationality source. We will work with economic agencies like EDB and MAS to engage these firms to improve their workforce profiles. We will also engage the HR community to do more.

Whether or not the firms are on the FCF Watchlist, where MOM has found evidence of discriminatory hiring practices, we have taken the companies to task and publicised the names of these firms. In January 2020, MOM released the names of four employers penalised for pre-selection of foreigners or not adhering to the spirit of the FCF job advertising requirement, and one employer for gender-related discriminatory hiring. In March 2020, MOM released the names of five employers penalised for age-related discriminatory hiring.

This is no different than if the company had been charged in Court for employment offences.

On Ms He Ting Ru’s question, tripartite consultations in recent months have focused on ensuring fairness when companies implement cost-saving measures or have to retrench workers.

First, on cost-saving measures, the National Wages Council or NWC was convened in March this year and was re-convened in August. It is expected to update guidelines on managing excess manpower within this month.

Since March this year, MOM has introduced a new requirement for employers to notify MOM of their cost-saving measures. To Ms Foo Mee Har’s question, we identify companies whose notifications are concerning and TAFEP engages them to assess whether their measures are fair and reasonable. Of the 850 employers engaged, close to 40% reviewed their cost-saving measures to give more wage support to their employees. Similarly, we mediated another 1,000 or so complaints by employees.

Second, on retrenchments, MOM, NTUC and the Singapore National Employers Federation jointly updated the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment or TAMEM in March.

In addition, MOM requires employers with 10 or more employees that have retrenched at least five employees within any six-month period to submit a retrenchment notification. This covers close to 90% of the workforce in Singapore. In other words, this retrenchment requirement would already have covered about 90% of the workforce.

Through the notification regime, we actively monitor retrenchment practices. Vast majority of the retrenchments have been conducted fairly and responsibly. Firms that have not done so fairly will be investigated and MOM may take strong enforcement actions such as suspending their work pass privileges.

To Mr Patrick Tay’s suggestion to expand the notification to more employers, we are mindful not to impose excessive reporting requirements on SMEs and micro-SMEs where the effort may not be commensurate with impact. Nonetheless, we encourage these firms to still notify MOM, so that Workforce Singapore, the tripartite partners and other relevant agencies can step in promptly to provide job assistance to affected employees. We have also expanded outreach efforts to jobseekers, so that retrenched workers may get help even if their employers did not notify MOM.

Sir, in conclusion, in the current economic climate, MOM understands Singaporeans need greater assurance that they have a fair chance for job opportunities and are treated fairly at their workplaces. MOM and our tripartite partners will continue to guard against unfair hiring or retrenchment practices and take appropriate action against errant employers.

Thank you, Sir. Two clarifications for the Minister. First, I think she mentioned there are 1,200 companies on the FCF Watchlist. Could I ask how many of these companies are there because of discrimination against women and on family responsibilities?

Second, on the earlier suggestion that I made this week, on whether we can legislate these guidelines on fair employment practices. I think it makes a bit of sense. If you discriminate against Singaporeans and hire foreigners, we will restrict or curtail your work pass privileges; we do not allow you to hire foreigners. That sort of makes sense. But if you discriminate against women and mothers, and the penalty is that you cannot hire foreigners, then I hope the Minister agrees with me that that does not really make sense. So, the question is whether we can legislate these guidelines, have proper penalties in place that will serve as a better deterrence against discrimination against women and mothers.

Sir, in terms of thinking and alignment of values, I feel very close to Mr Louis Ng. First, a point of clarification that the Member sought, which are the 1,200 companies that we had scrutinised over the years under FCF, what kinds of concerns did we have. As I explained, they had not made any infringements. We were doing proactive surveillance. We looked at their workforce profiles. In general, we found that there was a heavier proportion of foreigners in their PMET workforce, compared to their industry peers. So, we picked them up and tried to undersand why their workforce profiles were the way they were, and helped them to improve.

The Member has asked whether for other forms of discrimination – not nationality discrimination but for other forms of discrimination – whether legislation is the right tool and we could consider that. Perhaps, two things to point out. First, the Government is not so averse to using legislation, provided it can achieve a good effect. If I can cite the example of concerns about age discrimination. We do have the Retirement and Re-employment Act which stipulates the minimum age below which employers cannot say, "You're too old and you must retire." We also have the re-employment age legislation which compels the employers, even after his employee has reached the minimum statutory retirement age, to offer re-employment. So that we safeguard the opportunities for them to continue working – not necessarily in the same job and not necessarily holding the same pay.

Using legislative tools in order to protect the interest of workers is not so unthinkable and have been used on many different occasions.

