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Tue 22 May 2012 02:39 PM

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Saudi in first move away from sponsor system

Deputy labour minister says kingdom will start licensing expat labour companies

Saudi in first move away from sponsor system
(Image for illustrative purposes only)

Saudi Arabia's deputy labour minister said on Tuesday the Middle East's largest economy will start licensing expatriate labour companies within a month in a first move away from the sponsorship system for foreign workers.

"These labour companies will have licences within a month and they will organise the process of bringing expatriates to the kingdom," said the OPEC member's Deputy Labour Minister Mufarrej al-Haqbani at a conference in Riyadh.

The new labour companies will replace an existing system in which companies sponsor the work visas of foreign employees, and which has been criticised for the control it allows them to hold over expatriate employees.

Companies frequently hold employees' passports.

Officials have previously said the new system will help regulate the movement of expatriates between jobs in Saudi Arabia.

Haqbani also said the kingdom was seeking to replace part of its foreign workforce with Saudi citizens.

"In the short term, the focus is on increasing jobs for nationals... by substituting a part of 8m expatriate jobs in the kingdom," he told the financial conference.

Foreign workers account for nine out of 10 jobs in the world's top oil exporter and the government is introducing a range of initiatives to regulate the labour market with a goal of getting more Saudis into work.

Although the official unemployment rate is about 10.5 percent, economists say the labour force participation rate, the number of working-age people in jobs or seeking work, is lower than 40 percent.

AAF 7 years ago

Excellent initiative!

Shafiqur Rahman 7 years ago

Foreign workers don't have any benefits if Companies frequently hold employees passports, passport should hold with employee only.

If government likes to move away sponsorship system and give benefits to the foreign workers then they have to follow the system of Europe, America and other part of the world.

Once government change sponsorship they have to make this law that, if the foreign worker finish one year or two year work contract with the existing company than if the worker like to go another company or sponsor he can go easily, there should not any prevention from the existing company than foreign worker will get the benefits.

Once foreign workers apart of licensing company they should not ask to foreign workers any fee or any money and they should behave with the workers good.

Iqama, Insurance, medical & exit, re-entry money should pay by the existing company with whom they are working during that time & others & benefits as per Saudi Labor law.

SK.Ray 7 years ago

They dont often hold emplyees passport, they almost always do so. This is rampant even in Government organisation. I myself work in an organisation where Saudi Governement has a large share and it is being done here. This is done under the excuse that there is a law to this effect but I am yet to see that law and no one is ever willing to give in writting that there is a law.

Sameer 7 years ago

Anyway insha allah, let us hope for good......