Thursday 19 September 2013

Singaporeans first - Whither labour market testing in S'pore?

By Patrick Tay, Published The Straits Times, 18 Sep 2013

PROFESSIONALS, managers and executives (PMEs) now form about a third of the Singapore workforce. The number is expected to grow exponentially as the educational level of the general population rises.

In the course of my work, I have met many PMEs as well as union members and leaders. One of their topmost concerns is the excessive number of foreign PMEs in the country.

A well-qualified information technology professional working in a large financial institution once explained to me how he lost his job after being told that his position had been made redundant. He subsequently found out from former colleagues that his boss (an expatriate) had hired a foreign PME (with an expatriate package) to fill his position.

In August 2011, I expressed concern about hiring malpractices involving foreign PMEs. I suggested that Labour Market Testing (LMT) be implemented.

LMT essentially obliges employers who want to recruit foreign PMEs to show that they have exhausted all local sources before they are given permission to employ foreign PMEs. LMT is not a new concept. It is required in many jurisdictions such as Hong Kong, Australia, New Zealand, Sweden, Germany, Britain, the United States and Canada.

As there was no word from the Government, I was pleasantly surprised when Deputy Prime Minister Tharman Shanmugaratnam in his Budget speech this year announced that the "Ministry of Manpower (MOM) will put in place a framework to ensure that firms give fair consideration to Singaporeans in their hiring practices".

Acting Manpower Minister Tan Chuan-Jin announced in Parliament last month that more details on the framework would be fleshed out in the coming months.

Why LMT?

THE need for LMT stems from a growing concern that employers are not giving Singaporeans due consideration and are sometimes preferring foreigners. Anecdotal evidence suggests that the problem is particularly acute for mature PMEs above 40 years. These are the ones who have the most difficulty finding work when they are displaced.

I think that for LMT to work, it has to encompass several key principles and features.
- Fair consideration of locals and advertising requirements
LMT should focus on PME jobs - those for which employers want to hire Employment Pass (EP) holders. Currently, there is no ceiling for this group of workers.

Before employers are allowed to hire any foreign PME (EP holder) to fill a position, they should be obliged to advertise the vacancy so as to give Singaporeans time to apply for it. An interval of between seven and 28 days would be long enough.

The advertisements should also set out as much information as possible about the job opening. In addition, companies must exercise due diligence, keep records, and explain the grounds for rejecting locals after they have applied.
- Transparency of advertisement/ national jobs bank
To ensure transparency, such advertisements could be placed in a National Jobs Bank that is easily accessible to the public. Since the Singapore Workforce Development Agency (WDA) and NTUC's e2i (Employment and Employability Institute) are the nationally funded agencies providing job-matching and career services, they are the natural choice for this database.

Placing all the PME job ads there will allow WDA and e2i to better understand the PME job market and identify skill shortages and industry demands. This will also help ensure that national continuing education and training programmes and initiatives are well targeted.
- Efficiency
As in many other jurisdictions, there will need to be some exemptions. This will ensure LMT achieves its goal while not being excessively onerous on companies.

For example, micro-SMEs may be exempted from LMT requirements. In the same vein, certain countries such as Britain have used a salary limit, above which they are exempted.
- Efficacy and enforcement
An additional level of checks will need to be built into the rules to enable the authorities to investigate complaints. Where employers are found to pay lip service to LMT or treat it as mere window dressing, the authorities should be given the means to ensure that locals are treated fairly.

Industry regulators such as the Monetary Authority of Singapore and Infocomm Development Authority could play an important supportive role here in identifying recalcitrant companies.

Based on anecdotal evidence, banking and finance as well as IT and communications will require special attention. These are industries where perceptions are greatest that locals are not given their full due. It therefore is crucial that official enforcement efforts be directed towards these two industries.

After all these measures are put in place, companies that still have a large proportion of foreign PMEs should be flagged and examined thoroughly.

Finally, the penalties imposed should also be sufficiently high to have a deterrent effect.

When LMT? Looking ahead

MANY are eagerly looking forward to the MOM's announcement. Hopefully, there will be greater transparency as well as more opportunities for local PMEs.

It will also be a strong signal to Singaporeans of the Government's determination to develop a Singaporean core. In this way, we will allow in foreign PMEs who complement rather than undercut the skills of the local workforce.

LMT may not be a panacea for all local PMEs, but it is a very positive start.

The aim will be to deliver a light touch on the majority of companies, which already have good hiring practices, while placing a heavy hand on the recalcitrant minority.

The writer is the director of the labour movement NTUC's PME (Professionals, Managers and Executives) Unit and Legal Services Department, and a People's Action Party MP for Nee Soon GRC.

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