I understand where the Member is coming from, that in terms of legislating against discrimination for gender, should we perhaps take the next step forward. I have also responded to – I am sorry, I should have done this another way – I texted Mr Vikram Nair after he gave his speech yesterday. So, I will share with Members what I texted him. He gave the suggestion that perhaps you can provide legislative levers to allow individuals who had been aggrieved by nationality bias to seek redress from the employer. And I had texted him to say that this is not unthinkable, it is something that we can discuss, whether we want to move forward.

So, my answer to Mr Louis Ng is, yes, we always keep the options open, but we must ask ourselves what is the crux here. The crux here really is that if you speak to all the women, yes, on occasions, we have identified cases where the employers, either the questions that they asked were very biased, in terms of suggesting that their family circumstances were not welcome at the workplace, or that the very fact that they were women prevented them from doing certain roles. We know of some employers like that, but they are very much in the minority. You will also see that there are many women who have gotten into good positions because their employers are quite enlightened.

So, legislation is quite a blunt tool. It basically can be quite prescriptive in nature.

What else it is that we have done to promote women in employment and make sure that they get a fair deal? We have, for example, through many years of investment in their education, helped them to acquire the skills no different from men, and they can advance. I think the other one that we have always been very mindful of, and women Members of Parliament have spoken on this extensively, it has to do with how you can improve the support that they have from the family, so that does not prevent them from making progress in their careers.

Mr Speaker, I thank the Minister for the comprehensive reply. I have three clarifications. The first one is, I hear from the Minister that some companies have directives from their HQ out of Singapore to ask them to practise unfair recruitment. Why can we not nip the problem at source where we inform the companies before they set up shop in Singapore? We can tell them about the guidelines.

And number two, we have also heard the Minister said they do surveillance and identify companies that have a high concentration of Employment and S Pass holders, all from certain a nationality. Can MOM be even more proactive even before they have this number that is of concern? Can you stop them from hiring anymore workers based on S Pass and E Pass, which means it is more proactive than after the fact itself?

The third one is that I would like the Minister to consider what I said in my speech on Monday, to set up a National Human Resource Committee, so that you have regular engagement with the head of human resources and personnel in the various large companies, to share with them the best practices on how to form a Singaporean Core. For example, DBS is one good example.

I thank the Member. Mr Speaker, to address the Member's of questions, I should clarify that in the instance that I described, the foreign headquarters, the overseas headquarters of the firm in concern did not direct the local office in Singapore to hire unfairly. I think no company does that. What they did, however, not recognise or did not understand our employment landscape, was that actually many of the positions that they were seeking do not necessarily require degree qualifications. For example, if they are seeking an IT role, actually our Polytechnic graduates are just as qualified, and with the right training can also do the job.

So, what the local office previously did was blindly implement the directive from the headquarters that every single one of their recruits must meet degree qualifications. When we pointed out to them that for the positions that they are hiring, Polytechnic diploma holders are equally qualified, what they then did was to take it up with headquarters and persuaded the headquarters to change the recruitment criteria. So, I hope that clarification will help.

To the Member Mr Ang's suggestion on the National Human Resource Committee, it already exists. It is called the Institute of Human Resource Professionals. They have certification programmes. They have communities of practice. We engage them regularly and we intend to do more.

Then there are other similar organisations, the Singapore Human Resource Institute. They are also very active in trying to level up HR practices in Singapore. We applaud them for the efforts. MOM works very closely with them. I think they do really want to help and raise the bar, and we very much encourage their proactive efforts.

I thank the Minister for her detailed explanation. I would like to post three clarifications or further questions.

The first is, the Minister mentioned that most of the companies exit this watchlist after a year. But I would like to know how many persistent offenders have we seen amongst the companies who have been on the watchlist. Because this will inform us as to whether the sanctions are enough. I think this is helpful information for us to know. And second is the balance of complaints and active surveillance that has been conducted by MOM. The third is whether there are any GLCs who are currently on the watchlist.

Mr Speaker, I thank the Member for her question. The third question first. I think the Member wanted to know whether we have put any Temasek-linked companies on the watchlist. The answer is no, not because they were given any special concession or treatment, but the proactive surveillance that we carried out did not pick them up.

The second question, is the balance between complaints and proactive surveillance. Actually, the proactive surveillance has brought us into more direct engagements with the companies. None of these companies would have been surfaced to our attention if not for proactive surveillance. Their employees actually did not raise the concerns with us. If you look at the complaints that were raised to MOM and the number of companies that we have scrutinised, I do not have the exact figure with me, but based on my impression also getting emails and reading all the complaints that were filed with our Labour Relations Department, I stand corrected, but actually I think our proactive surveillance has reached out to more companies.

The last question is on how many companies that have not yet exited. They are in the minority; I will put it at less than 10%. The reason why I do not give you a very specific number is because even if the company has exited from the watchlist, it does not mean we stop watching them. We continue to watch them. If they revert to the old patterns of hiring and we are concerned about their workforce profile again, then they can get put back into the watchlist.

