To avoid abuse, foreign worker flexibility is for companies ‘aligned with Singapore’s goals’: Tan See Leng

COMPANIES eligible for a new scheme that provides foreign labour flexibility have already worked closely with Singapore’s economic agencies and would be aligned with the country’s economic goals, said Second Minister for Trade and Industry Tan See Leng, responding to concerns about potential abuses of such flexibility.

The Manpower for Strategic Economic Priorities (M-SEP) scheme has two conditions. The first is that companies must participate in programmes or activities in line with key priorities: investments which support Singapore’s hub strategy; innovation; or internationalisation.

That narrows the eligibility pool to only about 1,000 firms, representing less than 1 per cent of all registered businesses here, said Dr Tan in Parliament on Monday (Jan 9).

“Because this scheme has been designed to be highly selective at the firm-level, there is no need to stipulate further criteria on the specific deployment of each additional worker hired under M-SEP scheme. Such micro-management would not be helpful for the firms,“ said Dr Tan, who is also Manpower Minister.

He was responding to Members of Parliament Liang Eng Hwa (Bukit Panjang SMC) and Patrick Tay (Pioneer SMC), who asked how the government will guard against abuse of the additional work passes issued under the scheme.

M-SEP was announced in March last year and launched in December. It allows qualifying firms to temporarily hire S Pass and work permit holders above the prevailing dependency ratio ceilings, or the maximum share of foreign workers in a firm’s total workforce, for a limited time period. Apart from participation in relevant schemes or activities, firms must commit to hiring and/or training locals.

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While some MPs were concerned about potential abuse, others asked if the scheme can be expanded.

Responding to questions about firm eligibility, Dr Tan said that small and medium-sized companies can qualify as long as they participate in relevant programmes or successfully raise funds from recognised investment firms. As for outsourced service providers, M-SEP will not be extended to them based on their client list alone; such service providers will themselves need to take part in relevant schemes to qualify, he added.

Asked by MP Edward Chia (Holland–Bukit Timah GRC) if the scheme can be further expanded, Dr Tan said it is still at “a very early stage”. While the ministry is “not averse” to rolling it out to more firms that fit the overarching objectives, the plan for now is to depend on the in-depth knowledge that the agencies have of the companies involved.

As for firms which provide essential services, such as healthcare and cleaning of public housing estates, there are other measures to ensure that they have access to foreign manpower for essential functions, said Dr Tan.

Workers’ Party MP Gerald Giam (Aljunied GRC) asked what signal the M-SEP scheme sends to companies about their commitment to reduce dependence on low- and mid-skilled foreign workers, and if it will affect their incentives to increase productivity through automation and develop a Singaporean core.

“To reduce reliance on large numbers of low- and mid-skilled foreign workers, and continue in their automation journeys, firms will need to pivot and transform,” said Dr Tan. “Even if a company uses additional foreign workers to transform initially, these flexibilities are time-limited and will cease after the support period.”

He also stressed that firms will have to meet the second condition through hiring or training commitments. In addition, all M-SEP firms will need to minimally maintain their local workforce share during the support period.

As for the number of additional S Passes and work permits to be issued, Dr Tan said it will depend on the take-up of M-SEP. While there are around 1,000 firms that are eligible under the first condition, not all may require M-SEP support, he said.

“On the other hand, the greater the take-up rate, the greater the eventual number of locals who will be hired or trained. We will monitor the take-up closely and review the scheme accordingly.”