Fair policies for hiring locals

GOVERNMENTS around the world must ensure citizens get a fair shot at landing jobs in the face of competition from foreign workers. As Singapore grapples with this delicate balancing act, a team of Straits Times correspondents examines how the authorities in Britain, Australia, Hong Kong, Taiwan, Thailand and Indonesia are dealing with this thorny issue.

The Straits Times, 18 Mar 2013

BRITAIN: Strict and complicated visa system
By Jonathan Eyal

LONDON - Britain operates one of the strictest foreign labour control regimes in the industrialised world.

The system has evolved progressively since 1973, and essentially treats the importation of labour as immigration: The unspoken assumption is that those who are admitted for work will eventually seek to settle permanently.

As a result, it is the UK Border Agency under the Home Office which processes all applications.

Since 2008, visas have been streamlined into five "tiers".

Those whom the British government regards as the "brightest and best" - usually internationally recognised scientists and academics, but also multi-millionaires - can apply at any time, and do not require an offer of employment in order to obtain a Tier 1 visa.

However, skilled workers who fall under Tier 2 of the immigration system and low-skilled workers who are classified under Tier 3 need an offer of employment before they can apply for a permit, while Tiers 4 and 5 are reserved for students and other special cases, and are not usually allowed to work.

For those in Tiers 2 and 3 - who represent the bulk of work visas - the procedure is dual key: The government sets yearly caps on total numbers, but each individual application is also assessed on its merits.

Employers seeking to hire foreign labour have to be pre- approved and registered with the Border Agency. As part of the registration - which must be renewed and paid for each year - employers get a cap on the total number of foreign workers they can apply for.

This, however, is no guarantee of approval.

In each case, the employer must prove that, despite making every reasonable effort, he has found no British or European Union citizen willing to fill the required job, and that the importation of a foreign worker is the only possible course.

An employer must therefore advertise the job in a prominent position in a relevant local or national newspaper or a website where the ad can be kept for at least a week, then interview a minimum number of applicants, and keep the records of these applications - in order to provide the necessary explanation as to why no local candidates were regarded as suitable.

It is up to the immigration officer to decide whether all this amounts to a genuine effort to employ local people.

Old gimmicks to get around this, such as deliberately crafting job descriptions so that only foreign workers can ever qualify (for instance, a requirement to speak an unusual Chinese dialect in order to work as a waiter in a restaurant), lead to rejections. So do jobs which offer less than the minimum wage, which currently stands at £6.19 (S$12) per hour.

There are, however, some loopholes. Post-graduate students from British universities can get preferential visa treatment, although this provision is now being eliminated. And multinational companies headquartered in Britain can transfer their workers from other countries, although this has to be on a temporary basis and is subjected to separate caps.

The system is widely criticised for its complexity and unpredictability: Since it takes months to process a visa application, employers have no idea when they can fill their requirements.

The process is also very expensive: A minimum fee of S$1,000 is levied on a Tier 2 application, but some employers can pay five times that amount if they use immigration lawyers.

Yet the biggest criticism comes from the British public, which believes that the system still fails to keep out foreign workers.

And for good reasons, for the visa regime does not apply to the citizens of the EU's other 26 member-states, who are free to come and work as they wish.

AUSTRALIA: Foreign workers' pay pegged to market rates
By Jonathan Pearlman

SYDNEY - Australia has a varied arsenal of weapons to protect the interests of local job applicants against foreign competition.

First, the government requires that foreign workers on temporary, short-term visas are paid proper market rates, in part to make them less appealing to employers hoping to avoid paying more for locals.

The employer must be able to explain how the worker's salary has been determined, including details of wages paid by the employer to foreign and local workers. For temporary visa workers, there is also a minimum annual salary of A$51,400 (S$66,800).

Second, employers must show that they are committed to training Australian workers and are not simply hiring foreign workers to avoid having to train local employees.

To meet this requirement, businesses must either pay a sum equivalent to 2 per cent of the total wages of all their employees to an industry training fund, or spend 1 per cent of the total wages on specific training for their employees.

These salary and training requirements were introduced by the government in 2009 amid concerns that employers were turning to foreign workers on temporary visas to avoid hiring locals on higher salaries.

Former immigration minister Chris Bowen told ABC television last year: "Market rates must be paid and there are other costs for bringing in overseas workers… which means that employers will always look very closely at trying to get domestic labour before they look offshore."

Third, the government has also sought to protect locals by ensuring that most work visas are granted only to people who have skills which are required in Australia.

The government maintains a list of skilled occupations which is updated annually. The current list, set by an independent body, features about 200 occupations including architects, construction project managers, engineers, lawyers, carpenters and a wide range of medical and nursing jobs.

The president of the Migration Institute of Australia, Ms Angela Chan, said the requirements for sponsoring foreigners were "very tough" and were designed to compel employers to try to hire locals.

She cited the need for employers to justify the salaries of workers and to demonstrate that the worker was required to fill an in-demand occupation, in addition to paying A$505 in fees.

Even though employers are generally not required to specifically show that they have advertised for local applicants, "it takes a real commitment by an employer to want to sponsor someone from overseas", she told The Straits Times.

Australia's largest group of skilled migrants are those on permanent visas. About 129,250 permanent visas will be granted this year, up from 125,850 in 2011-2012.

But the group that tends to attract controversy for taking away jobs from locals comprises foreigners on temporary work visas. Their numbers are uncapped and fluctuate according to demand. About 127,000 people received temporary visas last year.

For these temporary migrants, who are allowed to stay for between three months and four years, sponsoring businesses are legally required to declare that they have "a strong record of, or a demonstrated commitment to… employing local labour".