And, Sir, if I may, I should also answer Mr Ang's earlier question. He said why not take an even more proactive approach. The FCF watchlist is the proactive approach. And I also said in my reply that we intend to engage an even wider group of companies to reshape their workforce profiles.

I thank the Minister for answering this Parliamentary Question and also the subsequent Parliamentary Questions. I have two supplementary questions in two areas. Firstly, on the FCF watchlist. The second question, on the mandatory reporting of retrenchments.

In the area of FCF, I have suggested of us publishing and, of course, many Members of this House as well. If there are companies that have been recalcitrant, meaning after one year of rehabilitation or assistance, they have not improved, is there a problem publicising this list of recalcitrant employers? The other one is, among these 400 firms that are on the watchlist, what proportion are MNCs, what are LLEs, SMEs and micro-SMEs?

On the mandatory retrenchment reporting, I am a bit concerned that MOM is taking the position that we do not require micro-SMEs and SMEs to do mandatory reporting. Why is that so? Because, if you see many of the malpractices, the lay-offs that are happening in the past couple of months, mostly are from micro-SMEs and SMEs. From two perspectives: one, we want to ensure fair retrenchment practices; two, we want to ensure we provide the necessary interventions from Workforce Singapore as well e2i, to assist some of these micro-SMEs and SMEs, so that we have advanced and proactive or pre-emptive steps that we can take to help these companies. So, from that perspective, I hope MOM can look at both these areas.

Sir, on Mr Tay's question on mandatory reporting, there are, as far as I know, more than 100,000 SMEs. To ask every single one of them to make a report, even if most of them have not done anything bad prima facie, we are saying that we are not very sure, and it does not matter whether we can really pick it up much from it or not.

So, I think we have to balance between whether we assume that every single one of them have retrenched in a very unfair manner and that is why the reporting will allow us to go after every single one of them, or do we ask whether there are complementary avenues.

It does not prevent the worker himself from raising the issue with MOM. I mentioned that apart from those that we have investigated after they submitted the mandatory retrenchment notification, on top of that, we also investigated an even larger number of those where individuals complained to us. So, the two are complementary to each other. It is not that we only need to depend on one tool.

On his other question about the FCF watchlist, whether the recalcitrant ones can be named, ultimately, it goes back to what our objective is. If our objective is still to try and get them to improve their HR practices, what is a more effective way of doing so? Naming them or continuing to suspend their work pass privileges? I can share with Mr Tay that in some instances, the companies have decided that it is not possible for them to meet up to these requirements and they have decided to exit Singapore altogether. And you do not even need to name them. They find that this set of conditions is not what they would like to deal with; we accept that. Whether you name them or not would not have made much of a difference. But the fact that you have curtailed their work pass privileges, that is what has really made the difference.

Mr Speaker, Sir, I would like to ask a clarification from the Minister. She mentioned in her speech that of the companies in the FCF framework, some were unfamiliar with MOM regulations. I would like to ask her, how many, or the proportion that were really unfamiliar with the regulations.

Mr Speaker, I do not have the breakdown here, neither do I have the breakdown that Mr Tay asked for on what is the profile of the companies on the FCF watchlist. They are a good spread, across different industries, some large, some small.

Mr Speaker, I thank the Minister for her answers. I have three supplementary questions to raise. The first is, on the firms that had been taken to task, following being on the FCF watchlist. At the whole-of-Government level, has there been any correlation to see if these firms previously had been awarded tenders or contracts for Government or Government-related projects, and subsequent to being taken to task, whether any such firms subsequently were awarded Government tenders.

The second question is, whether as part of the paradigm of environmental, social and governance responsibility, which is increasingly being considered these days, whether some Government tenders can consider the role of HR practices either as a clear criterion or as a tie-breaker in the event of two companies having very similar value prepositions otherwise.

The third question, Mr Speaker, is to ask, whether or not, the Ministry has used or is considering using the "Mystery Shopper" methodology to look for companies with discriminatory hiring practices. Just to briefly elaborate, the Mystery Shopper approach involves sending CVs with otherwise identical qualifications, but varying the age, the ethnicity as suggested by the name, to the company. The idea is to, by doing this "A/B" testing to see whether there are companies that have a clear pattern of rejecting certain applications at the CV or resume stage. This may help identify soft discrimination before it becomes a bigger issue.

Sir, I thank the Member for his questions. The proactive surveillance under FCF watchlist, is in fact, the "Mystery Shopper" programme that he has talked about. These companies did not surface to our attention because their employees said that something was wrong. And how did we identify them? Very similar to how Dr Tan has described it – a mixture of looking at their workforce profiles, a mixture of looking at how they have responded to advertisements that were put on MyCareersFuture.gov.sg. You put the two together, we see that these companies in terms of their hiring patterns, something does not look quite right. So, then, we put them on the watchlist and we engage them. We asked what is going on, why is it that your pattern of recruitment has been like that? It is in substance, nearly identical, I think, to what Dr Tan has asked.

