On August 1, 2014, Singapore’s Ministry of Manpower’s (“MOM”) Fair Consideration Framework (“FCF”) came into full force.  Key provisions of the FCF include (i) a requirement that organizations justify why they are hiring a foreign national over a Singaporean when applying for employment passes (“EPs”); and (ii) new exemptions from the advertising requirements. The following is a summary of the FCF, including how its advertising requirements will change how companies hire employees.

Employers in Singapore must now provide reasons justifying their EP applications.  The MOM encourages organizations to avoid stating preferences for Singaporeans or any nationality in job advertisements.  However, organizations must now be prepared if the MOM asks them to provide reasons for not hiring a Singaporean when applying for an EP.  Organizations can prepare for these changes by retaining interview and job offer records to produce to the MOM as evidence if their EP applications are challenged.

Normally, if a company wants to hire a foreign national on an EP, it must advertise the job vacancy on the Jobs Bank (https://www.jobsbank.gov.sg/).The advertisement must run for at least 14 calendar days before an EP application can be submitted.  The vacancy must also be open to Singaporeans and must comply with the Tripartite Guidelines on Fair Employment Practices.  However, the MOM has added new exemptions from the FCF’s advertising requirement, which includes: (i) companies that hire 25 or fewer employees; (ii) positions paying a fixed monthly salary of SGD12,000 and above; (iii) intracompany transfers (“ICTs”); and (iv) a job that is necessary for short-term contingencies not longer than one month. 

Specifically, the third (ICT) exemption is intended to facilitate intracompany transfers.  An ICT is defined under the World Trade Organization’s General Agreement on Trade in Services as a manager, executive or specialist.  In order to take advantage of the exemption, the ICT must also have worked for the company outside Singapore for at least one year before being transferred to Singapore.  An ICT’s stay in Singapore is limited to an initial period of three years, but this status may be extended by two years for a total period not exceeding five years.

The fourth exemption is provided to allow companies to address unexpected contingencies where it is impracticable to meet the advertising requirements.  However, an EP holder under this exemption cannot renew or apply for a new EP for a period of three months after the expiry of the EP.

The FCF is designed to ensure that organizations do not adopt discriminatory hiring practices. To this end, the MOM has been increasingly active in reaching out to organizations and requesting information regarding their employment practices to ensure compliance. Organizations must therefore ensure that they comply with the FCF requirements.