More than 500 firms hit for withholding wages

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LABOUR REVIEW: The UAE admitted more needed to be done to enforce labour laws in the Emirates. (Getty Images)

Companies in the UAE were forced to pay a total of 52 million dirhams ($14.2 million) in unpaid wages last year and 545 firms had their activities frozen or suspended for withholding wages, the Labour Ministry said on Saturday.

The ministry said in its 2007 labour report that some 50,000 firms were also fined a total of 300 million dirhams for delays in issuing or renewing labour cards/contracts between the beginning of 2006 and the end of 2007.

It said another 816 companies were charged with forcing employees to work outside between 12:30 pm and 3:00 pm during the hot summer months, which was banned in 2005.

The annual report, published by state news agency Wam, gives an overview of the UAE labour market and outlines measures taken by the government to improve labour rights.

The Labour Ministry admitted there was “much more to be done to expand the capacity to enforce labour laws and fully protect the rights of workers”.

However, it said there was “unequivocal commitment to enhancing the existing legal framework to mandate and support labour rights throughout the UAE”.

The ministry said last year there were approximately 3.1 million foreign workers from 202 countries living in the UAE, which presented unique challenges that took “diligence, time and both fiscal and management resources” to meet.

The UAE is keen to be seen improving labour rights following several damning reports on the plight of low-paid construction and domestic workers in the Gulf state.

US-based Human Rights Watch (HRW) said in a 2006 report entitled ‘Building Towers, Cheating Workers’ that the UAE had failed to stop employers from “seriously abusing” the rights of construction workers.

The UAE, along with other Gulf states, again came in for criticism in a 2007 HRW report entitled ‘Exported and Exposed’ for the treatment of domestic workers, which the group claimed faced “violence, harassment and exploitation”.

There have also been numerous high-profile strikes by construction workers over pay and conditions that have hit international headlines.

In the the most high-profile of the strikes, around 40,000 Arabtec labourers, some of which were working on the Burj Dubai, downed tools for almost two weeks.

Construction workers, the majority of which come from India, have been hit hard by the falling value of the US dollar and soaring value of the rupee, eroding the relative value of their salaries, which can be as little as 400 dirhams ($109) a month.

Last year the rupee appreciated around 12% against the dollar, to which the dirham is pegged.

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USER COMMENTS (6 COMMENTS)

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Late payments
Posted by z-brox, Stockholm, Sweden on 27 April 2008 at 17:43 UAE time


Late paying clients is a problem anywhere in the world. But it is up to the management of the company to solve those issues with their banks and/or other financial bodies. It can never be a problem that is passed down the "food chain" to the employees.
If your clients pay late you need to take that in account when making your budgets and cash flow plans.
I am fully aware that it takes longer to process payments in the middle east than in many other regions. But I think those problems solve themselves in due time. Those that do not pay on time will have to stick with suppliers that do not deliver on time.
So good companies work with good companies and form good bonds and have a healthy staff policy. The rest will have to do with the left overs...

the bright side
Posted by rasha, Abu Dhabi, United Arab Emirates on 27 April 2008 at 16:23 UAE time

Although I oppose the UAE labour law concerning NOC, cancellation process ..etc, I do acknowledge the UAE great effort done in improving the status of the employees.

Compared to other Middle east countries the UAE tries hard to overcome the Human Right's Watch [HRW] criticism, which is something unique in this corner of the world.

I was wondering if the Ministry appointed the representatives for each company where the representative's salary will be paid to the ministry by the company while his/her loyalty and management comes mainly from the Ministry.

These people will more justly work in favour of the law rather than in favour of their companies, they will ensure that the laws are practiced in each company so as to minimize the number of complainers coming to the ministry as well as they'll have a more comprehensive picture of the company's general treatment to its employees. He will interview employees to see if they've received their salaries and if necessary even ask for a bank account statement, he'll be the ministry's eye inside the company while doing the regular representative's work at the ministry.

The difference will be that he's not afraid of the company because he's managed by the ministry. It's just like what happens in driving schools in the UAE when we take our tests there's a traffic police department with police examiners whose loyalty is to the Traffic Police and not to the school, while the school probably pays the GHQ its dues.

I think that this option will also open more job opportunities for those Nationals with strong personalities and sense of justice, since they are least likely to be bribed or influenced by the companies to hide information, it's their country after all and they care most about their reputation.

Delay in Payment
Posted by D. Srinivasan, Abu Dhabi, UAE on 27 April 2008 at 14:53 UAE time


Many companies owe payment to their suppliers and wages to their staff, but still insist to keep on working for them. Unless concerned departments takes stringent action by real regular and surprise checking and/or labour rules or amended to employees favour situation is not going to improve. Departments should have access to company's accounts departments also to know the real status.

I havn't been paid too..
Posted by Asma, Al-ain, UAE on 27 April 2008 at 13:20 UAE time


I havn't been paid by my company for 5 months now. What should I do???

Delay in Payment
Posted by Prasad Nair on 27 April 2008 at 11:25 UAE time

How many contractors pay their sub-contractors on TIME? Very few. How many clients pay the contractors in TIME? Again, the answer is very few. All this goes back to back. So basically there should be a system to check all the payment problems in the market and I am sure once this is rectified rest all will be resolved.

More than 500 firms hit for withholding wages
Posted by frank, dubai on 27 April 2008 at 09:13 UAE time


maybe there should be a report on companies not paying there suppliers too, name and shame is the only way so people and companies know who are the ones not to deal with, as there doesn't seem to be too much you can do against these companies.

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