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Greater Flexibility for Businesses to Optimise their Foreign Manpower

Foreign manpower

26 Mar 2012

  1. The Ministry of Manpower (MOM) will accord greater flexibility for businesses to optimise their foreign manpower, within the dependency ratio ceiling (DRC)1 limits. This is in response to calls by some Members of Parliament2 during the recent Budget debate and feedback from industries during MOM’s regular industry engagements.
  2. With effect from July 2012, MOM will extend the maximum Period of Employment (POE) for unskilled Work Permit Holders (WPHs) from Non-Traditional Sources3 (NTS) and the People’s Republic of China (PRC) from the current 6 years to 10 years for all sectors.
  3. MOM will also consider allowing businesses greater flexibility in the deployment of their existing foreign workers across job duties within the same firm, to boost efficiency and productivity. A pilot run will be carried out later this year for the Hotel industry.

    Extension of Maximum Period of Employment of Work Permit Holders (WPHs)
  4. The current maximum POE for unskilled WPHs from NTS and PRC is 6 years. There has been feedback from many companies, especially those in the Construction sector, for the POE of unskilled workers to be extended to help businesses retain their trained, experienced, and, therefore, more productive WPHs for longer periods. MOM will extend the maximum POE of these workers’ WPHs to 10 years. (Please refer to the Annex for a table to illustrate the change.)
  5. The extension of the maximum POE for unskilled WPHs from NTS and PRC will not lead to an increase in WPHs in Singapore as businesses are still required to keep within their sectoral DRCs. This measure does not impact WPHs from Malaysia, North Asian Sources and foreign domestic workers as they do not face a POE restriction and can work up to age 60.

    Greater Flexibility in Deployment of Work Permit Holders to different job functions within the same firm in Specific Industries
  6. Previously, MOM has been strict on the occupational roles of foreign workers i.e. deployment to a different job functions within a firm is prohibited. In our dialogues with the industry, business chambers and associations, there have been requests to allow more flexibility for this. Sectors, such as the hotel and F&B industries, could utilise their staff for other functions when they have the capacity to do so, which would translate to a meaningful boost in efficiency.
  7. MOM will consider allowing this, starting with a pilot run to relax the occupational restrictions in the hotel sector. If successful, this could be later extended to other Services industries. MOM will be working closely with our tripartite partners to set the criteria and conditions for this pilot and aims to implement this programme by the second half of this year.

1 Dependency Ratio Ceiling (DRC) refers to the maximum permitted ratio of FWs to the total workforce that a company in the stipulated sector is allowed to hire.

2 MP Ang Wei Neng and MP Tin Pei Ling suggested allowing companies to keep experienced foreign workers who have been trained for longer periods, as long as the company is still within its DRC. A second area of flexibility that has been raised is in the deployment of foreign workers across job duties within the same firm.

3 NTS include Bangladesh, India, Republic of the Union of Myanmar, Philippines, Sri Lanka and Thailand.

Annex - Revised maximum employment periods for WPHs
FAQs on Extension of Maximum POE