Foreign Workers Policy and New Employment Rules

by singaporearmchaircritic

As if voting for the passage of the controversial Population White Paper is not enough, some of our PAP MPs would jump at any opportunity to urge a rethinking of the “tightening” of our ultra-liberal foreign workers policy.

Nee Soon GRC MP Lee Bee Wah, also Chairman of the Government Parliamentary Committee for National Development, had this to say of the collapsed ceiling at JEM that injured three:

Every time a contractor renews work permit for their workers, they face some difficulties and therefore keep changing staff. That could mean we don’t have experienced engineers or inspectors. The government should really look into this (emphases mine).

Now what “experienced” engineers and inspectors are employed by work permit, a category which now curiously includes S pass by MOM’s definition, and only requires a monthly salary of SGD2,200 to qualify?

If developers and contractors are only willing to pay SGD2,200 for an “experienced” engineer, then the question we should all be asking is whether building construction is being compromised by recruiting engineers of this caliber.

Should this be the case, the root of the problem is not the supposed “tightening” of our foreign workers policy, but instead an overly liberal foreign workers policy that places a “foreign talent” at a low threshold of SGD2,200, a monthly salary which is lower than that of a fresh graduate in Singapore.

Growth in Foreign Workers Population

Taking stock of our foreign workers population, we can see from the figures published on the MOM website that there is a continuing inflow of foreign workers, as PM Lee Hsien Loong acknowledged in his recent National Day Rally speech in mandarin. The foreign worker population is growing still, albeit at a slower pace (see chart below).


From the absolute numbers on MOM’s website, we can see that the number of foreigners holding employment passes has declined slightly by 1,700 from last December to this June. This decline, however, is more than compensated by the increase of 11,700 in the number of S passes.



This is a cause for concern because foreigners on employment passes and S passes often compete directly with Singaporeans for limited PMET positions. S passes, in particular, are presumably issued for junior PMETs. (Competition may also stem from fresh foreign graduates, who may apply for the Q1 employment pass if they fetch a salary of at least SGD3,000.)

As I mentioned before in an earlier post, it is highly plausible that some employers, reluctant to pay the higher qualifying salaries (see table below) for their foreign workers, have “downgraded” and applied for S passes for the same employees upon expiry of their passes, or for new employees whom they would previously hire as employment pass holders.


(source). From January 2014, the qualifying salary of Q1 pass holders will be raised to SGD3,300.

In the second quarter of 2013, PMETs made up close to two-thirds or 65% of residents laid off.

At the same time, using the term “residents” interchangeably with “locals,” MOM says that “Local employment rose by 34,100 in the first half of 2013, up from the gains of 22,800 in the same period last year, indicating that employers hired more locals to meet their manpower needs.”

Without clarifying how “local” employment breaks down into citizens and permanent residents, it further claims that the increase “reflects the various measures to increase the employability of locals.”

Fairer Employment for Singaporeans?

At the time of writing, MOM has just announced new employment rules under the Fair Consideration Framework (FCF).

From August 2014, employers will have to post job vacancies on a new government jobs bank for at least 14 days before they can apply to hire an employment pass holder. This applies to jobs paying less than SGD12,000 a month.

While the measures seem promising, note that they only apply to employment passes. One possible way unscrupulous employers who are more concerned about cost than caliber may sidestep the new rules is to hire junior foreign PMETs on S passes instead.

Between now till August next year when the new rules kick in, therefore, it is predictable that more recruiters will downgrade their employees on employment pass to S pass. The number of S passes issued over this period may swell significantly.

Furthermore, the effectiveness of the new rules hinges on how well they are enforced. Without independent trade unions to speak up for the rights of Singaporean workers, to what extent can we rely on our pro-business government to conscientiously and diligently enforce the rules on errant employers?

This blogpost first appeared on The Online Citizen.