His first two questions. I think it goes back to what our objective really is. What do you want as an outcome to for these companies that we have put on the watchlist? Is our objective that they improve their hiring so that more local PMETs can be added to their workforce? Or is our objective to frustrate them and to somehow get them to exit Singapore or to exit the business, whatever it is that they are carrying on in Singapore? Keep in mind that although we have identified these companies for proactive surveillance, for engagement, they also do have a sizable local PMET workforce. They are already hirers, employers of Singaporeans holding PMET positions.

The actions that we take must be proportional and it must also not create so much difficulties for the existing PMETs in their workforce who are local and who would very much like to keep their jobs. So, these are the things that we must keep in mind when we decide on what measures to take it. I am not saying that these measures will always be static. We will continue to look at better ways of identifying companies, more that can be picked up accurately, swiftly and at the same time, what further measures will get the companies to reshape their workforce profiles more quickly.

I mentioned on Tuesday that we are evaluating EP and S Pass applications, going to look back at whether the company has kept up its support for local PMETs in their employment. That would include their retrenchment behaviour; it will have a bearing. That will also include whether they have been responsive to efforts by Government agencies to help them recruit and train local PMETs; that will also have a bearing on their EP and S Pass applications.

So, we have a number of tools that we can use but all designed for one objective in mind, which is to reshape the workforce profiles of the companies and to ensure that they treat local candidates fairly, give them a chance to make progress in the companies. And if these individuals have not been known to them, have not been on their radar for possible recruitment and training, then we would want them to make a special effort.

Minister, just two quick clarifications. The first, is on the size of the TAFEP team that surveys, educates and takes action against companies that engage in unfair hiring practices. What is the size of that team? Is the Minister of the view that that team needs to be enlarged?

The second question takes off from comments made by the Second Minister for Manpower in the course of the debate over the last few days. Is MOM looking to beef up resources on unfair hiring practices. Could Minister share some details on what those measures specifically are?

Sir, I would have to come back to Mr Singh on the exact size of the TAFEP team. We have been beefing up, so the latest number I do not have it offhand.

Would we want to strengthen the resources? The answer is yes, but I would also say that at the same time, it is important for us to reach out to employers and to ensure that they do their part to upkeep fair hiring practices.

Why do I say so? If all of our efforts are directed purely towards enforcement, I think what you do create as an environment is one where you are always pitted against each other. You are always assuming that the employers are not trying to do their part, you are always assuming that the employers have something to hide and you are always assuming that the employers have no real difficulties that they are facing of their own.

If you interact with enough employers, they will tell you that, "We have very serious challenges also in reaching out to potential jobseekers". So, we have to take a balanced approach and ask ourselves, what is the combination of actions that will be most helpful to the employers and to the businesses, which in turn will be more helpful to expanding opportunities for our own people. That balance is one that we are always constantly trying to strike.

I was very cheered when Ms He Ting Ru asked the question of what are the tripartite discussions, the tripartite discussions are precisely this – how can each one of us do our part? The unions are reaching out to the jobseekers, encouraging them to understand where the opportunities are and to be willing to be trained for those opportunities. The employers, being cognisant of the slack in the job market, in the availability of jobseekers, possibly redesigning their jobs so that more locals will be attracted to them and also making a real effort to participate in programmes that can help them to strengthen their local workforce.

You need a combination of factors. You cannot overly rely on just one and also create an environment where there is so much distrust and no one believes that it is actually important each one does their part, to strengthen the workforce profiles within businesses and striking the right balance is what we must strive to do.

There are jobs with fixed monthly salary of $20,000 or above which are exempted from advertising on the MyCareersFuture. I wonder what are the measures in place to deter employers from embedding the rental allowance or the kids education allowance into their salary to circumvent this regulation.

Mr Speaker, to Mr Wee's question, would it make a difference if we set it at $25,000 or $30,000? I think the answer is that, if the company was so inclined they can package the salary in any number of ways. That is not the spirit of what we are trying to pursue.

I should also just add this as an important caveat – we are not depending only on the FCF's advertising requirement. This question of the $20,000 is only relevant for whether the job is being advertised. But, as I explained earlier, even if the job is not advertised, just using the "Mystery Shopper" approach that Dr Tan had advocated, we can still identify companies whose workforce profiles give us cause for concern.

And there are people who write to the MOM, they write in to me personally too. We take their feedback seriously, we follow up, we engage the company, we let them know that this has come to our attention, can you help us to understand what went on. If, in that process of engagement, we have reason to suspect that the companies are trying to do all kinds of things to avoid their obligations, to try to avoid good practices, then we will know what to do. It will have a bearing on their future applications. But we must wield this in a very smart way and not in a way that is detrimental to our own interests.