ILO wants parity between local and expat workforce - Khaleej Times Online

ABU DHABI — The International Labour Organisation (ILO) has called upon the UAE government to ensure equality between the national and expatriate labour force in the country.

"Equality at work simply means equal pay for equal jobs. Any discrimination in this regard is not tolerated at the international level. These are issues that the country will have to deal with," Dr Taleb Rifai, ILO Regional Director, told Khaleej Times in an exclusive interview yesterday.

"Any difference in privileges, pay and treatment between a national and a foreigner holding similar jobs would automatically be deemed as a violation of international laws," Dr Rifai, who is visiting the country on the invitation of Dr Ali bin Abdullah Al Kaabi, Minister of Labour and Social Affairs, said.
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He said he had been told by many authorities concerned he met here that at times, the privileges are not related to pay, but relate more to pension fund and insurance. "Our mandate is to ensure that when a worker goes to any country, he or she is fully respected and his or her rights are observed as equal to any other right at work," he said.

Note that the pension and insurance for nationals are government provided even if the national is employed in the private sector. It seems to be implied that government's subsidizing their own citizens is acceptable to the ILO. Another prominent subsidy is that the government pays employers to provide training to national employees.

What is more difficult to detect are differences is privileges and treatment. One hears plenty of stories that nationals and nonnationals receive different treatment with respect to hours of work, absenteeism, and termination.

Segregation seems, from this article, to be okay by the ILO:

Stating that the issue of foreign workers and their rights has always been the concern of both UAE as well as ILO officials, he said: "I am not sure if equality is absent, to be fair and objective. What is happening is that there are certain categories of work which have become the domain of foreign workers while the nationals find other categories attractive."

But is it discrimination by segregation? Or is the segregation merely the voluntary self-selection of workers into occupations? If it is the former shouldn't the ILO be equally concerned?

The ILO man remarks about the differences in foreign labor mobility in the UAE in comparison to the US and Europe:

Replying to a question on free movement of labourers in the country, the ILO official said the UAE had limitations on the intake of foreign labourers, noting that the movement was determined by actual needs of the country for development. "There is restricted movement and less flexibility in the local market. I would say it is easy and not complicated for a foreign worker to come to the UAE, but it is difficult for the worker to move from one job to another."

He observed that this was not the case with several other countries in Europe and North America, where it was far more complicated to enter the country, but once in the country, the worker enjoys higher degree of flexibility to move from one job to another. "The advantages of having free movement of labourers within the region are many, less problematic and helpful in striking a balance between supply and demand."

His synopsis of job mobility rules conforms to the description I have given in prior posts on the UAE labor market.

If the ILO gets all these things on its equal-treatment wish list what would happen?
o Firms would be even more reluctant to hire nationals at all, for once they hired one it would have to treat all workers in that job category the same.
o If firms were compelled to hire Emiratis in an occupation, and treat all workers the same, the firms would have no reason to favor one nationality over another: the workers would be homogenous and the firm would be indifferent as to percentage that are Emirati (I'm imagining that the quality of the workers is the same, they are subject to the contract conditions, and - again because of the ILO wish list - they have the same employment opportunities outside the firm.)
o We can expect that firms would react by making new job categories so as to create all-foreign job categories. And, similarly, move work from inside the firm to outside the firm: outsourcing.

Regarding worker-employer disputes:

On the increasing labour disputes in the country, Dr Rifai advised that with the growing number of labourers in the UAE, it would do well to have legal and judiciary systems with sufficient teeth to settle contractual and legal complications in a clear manner.
He also underlined that the status of the worker coming to the country was a critical factor, which influenced and promoted inequality. Unorganised or illegal labour market creates an opportunity for employers to take advantages like lower pays and denying workers their dues.
On the immigration policy in the country, he said: "The larger the segment of illegal workers, the larger the problem becomes. That is when more serious violations take place, in the absence of any documents," he said.
He said ILO was trying to help the government regulate the labour market and introduce systems to reduce the unorganised labour market.

What appears to be true is that in the UAE is that if an employer violates the contracts it has with low income workers those workers face tremendous difficulty enforcing the contract. Some firms do behave opportunistically. One reason there is scope for opportunism at all is this fact, stated earlier, that workers do not have the option of changing employers.

Take the example of the firm which stops paying its low income workers. The workers don't have the means to return to their home country for work, and they can't sell their services to other employers. The worker probably lacks the knowledge of what government authority to contact to seek enforcement of the contract let along the means of transport to reach the authorities. The goverment may not have clearly defined what assistance it provides in labor disputes. Often the workers' best means of expressing their claims is to refuse to work.

Thus, for example, when a major cleaning outsourcer's workers went on strike for back wages of several months, they put pressure on the company's customers to push the company to pay up.

Give workers the exit option - that is, remove the government rule against changing employers - and disputes would decrease because the scope for employer opportunism would diminish to something closer to European levels.