The construction industry is one of the largest employers in Qatar, with the Ministry of Development Planning and Statistics reporting that sector employment stood at 547,504 in 2013, spread across 2483 registered construction businesses. Of these, 93.6%, or 512,430, were employed at 928 companies with more than 50 employees, while 35,074 were employed at one of 1555 companies with fewer than 10 employees.
An estimated 88% of Qatar’s working population, which stood at 1.2m in November 2014, is composed of expatriates, most of whom are employed in construction and industry, and come from Asian countries including India, Pakistan, the Philippines, Thailand, China and Nepal. This number is expected to rise significantly in the coming years, with Al Arabiya reporting in 2012 that the state will need to recruit an additional 1.5m workers in the lead-up to the 2022 FIFA World Cup.
The Ministry of Labour and Social Affairs (MLSA) is responsible for overseeing the recruitment of all non-domestic workers in Qatar, and labour practices in the sector are governed by Labour Law No. 4 of 2004, which is currently being amended as the government moves to implement a number of reforms to salary schemes and its kafala sponsorship system.
Many migrant labourers in Qatar send remittances from their salaries back to their families, and the IMF reported in May 2014 that remittances from expatriate workers in Qatar reached 6% of GDP in 2013, one of the highest shares in the world. The industry, therefore, represents an important lifeline for thousands of families who might otherwise be living in poverty, making Qatar an important conduit for funnelling money to low- and very-low-income households. Despite this, the state has faced increased international scrutiny of its labour practices as it continues building its infrastructure towards 2022, with authorities making steady progress on long-awaited labour reforms in 2014.
KAFALA: The kafala system ties migrant workers’ employment visas to their employers. Under the system, an employer assumes responsibility for a hired migrant worker. The scheme’s exit visa system prevents workers from leaving the country without their sponsor’s permission, and employer consent is also required to change jobs, get a driving licence, rent a home and open a bank account. Kafala is not unique to Qatar, and is also utilised in Lebanon, Saudi Arabia, Jordan, Iraq, Kuwait, Oman and the UAE.
The system has long faced accusations that it grants too much control of the worker to employers, leaving employees open to exploitation. In a November 2013 report, Amnesty International found that some employers also use methods that effectively trap workers in the state, including withholding wages, taking the worker’s passport or threatening employees. Indeed, one of the most common complaints among workers, according to Amnesty International and other human rights organisations, is that of late payments, with many workers waiting months or even years to receive their salaries.
REFORMS: The government has committed to improve conditions for its migrant labourers in the build-up to 2022, announcing plans to implement far-reaching labour reforms which will improve its work visa and salary payment schemes. Modern labour reforms began in 2013, when the government commissioned law firm DLA Piper to undertake an independent review of the legislative and enforcement framework of the state’s labour laws. The firm’s final report, published in May 2014, made recommendations including the adoption of a comprehensive set of welfare standards setting out the minimum mandatory requirements for all public contracting authority construction projects, blacklisting of unethical recruiters, the establishment of a worker complaints bureau, an electronic salary payment scheme and reforms to the kafala system.
In the same month, MLSA and Ministry of Interior (MoI) officials held a press conference where they unveiled plans to reform the current labour system, the first step of an expansive labour reform process.
At present, expatriate workers require a no-objection certificate from their employers before leaving the state or taking up a new position. Alternatively, they are required to leave the state for a minimum of two years before returning for a new job, although this has caused problems for contractors with heavy labour requirements, with some arguing that the two-year ban has significantly reduced the pool of available labour, exacerbating pre-existing labour shortages.
EXIT PERMITS: Under proposed new regulations, Qatar’s exit permit system, which has received heavy international criticism, will be replaced by an arrangement under which permission to leave is automatically granted after a three-day grace period, while kafala would be replaced with employment contracts.
New regulations stipulate that employees who sign a fixed-term contract would be free to transfer to a different employer at the end of their contract. Should the employment contract be open-ended, foreign workers would be permitted to change jobs freely after five years, while employers caught confiscating passports would face tougher penalties, with fines jumping from QR10,000 ($2740) to QR50,000 ($13,700). Companies will also be required to pay employees through direct bank transfers, although the MLSA has ruled out implementing a minimum wage as part of the reforms.
Progress has been steady so far. In July 2014 the Cabinet approved a draft law that would require employers to pay wages directly into an employee’s bank account. The Wage Protection Scheme is expected to drastically curb the problem of late payments. Workers hired on an annual or monthly basis will now be paid every month, while workers on an hourly rate will have wages paid at least every two weeks.
A timeline for the new system has not yet been announced, but authorities previously said it would be rolled out in three phases. The first phase will affect the largest companies, those with more than 500 employees. The requirement will then be extended to firms with 100-500 workers, while small and medium-sized enterprises with fewer than 100 employees are expected to be included in the final stage.
The new salary system, which will be handled by the Qatar Central Bank, and supported by the MoI and the MLSA, also makes it easier to track payments. The emir recently signed the new system into law, and every company and organisation in the state will be expected to comply. During 2014 the MLSA also shut down 50 construction sites for breaching labour laws, and raised the number of labour inspectors from 150 to 300.
RESPONSE: Despite reports that industry stakeholders initially worried that the laws would harm profitability, new regulations have since been welcomed by the industry, most importantly by Qatar Chamber of Commerce and Industry (QCCI), which announced in October 2014 that it would support the reforms.
In an interview with Arabic daily newspaper Al Arab, QCCI’s vice-chairman, Mohamed bin Ahmed Tawar Al Kuwari, said that the state’s business community welcomed the changes, and would be comfortable with reforms provided they protect both employees and business owners. The chamber’s approval cleared one of the final hurdles to the new law’s implementation.
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