Review of Employment Pass Criteria and Applications in View of Increasing Citizen Unemployment Rate

Mr Murali Pillai asked the Minister for Manpower in light of the slowing growth of Singapore's economy this year and increasing citizen unemployment rate which stood at 3.3% as at June 2019, whether the Ministry will consider (i) tightening the Employment Pass (EP) criteria last reviewed in 2017 and (ii) reviewing EP applications by companies for permanent positions which are at the same time offered only on a fixed time contract basis to Singaporeans.

Based on preliminary data for the second quarter of 2019, total employment has continued to grow, although at a slower pace compared to the previous quarter and a year ago. At the same time, retrenchments have not picked up and remained fairly low at 2,300. Unemployment inched upwards but also remains low. This suggests that most employers are not laying off existing workers, but exercising greater caution in hiring.

MOM and our tripartite partners are closely monitoring the economy and labour market, and stand ready to step up support for companies and workers through the Adapt and Grow (A&G) initiative. This includes employment facilitation services and Professional Conversion Programmes offered by Workforce Singapore (WSG) and NTUC's Employment and Employability Institute (e2i).

Employment Pass (EP) holders typically renew their EP every two to three years, and all new and renewal applications are subject to the prevailing EP salary thresholds at that point. The EP criteria were last reviewed in 2017, with higher salary thresholds imposed, not just at entry level, but also for older EP holders. The increased salary thresholds reflect local salary progression, so that employers do not substitute local PMETs with cheaper EP holders, and that EP holders are of the right calibre to complement our local workforce. We will continue to monitor wage levels of local PMETs, and will revise the EP salary thresholds if necessary.

The scenario that the Member outlined, where for the same job, an EP holder is offered a permanent position, but a local offered a fixed term contract, would appear to be a breach of the Tripartite Guidelines on Fair Employment Practices (TGFEP). So far, MOM and the Tripartite Alliance for Fair & Progressive Employment Practices (TAFEP) have not received reports of this nature. We urge members of the public who are aware of such cases to report them.