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Minister Josephine Teo responds to PQs on fair employment practices, cost-saving measures, and retrenchment

Minister Josephine Teo responds to PQs on fair employment practices, cost-saving measures, and retrenchment


In Parliament on Friday (4 September), Minister for Manpower Josephine Teo tackled a series of questions by Members of Parliament (MP), on the topics of fair employment practices, fair cost-saving measures, and retrenchments.

Firstly, on the topic of how employers' employment practices are monitored and how they are held accountable, she highlighted that the Ministry of Manpower (MOM) is currently working closely with the Tripartite Alliance for Fair & Progressive Employment Practices (TAFEP) to follow up on all complaints of potential malpractices at workplaces. 

She said: "All forms of discrimination are covered, including for age, gender, ethnicity and family circumstances. We also monitor the workforce profile of firms for potential unfair hiring practices against Singaporeans."

For example, she added, the Ministry has regularly taken employers to task for pre-selecting a foreign candidate and disregarding qualified local candidates. Just this year alone, the Ministry has suspended the work pass privileges of 90 employers due to infringements under the Fair Consideration Framework (FCF), including for age and gender discrimination. As such, these companies will not be able to renew their 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 to boost local employment."

On a similar note, the Minister was also asked about publicly naming the firms who have been placed on the FCF Watchlist, and for their access to government grants and tax incentive schemes to be withdrawn

To this, she stressed that firms placed on the FCF Watchlist have not flouted any rules but instead, have been identified through proactive surveillance; and that upon investigation, some employers were either found to be genuinely unfamiliar with local recruitment channels, or to have had their recruitment limited by directives imposed by overseas HQs.

As such, Minister Teo noted: "Measures we take must therefore be proportional and also consider the impact on their existing local workforce."

More importantly, most employers on the watchlist have been responsive to TAFEP's engagement efforts and expanded their employment of local PMETs with help from Workforce Singapore (WSG), and thus naming them would "likely have frustrated their local hiring efforts and is ultimately counter-productive," she said.

"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."

Minister Teo then went on to cite that since 2016, more than 1,200 employers have been watched under the FCF, with a total of 3,200 EP applications rejected or withheld by MOM, or subsequently withdrawn. 

While this was so, companies that had been placed on the FCF Watchlist have hired more than 4,800 Singaporean PMETs in total, on top of the local employees they had managed to retain. 

Moving forward, the Ministry plans to proactively engage even more companies under the framework, including those whose Singaporean core has been weakening, or whose EP and S Pass workforce are concentrated with a single foreign nationality source. 

Minister Teo added: "We will work with economic agencies like EDB and MAS to engage these firms to improve their workforce profile. We will also engage the HR community to do more."

Apart from that, she also highlighted that whether or not a firm is on the FCF Watchlist, where MOM has found evidence of discriminatory hiring practices, it has taken these companies to task and publicised the names of the firms.

In the last part of her response, Minister Teo then moved onto the topic of how tripartite consultations have focused on ensuring fairness in cost-saving measures and retrenchments. 

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

Further, since March, employers are now required to notify MOM on their cost-saving measures and for those that are 'concerning', TAFEP will step in to engage them and assess the fairness and reasonableness of their measures. 

Of the 850 employers who have been engaged, nearly 40% have reviewed their cost-saving measures to give more wage support to employees; while about 1,000 more complaints by employees have been mediated.

Next, on retrenchments, she noted that the MOM, NTUC, and the Singapore National Employers Federation have jointly updated the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment in March. Additionally, employers with 10 or more employees, who have retrenched at least five employees within a six-month period, are required to submit a retrenchment notification to the MOM. This covers close to 90% of the workforce in Singapore.

Through this regime, the Ministry will actively monitor retrenchment practices and, firms that have not done so fairly will be investigated, following which MOM may take strong enforcement actions such as suspending their work pass privileges.

Lastly, in response to a suggestion to expand the notification for more employers, Minister Teo said the Ministry is mindful not to impose "excessive reporting requirements" on SMEs and micro-SMEs, "where the effort may not be commensurate with impact."

"Nonetheless, they are encouraged to notify MOM, so that WSG, 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 job seekers, so that retrenched workers may get help even if their employers did not notify MOM.

Photo / 123RF

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