x Abu Dhabi, UAETuesday 25 July 2017

UAE leads on path to worker sponsorship reform

Ministry of Labour undersecretary will outline at Kuwaiti workshop the steps the Emirates introduced this month as neighbour looks towards change of system

Asian workers such as this labourer from Rajasthan, in India, make up a large percentage of expatriate workers.
Asian workers such as this labourer from Rajasthan, in India, make up a large percentage of expatriate workers.

When an official from the UAE's Ministry of Labour stands up in Kuwait today he will represent one of just two GCC countries with experience of reforming its sponsorship system.

He has been invited along with labour officials from the rest of the bloc to help the Kuwaitis work out what to do with their system. They are committed to reform but have yet to map out in detail what will change.

Bahrain decided to end its kafeel (sponsorship) system in 2009 after pressure from the United Nations. During a presentation at the International Organisation for Migration workshop, the Emirati official will spell out the reforms the Emirates introduced this month, which took the country along a similar path.

The UAE abolished no-objection certificates (NOC), which prevented workers from moving jobs without their employer's consent. Workers who have been in a job for two years can now move with just a stamp from the ministry.

"The ministry today is concentrating on labour market policies," said Humaid al Suwaidi, the undersecretary at the ministry. "By the new cancellation of the NOC system it will help to protect employees, also achieved with the wages protection system."

Companies have also been assigned to one of five tiers intended to encourage them in good labour practices. Their initial classification depends on the diversity - and Emiratisation - of their workforce, with companies that breach workers' rights being given black points that can bump them down a category. The higher the category, the less they have to pay for their labour cards.

"We want a stable labour market, a productive labour market with Emirati involvement, a boosting economy, awarding firms and skilled workers," Mr al Suwaidi said.

"We do not want imaginary Emiratisation - that is why we placed the minimum wages for the top category. What kind of superman Emirati is the manager of 100 firms?"

Job contracts now bind employees for two years because the ministry realised that many people were missing out on end-of-service payments under the previous three-year term.

Fatima al Kirbi, an Emirati assistant professor in political science at UAE University, said the changes addressed two major concerns about the old system.

"The number of Asian workers in the country was really high, which in effect created a imbalance and a problem in the population structure, and also caused human rights worry," she said.

"The changes will definitely have a good impact on employees to defend their rights, and create a better picture than the one other countries have of us. They think we are misusing our workers, but the UAE is serious in taking steps to improve the current situation."

Paul Dyer, a specialist in labour issues at the Dubai School of Government, said eliminating the system altogether would be difficult, but could be worth it in the long run.

"While locally we are edging it down, Bahrain took more of a dramatic step," he said. "This is challenging though - there is a direct benefit for expats with more flexibility, able to ask for pay raises, promotions, but the price of hiring expats will increase."

He said Bahrain, unlike the UAE, had put its nationals on a par with expatriates - they now cost the same and are no harder to fire. That, he said, had made employers more likely to hire Bahrainis.

Here, he believed, the main concern was expatriates being hired too easily, with employers looking for quantity rather than quality.

"There are here engendered servants latched on to their employers, there was no real way to pressure employers," he said.

The private sector had tended to favour expatriates because they were cheaper to employ than Emiratis, he believed.

"Emiratis were hired only to keep with the quota system," he said. "There is a lot of reliance on low-skilled labour here. Firms will need to rethink this.

"In the long term, firms have to be efficient with the employees they have, careful with who they bring in to make good use of it. In this context, gradual reform is right."

Sweeping away the old system would risk "unforeseen repercussions", he said.

However, Mr al Suwaidi stressed that the reforms would benefit everyone, including employers.

"Employees cannot just leave whenever they want to," he said. "They still need to respect their contracts - they are the ones who signed for them.

"But if there was a breach of contract or employees are not getting their wages, meaning that the employer has committed a violation, the ministry needs to be informed and interfere to end the contract between them, and if the employee commits any violations they will suffer a year-long work ban.

"We want this year to be a year of a more stable labour market."