Human bodyshopping - Khaleej Times Online
---QUOTE---
The initial investigations of the ministry showed that two prominent contracting companies were involved in the bodyshopping of Egyptian workforce, said an official source at the Ministry of Labour and Social Affairs yesterday.
...
The issue was brought to light following a complaint, which KT exclusively reported earlier, concerning 12 Egyptian labourers protesting against unpaid salaries for the past four to six months.
The labourers also complained that an amount of Dh3,500 has been collected from each of them as an assurance against absconding.
"Initial investigations showed that another company is also involved. It seems that it is a coalition of some contracting companies that are engaged in human trafficking," said the official.
---UNQUOTE---
Meanwhile, it is difficult to prevent Emiratis from receiving training from one company and then going to another company for a higher wage. Why? Firms are under pressure to hire Emiratis, at wages that Emiratis will accept; it is difficult under these circumstances to design compensation with a low starting wage in order to have the employee pay for training (general human captital).
Promises of higher future wages also have less than the usual incentive effect of tying the national employee to the firm. Why? Because Emiratis in private sector jobs are likely to switch to the public sector when they have the chance. Also, it appears likely that more Emiratis drop out of the labor force early relative to the foreign workers here. Why? One reason is that the foreign labor which is predominantly male. Males don't bear children.
These consequences increase the reluctance of firms to hire Emiratis. A way for an Emirati to ensure the firm he or she will stay is to make a contract not to leave for X years, as they can do when the join the UAE Air Force. (The Air Force is public sector but training a pilot is very expensive, so the Air Force insists on a binding contract.) The trouble is that contracts like this a not enforceable in the private sector.
Foreign workers can, in effect, make such commitments. It may be illegal for them to post a bond (as these Egyptians workers did), but it is not illegal for the firm to set aside some of the workers earnings to be paid only at the end of the contract. Further, to change jobs within the UAE, foreign workers need a nonobjection letter from their sponsoring employer.
---QUOTE---
The initial investigations of the ministry showed that two prominent contracting companies were involved in the bodyshopping of Egyptian workforce, said an official source at the Ministry of Labour and Social Affairs yesterday.
...
The issue was brought to light following a complaint, which KT exclusively reported earlier, concerning 12 Egyptian labourers protesting against unpaid salaries for the past four to six months.
The labourers also complained that an amount of Dh3,500 has been collected from each of them as an assurance against absconding.
"Initial investigations showed that another company is also involved. It seems that it is a coalition of some contracting companies that are engaged in human trafficking," said the official.
---UNQUOTE---
Meanwhile, it is difficult to prevent Emiratis from receiving training from one company and then going to another company for a higher wage. Why? Firms are under pressure to hire Emiratis, at wages that Emiratis will accept; it is difficult under these circumstances to design compensation with a low starting wage in order to have the employee pay for training (general human captital).
Promises of higher future wages also have less than the usual incentive effect of tying the national employee to the firm. Why? Because Emiratis in private sector jobs are likely to switch to the public sector when they have the chance. Also, it appears likely that more Emiratis drop out of the labor force early relative to the foreign workers here. Why? One reason is that the foreign labor which is predominantly male. Males don't bear children.
These consequences increase the reluctance of firms to hire Emiratis. A way for an Emirati to ensure the firm he or she will stay is to make a contract not to leave for X years, as they can do when the join the UAE Air Force. (The Air Force is public sector but training a pilot is very expensive, so the Air Force insists on a binding contract.) The trouble is that contracts like this a not enforceable in the private sector.
Foreign workers can, in effect, make such commitments. It may be illegal for them to post a bond (as these Egyptians workers did), but it is not illegal for the firm to set aside some of the workers earnings to be paid only at the end of the contract. Further, to change jobs within the UAE, foreign workers need a nonobjection letter from their sponsoring employer.
posted by John B. Chilton at 4/13/2005 05:10:00 PM
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