x Abu Dhabi, UAESunday 23 July 2017

An enforcement solution for labour abuses

The Ministry of Labour showed the seriousness of its effort to the thousands of medium-sized and small construction companies by inspecting large companies first.

Padankanti Janardhanan, an Indian construction worker in Sharjah, has not been paid for three months. "I just want my passport back and want to go home," he said. The situation of Mr Janardhanan and others like him is tragic, but likely to improve. As we reported yesterday, 800 of the largest blue-collar employers in the UAE who have not singed up to an electronic and verifiable wage protection system (WPS) have been penalised by the Ministry of Labour. Until they adopt this system, they will not be permitted to hire new workers.
Companies that pay their employees in cash - and with little or no book-keeping - make it nearly impossible for the Ministry of Labour to audit their finances. Cash payment systems also leave too much room for companies, whether they are cash-strapped or simply greedy, to cheat their employees for their own benefit. Automatic and electronic payment makes this far less likely to occur. Only companies that employ more than 100 blue collar workers in the UAE were included in the Ministry of Labour's first round of inspections, nearly 20 per cent of which were found to be in default of the law. While, prohibiting companies from hiring provides less of a disincentive to abuse the law today than it would have during the boom, there is high turnover in the construction industry. Hiring is a constant process. For companies that do not abide by the law, a prohibition against employing new workers should serve as a considerable competitive disadvantage.
The Ministry of Labour showed the seriousness of its effort to the thousands of medium-sized and small construction companies by inspecting large companies first. The sheer number of larger companies penalised should serve as added impetus for many smaller companies to abide by the law if they have not already done so. While conditions for labourers have improved markedly in recent years, there is still much work that remains. The success of WPS underscores that the solution to certain violations is often as simple as closing obvious loopholes. However, the globalisation and complexity of the labour market requires a global approach to prevent abuse. The application of WPS addresses many instances of abuse that occur where there is a demand for labour. Many other abuses, however, including the charging of labourers exorbitant recruitment and transport fees to come to the UAE, occur where labour is supplied. This will require not just the resolve of the UAE at home, but also co-operation between itself and many other nations to fashion stronger bilateral agreements, combating the abuse of migrant labour.