Taking the lead: Regulatory changes improve labour protections

Migrant labour has played a key role in the development and diversification of Gulf economies in recent decades, and Qatar is no exception. The population of the six GCC members in 1970 was 7.8m. Aided by the oil boom that began in that decade, the population started to rise, fuelled by the migration of both skilled and non-skilled workers required to develop hydrocarbons resources, staff construction projects and work in fast-growing service industries catering to the swelling population. By early 2022 the population of the GCC exceeded 54m, reflecting the opportunities in the region.

Migrant Workforce

For many individuals in the developing world, the GCC continues to offer a chance to save in a stable currency and transfer money home to support their families. According to the UN’s International Labour Organisation (ILO), in recent years the GCC has hosted approximately 10% of all migrants around the world, with Saudi Arabia and the UAE accounting for the third- and fifth-largest migrant populations, respectively.

Qatar is one of four GCC countries – along with Bahrain, the UAE and Kuwait – where the migrant population accounts for more than 80% of the total population. While there are many positive aspects to this demographic makeup, the proliferation of migrant labour has also given rise to some concerns about the treatment of low-wage and unskilled workers. In response, Qatar has taken the lead among countries in the GCC as it implements regulations that strengthen the rights and protections of migrant and other workers.

Tournament Influx

After Qatar was selected to be host of the 2022 FIFA World Cup in 2010, an infrastructure drive already under way accelerated. Alongside the need to renovate an existing stadium and construct seven new facilities ahead of the tournament, Qatar also had to ensure sufficient hotel capacity, as well as internal and external transport connectivity to accommodate the estimated 1m visitors during the competition. To put this figure in context, the number of international visitors in December 2019 was 275,000, the highest monthly total since early 2018.

The acceleration of large-scale infrastructure development created rising demand for migrant construction workers to help the projects be delivered on schedule and on budget. This had an impact on the population, which rose from 1.7m in 2009 to 2.7m in 2016, before the growth rate began to slow as some major projects neared completion and the economic blockade imposed by some neighbouring countries began in mid-2017. In 2016 the three largest contingents of foreign residents in the country were from India, Nepal and Bangladesh. Although the Planning and Statistics Authority (PSA) does not publish data related to the nationalities of residents, independent studies estimated that these three nationalities constituted almost 50% of the resident population in the 2015-16 period. Figures from the PSA and other sources have consistently shown that over 40% of migrant workers in Qatar have been employed by the construction sector in the run-up to the 2022 FIFA World Cup.

A 2014 report from Qatar Foundation (QF) examined how migrant workers were recruited from their home countries and what conditions they experienced once they began their work contracts in Qatar. It found that one of the most significant problems faced by migrant workers in the recruitment process was demands for illegal payments of between $600 and $5000 from unscrupulous recruitment agents in their home countries in order to obtain a work visa, which often leads to long-term debt that can only be paid off through work. Once they began work, all migrants interviewed as part of the study said they had surrendered their passports to employers, sometimes against their wishes, in contravention of the law. It was also apparent from interviews that not all workers were fully informed of their working and living conditions prior to arrival.

QF’s report included a number of recommendations on how migrant workers’ rights could be better protected throughout the chain of recruitment and employment. Among other things, the recommendations focused on better government-to-government collaboration between countries; the banning of recruitment fees paid by workers to agents; higher ethical standards for recruitment agents and labour supply companies; the standardisation of contracts, wages and allowances; and the strengthening of legal rights for workers to transfer jobs or leave the country. These studies, as well as global attention in the years leading up to the 2022 FIFA World Cup, helped pave the way for wide-ranging reforms related to the rights of migrant workers.

Pioneering Reforms

The year 2020 proved to be a landmark for labour market reforms in Qatar, with the passage of several laws that go farther than any GCC country has gone before in protecting the rights of migrant workers. In August of that year Law No. 17 of 2020 introduced a minimum basic monthly salary of QR1000 ($274) for all workers in the private sector outside Qatar Financial Centre, which operates under its own legal code. In addition to a minimum salary, the law stipulates that employers must pay a minimum monthly allowance of QR500 ($137) for accommodation and QR300 ($82.34) for food if adequate food and accommodation are not already supplied by the employer directly. Prior to the introduction of the law, there were no legal minimum wage requirements in Qatar.

Following the introduction of a minimum wage and allowances, Law No. 18 of 2020 removed the need for workers to obtain a no-objection certificate (NOC) from their employer before changing jobs. Prior to the implementation of this law, workers could not take up an offer of alternative employment without permission from their current employer, which left them open to exploitation and acted as a curb on dynamism in the labour market. Migrant workers are still required to comply with the terms of their employment and serve minimum notice terms.

The removal of the NOC built on previous reforms in 2018 and early 2020 that revoked the need for most migrant workers to obtain permission from their employers to leave the country. According to the ILO, “The removal of exit permit requirements, coupled with the ending of the requirement for migrant workers to obtain their employer’s permission to change jobs, effectively dismantles the kafala sponsorship system and marks the beginning of a new era for the Qatari labour market.” The kafala system of employer sponsorship of migrant workers is still widely maintained in other GCC countries, and has been the target of international concern due to its potential for abuse. According to government estimates, Law No. 18 of 2020 contributed to some 78,000 job transfers in the final quarter of that year. Meanwhile, more than 5000 private companies updated their payroll systems to adhere to the new minimum wage regulations by the time Law No. 17 of 2020 entered into force in March of the following year. The ILO estimated some 400,000 workers – or 20% of the private workforce – would benefit from the new minimum wage protections.

Beyond these legal reforms, the authorities have been engaging with contractors to repay illegal recruitment fees charged by agencies to overseas workers – a problem highlighted by QF in 2014. According to government data, 266 contractors had voluntarily agreed to repay QR104m (. (sienagolfclub.com) 5m) to workers by 2022. As of March of that year more than QR83m ($22.8m) had been reimbursed. Elsewhere, Ali bin Samikh Al Marri, the minister of labour, told international press in December 2021 that 338 businesses had their operations suspended for not respecting working hours during the hottest months of the summer that year.

Positive Platform

While scope remains for further improvements in strengthening workers’ rights and protections, progress has indeed been made. As the only GCC country that hosts an ILO office, Qatar and its policymakers have indicated that they intend to continue to engage with international stakeholders after the 2022 FIFA World Cup to ensure that reforms are fully implemented and understood across the business community.

Qatar is widely acknowledged to have led the way in the region when it comes to abolishing the kafala labour system and establishing a minimum wage. It now has a positive platform to build on as it seeks to develop a diverse and sustainable economy fuelled by talent and innovation. As international investors increasingly scrutinise risks against environmental, social and governance criteria, Qatar’s moves to position itself at the forefront of labour reforms are expected to generate returns in the years to come.