On 6 May 2016, a Joint announcement by the Australia-Singapore Comprehensive Strategic Partnership set out a number of proposed changes to the Singapore-Australia Free Trade Agreement including measures designed to increase the flow of skilled labour between Singapore and Australia. The key aspects of these proposals are set out below; however, the proposed changes must be viewed in the context of the recent introduction by the Singapore Ministry of Manpower that additional "company-related" criteria will be applied during the work pass application process to ensure that companies are developing a "Singaporean Core".
On 6 May 2016, Australia and Singapore announced that the Third Singapore-Australia Free Trade Agreement (SAFTA) review was substantially concluded. The SAFTA was signed in 2003 and has undergone periodical reviews. This third review builds on commitments made by both governments under the Comprehensive Strategic Partnership agreement made in June 2015, to unlock new trade and investment opportunities.
To formalise the 6 May announcement, a revised text of the SAFTA will still need to be prepared and domestic implementing legislation passed.
One key area that was reviewed and to which changes have been proposed is labour mobility.
The 6 May announcement proposes improved mobility and increased lengths of stay for business people, including investors/independent executives and contractual service suppliers and their families and installers and servicers of machinery and equipment. It also promotes greater transparency to support business people seeking to move between the Singapore and Australia markets.
Under the announced changes to the SAFTA, Singapore commits to provide access for Australians to stay and work in Singapore in the following categories:
- independent executives and contractual service suppliers: up from three months to two years
- intra-corporate transferees: up from two years to three years with a new maximum stay of 15 years
- employees of companies offering services relating to the installation and servicing of machinery and equipment: up to three months
- spouses and dependants of individuals granted entry as intra-corporate transferees, independent executives and contractual service suppliers.
A specialised Australian helpdesk at Singapore’s Ministry of Manpower (MOM) is also proposed.
Continued importance of Fair Consideration Framework
While it is yet to be seen how the SAFTA proposals will be formally implemented, it is expected that companies seeking to take advantage of the proposed changes will still need to demonstrate that other work permit conditions are met (as is currently the case).
As per our update last month, the MOM has recently refined the work pass application process, and introduced additional "company related" criteria relevant when assessing work pass applications, namely:
- the strength of the company's "Singaporean Core";
- if the company has a weak "Singaporean Core", its commitment to nurture and strengthen this in the future; and
- the company's relevance to Singapore's economy and society.
What this means for employers
While the proposed changes brought about by the recent SAFTA review can be welcomed by organisations with employee movement between Singapore and Australia, companies with operations in Singapore should continue to ensure their adherence to the Fair Consideration Framework and be able to demonstrate that they are taking steps to treat Singaporeans fairly in their hiring practices and maintain a strong "Singaporean Core".
This new SAFTA review, and the desire to unlock new trade and investment opportunities between Singapore and Australia by making it easier for Australian nationals to work in Singapore, should not be viewed as a way around the need to build a "Singaporean Core". Employment Pass applications, including those for Australians, will still need to satisfy the "company related" criteria set out above, and companies should ensure that they are recruiting and investing in a "Singapore Core".