Friday, May 12, 2006

A crime against humanity

The UAE government makes it quite difficult for foreign workers to leave one employer in the UAE and seek alternative employment with another. This contractual constraint imposed by the government creates an environment where bad employers can (1) abuse their workers, and (2) spoil the reputation of employers as a whole, damaging the majority of firms who keep their commitments to their workers.

For low-wage workers especially the least-cost method of enforcing the contract you have with your employer is to have the option of leaving the employer and taking up work with another. Saying that workers have access to the courts is a vacuous assertion for a worker whose employer will not give him time off from work, who does not have the resources for something as minor as transport to the court, and who lacks the education to understand his or her rights and make arrangements to have his or her case heard.

My recommendation continues to be: give the workers and firms the right to enter into contracts where the worker can change jobs and the firm can replace workers by hiring them from other firms. If that recommendation is stillborn, then the UAE - if it wants to disarm critics who make the case that the UAE is complicit in the abuse of workers - must devote the resources to ensure employers keep their promises.

What does that mean? I think it means a government official has to be present with low-wage workers and witness whether they get paid, whether they are working beyond agreed upon hours, and whether the working conditions and employer-provided living conditions and transport to work are mutually agreed to. That's a lot of resources devoted to monitoring. It would be enormously costly. Allowing workers to change jobs is the low-cost alternative to costly government enforcement of contracts.

Here's the latest report of an employer failing to honor his or her commitments. It's representative of so many such reports. As usual, it is a clear cut story; failure to pay for several months and workers having no real alternative except to continue to work for that employer:
Sharjah: About 120 contracting labourers stopped work on Thursday in a demand for unpaid salaries, police sources told Gulf News.

The Asian labourers who work for Swaidan and Al Nile Contracting Company in Sharjah took to the streets at about 10am. The workers said that they have not been paid for four months and are owed between Dh400 to Dh600. The only solution for them was to stop work because they need the money to send to their families back home.
. . .
Police said they contacted the manager of the company, Mohammad Sulai-man, asking him to solve the problem immediately. The workers left after an assurance from police that they would be paid. The case will be referred tomorrow to the labour department.
Revealed preference suggests the UAE does not find the host of employer breach-of-contract cases embarrassing. Otherwise the problem would be solved by now. It is revealing, I think, what things some would find embarrassing that others do not.

Questions the article fails to address:

>>Will the firm be fined? Is the fine substantial enough to be salient?

>>Will the UAE make sure that this firm's behavior is made know to the villages where it is likely draw to workers in the future?

>>Will the workers be made whole? Paying them back wages is sufficient to make them whole -- what about the loans they probably had to take at terms that are typically much much worse than you and I can obtain.

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Blogger Keefieboy said...

You are quite correct in stating that the labour market should be made more free and that changing jobs should be made easier. The old argument that it costs employers money to bring workers here / give them training can be be dealt with by a repayment clause if you opt to leave within the first year or two.

There is an idea on the part of some employers that workers are expendable commodities. Lightbulb popped? Buy another one. Worker died of heat exhaustion? Buy another one.

The legal redresses for abused workers are and always have been completely ineffective for the victims. For example, if you file a case against a former employer, then you cannot work until the case is completed, nor can you leave the country. And these cases can take months or years to reach a conclusion. Whether this is by accident or design, I do not know (although I suspect the latter); whichever it is, it simply never works to the benefit of the worker.

11:06 PM  
Anonymous Mohamed Elzubeir said...

Neither does it work for the benefit of the employer. I want to be able to employ people in the market. It is quite difficult to do so.

The fees the government makes me pay to 'transfer' an employee from another firm are prohibitive.

The problem also is that because of these laws, firms tend to break the 'written' law. For instance, employers hold employee passports because it is the employer's responsibility to ensure that the employee has either left the country or was transferred to another sponsor. Why is this my responsibility as an employer? And most importantly, how do I fulfill such a responsibility?

Well, the only course of action would be to hold the employee captive by withholding passports.

To summarize, everything with labor and immigration needs to be completely rewritten. As it stands, it is one of the main if not _the_ main obstactle in the UAE's development.

11:40 PM  

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