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Written Answer by Minister for Manpower Dr Tan See Leng to PQ on Fair Consideration Framework (FCF) and Complementarity Assessment Framework (COMPASS)

Foreign manpower Employment practices Work passes and permits

NOTICE PAPER NO.1193 OF 2022 FOR A SITTING ON OR AFTER 5 JULY 2022
QUESTION NO. 2922 FOR ORAL ANSWER

MP: Mr Leong Mun Wai

To ask the Minister for Manpower (a) what are the similarities and differences in the underlying rationale for firms with less than 10 employees being exempted from the Fair Consideration Framework (FCF) and for firms with less than 25 employees being exempted from the fundamental criteria 3 and 4 of the Complementarity Assessment Framework (COMPASS) scheme; (b) whether one scheme is more lenient than the other; and (c) how do these exemptions contribute towards strengthening the Singaporean core in our workforce.

Answer:

  1. The Fair Consideration Framework (FCF) sets out requirements for all employers in Singapore to consider the workforce in Singapore fairly for job opportunities. One requirement of the FCF is the job advertising requirement. Employers must first advertise on MyCareersFuture and fairly consider all candidates, before submitting an Employment Pass (EP) or S Pass application. This is intended to promote fair employment practices and improve labour market transparency. In comparison, the Complementarity Assessment Framework (COMPASS) is a holistic points-based assessment which, together with the EP qualifying salary, ensures that EP holders are of sufficiently high quality and complement our local workforce. That is how both the FCF and COMPASS work together to safeguard good employment outcomes for locals. As the FCF job advertising requirement and COMPASS impact small firms in different ways, the thresholds for small firms are also different under these two policies. Let me elaborate.

  2. Small firms with fewer than 10 employees are exempted from the FCF job advertising requirement. This is for pragmatic reasons. We recognise that micro-sized firms have limited resources and are mindful of the administrative burden of various rules and regulations on such firms notwithstanding the good intentions. The job advertising requirement is only one part of the FCF. Exemption from the job advertising requirement is not the same as exemption from the FCF. All employers are still expected to practice fair consideration and merit-based hiring as set out in the Tripartite Guidelines for Fair Employment Practices. MOM will investigate all complaints of unfair hiring practices, regardless of the size of the firm in question.

  3. COMPASS has four foundational criteria and two bonus criteria. EP applications need to score 40 points to qualify for an EP. Small firms with fewer than 25 PMET employees will score 10 points by default on the two firm-related criteria on Diversity and Support for Local Employment. This is because the workforce ratios for these two criteria are not meaningful for firms with a relatively small number of PMET employees, as the ratios are easily skewed by small changes in their personnel. Hence, it is more reasonable to give such firms a default score on these firm-related criteria. However, these same firms will still need to score another 20 points on the individual-level or bonus criteria. This ensures that their EP candidates are of sufficiently high quality and complementary to our local workforce. Moreover, as these small firms grow over time, they will subsequently be held to the same requirements as other firms on the firm-related criteria. Therefore, they will still have an incentive to build up a strong local workforce and diverse foreign workforce.

  4. I hope this helps to explain why the threshold used to determine small firms under the FCF and COMPASS is different. It is not because one scheme is more lenient than another, but because the underlying rationale are different. The treatment for small firms under the FCF and COMPASS is designed to take into account the circumstances of such small firms, and ensure that our policies do not affect them disproportionately. Ultimately, it is in our interest to ensure that we have a conducive environment for both local and foreign start-ups to anchor themselves in Singapore and to scale up, creating more job opportunities for locals.