Despite the safeguards, employers have been known to cheat by misleading the authorities about the types of jobs they are filling or underpaying their workers.

Hong Kong: Three hurdles when hiring non-professionals
By Li Xueying

HONG KONG - Employers here who want to hire foreigners for jobs such as nursing home caregivers and mechanics have to jump through three hoops.

First, they have to embark on a mandatory four-week recruitment period within Hong Kong.

During the first two weeks, employers looking to fill these "technician-level or below" positions have to advertise the vacancies at least once a week in two local newspapers. They must offer wages no less than the industry's prevailing median level.

Second, the government's Labour Department will concurrently try to match the vacancy with local job-seekers. And if necessary, employers have to organise tailor-made training programmes for local workers, with the assistance of the government's Employees Retraining Board.

The last hurdle comes at the end of the exercise, when employers have to provide the Labour Department with information on their recruitment efforts. If no local workers are found at this point, the firm can apply to bring in foreigners. The application will be considered first by the Labour Advisory Board and then approved by the Labour Department.

Called the Supplementary Labour Scheme (SLS), this process was put in place in 1996 when Hong Kong was facing a labour crunch and needed to bring in foreign workers. The idea was that by regulating the inflow, the job prospects and wage levels of local workers would be protected.

A worker admitted under the SLS can work in Hong Kong for a maximum of 24 months under each employment contract. As of the end of last year, there were 2,415 workers under the scheme.

Employers who want to hire foreigners to fill professional-level jobs apply under a separate, and less stringent, General Employment Scheme (GES), administered by the Immigration Department.

The more liberal regime - there is no mandated local recruitment period, for instance - has led to problems. In one case in 2011, unions complained some firms were circumventing the SLS by applying under the GES. An example cited was the Hong Kong Aircraft Engineering Company, which stopped applying to bring in mechanics under the SLS, but tried to do so for "aircraft-maintenance licensed technicians" under the GES instead. Critics said the nature of the jobs was the same.

The government has since sought to have both departments work more closely on permit approvals.

TAIWAN: Few foreigners
By Lee Seok Hwai

TAIPEI - "Locals over foreigners" is written into the law when it comes to working in Taiwan.

Article 42 of the Employment Services Act, which took effect in 1992, says "no employment of foreign workers may jeopardise nationals' opportunity in employment, their employment terms, economic development or social stability".

In practice, that means only companies which have an annual revenue of at least NT$10 million (S$420,000) are eligible to recruit white-collar foreign workers, and those workers must have at least a bachelor's degree and two years of relevant experience. They should also be paid no less than NT$47,971 a month.

Certain specialised jobs, such as industrial researchers and science park engineers, are exempted from some of the requirements.

The rules have been in force with few changes since January 2004.

As of the end of January this year, Taiwan had some 27,000 foreigners employed as professionals or technical workers. Of this number, 8,000 were English language teachers. Foreigners comprise just 0.25 per cent of the total workforce of 10.9 million.

Critics such as Acer founder Stan Shih say the barriers hurt Taiwan in the hunt for talent. But others argue that the bar is not high enough as the average wage among Taiwanese professional and technical workers is now NT$52,000, higher than the minimum level stipulated for foreigners.

THAILAND: Barriers to entry
By Tan Hui Yee

BANGKOK - On paper, skilled foreigners wanting to work in Thailand face a long list of restrictions.

A 1973 decree, which has been amended several times, forbids foreigners from working in 39 fields, including hair cutting and shoemaking. Neither can a foreigner be a tour guide or a lawyer.

In other areas, such as medicine, where the hiring of foreigners is not expressively prohibited, the licensing procedure often acts as a natural barrier. Prospective doctors from foreign countries have to take a licensing examination in the Thai language in order to practise in the country.

Meanwhile, any company wanting to hire a foreigner for a skilled position needs to have in its employ at least four Thai nationals, and at least two million baht (S$84,500) in paid-up capital.

To get a work permit and visa for a foreign employee, companies have to show that the foreigner is needed for the job through the submission of documents on his background and educational and professional qualifications.

All of this requires "a small mountain of documents", says Mr Stephen Frost, a director of law firm Bangkok International Associates.

But there is also a certain degree of discretion by the authorities, provided the employer is bona fide and the employee has a good background.

Foreign lawyers, for example, may be able to work in Thai law firms as consultants.

As of June last year, there were 83,000 skilled foreigners with work permits in Thailand. There is no great pressure to encourage companies here to opt for locals first as they are usually paid less than foreigners and have no problems speaking Thai.

INDONESIA: New rules issued
By Zakir Hussain

JAKARTA - Indonesia's manpower laws restrict foreign white-collar workers to specific sectors and require their work permits to be renewed annually. The sectors include entertainment, sports, aviation, construction supervision and education.

In the approval letters for foreign employees, the ministry tells employers they must ensure that Indonesians work alongside the foreigners and receive the training needed to eventually take over the job.

Last year, amid concern over the growing presence of foreign executives, the manpower ministry issued new regulations explicitly barring foreigners from 19 positions at local companies, mostly involving hiring and training.

"If all mid-level positions are filled by foreigners, there will be envy", which would be bad for the companies, said Manpower Minister Muhaimin Iskandar then.

These restrictions do not apply to foreign-owned companies, and are not retroactive.

There is no published restriction on how many foreign workers a company may take on, whether in absolute numbers or as a proportion of local staff.

Immigration figures show that there were 55,000 foreigners in the country on working visas in 2011, up from 49,000 in 2010.

They were mostly employed in manufacturing, trade, construction and mining.

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