7th Global Conference on Business & EconomicsISBN : 978-0-9742114-9-7
Ratified ILO core standards, their applicability and effectiveness in the UAE
Zeenath Reza Khan
Instructor
Universityof Wollongongin Dubai
Dubai, UAE
Tel: 00971 4 3672469
ABSTRACT
With international relations and economic integrations across borders, the UAE is fast growing into a developed nation. Very many companies, from multinational and private to public enterprises have found base in the country, enjoying advanced technological yet economical resources to gain competitive edge. This paperseeks to explore why these companies should comply with the core ILO conventions that the government has already ratified but not implemented. The research is based on in-depth interviews with employees from differing positions and industries. Although the cases show that it is imperative the government and the companiescorroborateboth the country labour laws and the individual company policies to the international standards, the paperidentifies factors that may affect or more aptly hinder the applicability of the International Labour conventions.
KEYWORDS
ILO, Labour, Labour law, discrimination, Emiratisation
Ratified ILO Core Standards, Their Applicability And Effectiveness In The UAE
ABSTRACT
With international relations and economic integrations across borders, the UAE is fast growing into a developed nation. Very many companies, from multinational and private to public enterprises have found base in the country, enjoying advanced technological yet economical resources to gain competitive edge. This paper seeks to explore why these companies should comply with the core ILO conventions that the government has already ratified but not implemented. The research is based on in-depth interviews with employees from differing positions and industries. Although the cases show that it is imperative the government and the companies corroborate both the country labour laws and the individual company policies to the international standards, the paper identifies factors that may affect or more aptly hinder the applicability of the International Labour conventions.
INTRODUCTION
The most significant of all commodities is labour.
Like most markets, the labour market deals in one form of commodity – the people-time and people-skill. However, because it is of human in nature, the relationship is taken into consideration - the relationship that exists between the businesses and that exists among groups and individual workers. This relationship may varygeographically, based on race, ethnicity, educational and other backgrounds, etc. With the dawn of globalization, it has become imperative that all nations dealing in labour from around the world share the same values and thoughts on these relationships. Thus, the importance and continuing existence of labour laws, both international and domestic.
This paper is concerned with problems relating to Human Resource (HR)practices in the United Arab Emirates (UAE). It focuses onwhy HRM policies and practices of companies in the UAE might best be brought into compliance with the core labour standards of the International Labour Organisation (ILO). It looks closely at two core International Labour Organization (ILO) standards that have been ratified by the Government of UAE, these being Convention 100 (Remunerations) and Convention 111 (Discrimination), the extent of implementation of these conventions, and factors that affect their applicability and effectiveness in the UAE.
The paper takes a grounded theory approach to address these twoproblems using a case-based approach. Through detailed analysis of the cases the paper highlightsthe effects of implementation, or dis-implementation of the ILO conventions on both local and foreign labour. The presentation and analysis of the case studies form the core of this paper. However, before this, it is necessary to havea brief look at the background, literature review and how the case studies were conducted.
BACKGROUND AND LITERATURE REVIEW
United Arab Emirates
The United Arab Emirates (UAE) is a union of seven sovereign states, formed when the British withdrew from the Gulf in 1971. It is a fast-developing country, with multi-cultural and ever-growing expatriate population in terms of residents, workers and businesses.‘The country has an open economy with a high per capita income and a sizable annual trade surplus. Its wealth is based on oil and gas output (about 30% of GDP). Since the discovery of oil in the UAE more than 30 years ago, it has undergone a profound transformation from an impoverished region of small desert principalities to a modern state with a high standard of living’ (The World Fact Book, 2005).
With the dawn of the new century, it is no shock that the UAE has also recognized the importance of the private sector in the drive for diversified economic growth.‘The creation of a facilitative business environment, which encourages local investors to put their wealth to productive use, as well as attracting foreign investment [is a part of the UAE Government’s ongoing policy-making]. Key elements in the UAE’s incentive strategy have been the provision of first-class industrial facilities and business support services, the reduction of red tape and streamlining of administrative procedures, as well as the updating of commercial laws and regulations to meet international obligations, increase transparency and ensure effective protection for investors. Favorable tax laws and political stability also assist in making the UAE a prime business location’ (Ministry of Finance and Industry, 1999).
International Labour Organization
Founded in 1919, the International Labour Organization is the United Nations (UN) specialized agency with over 175 member nations, seeking to promote social justice and internationally recognized human and labour rights (ILO, 2005). According to the Director-General, Mr. Juan Somavia, ‘It is the only surviving major creation of the Treaty of Versailles which brought the League of Nations into being and it became the first specialized agency of the UN in 1946’ (ILO, 2005).
The ILO formulates international labour standards in the form of Conventions and Recommendations setting minimum standards of basic labour rights such as
- freedom of association
- the right to organize
- no forced labour
- equality of opportunity and treatment
- no child labour
- the right to collective bargaining
The ILO standards are ‘used as a guide for the design and implementation of labour laws’ (Lift the Label, 2004). They are ‘needed as benchmark for the provision of human rights. Theyare intended to be ratified and implemented sothey can have a concrete impact on working conditionsand practices in every country of the world’ (Lift the Label, 2004).
The ILO has eight core labour standards which have been ratified by the UAE Ministry of Labour and Social Affairs (MOLSA) that is responsible for all affairs associated with the labour market in the country. Of these, the two conventions that are a focus of this paper are Convention 100 – the intent and purpose of this convention is to ascertain equal pay and equal remuneration to men and women for equal work. The convention also mentions methods of applying this standard to ensure its fulfillment by employers’ and workers’ organizations, including government assistance.
Convention 111 –establishes the right to all persons for equal employment opportunity and treatment regardless of race, sex, religion, political opinion, and so on. The purpose of this convention is also to ensure that this convention is enforced by those governments that accept it as part o their legislation and modify instructions that may not be consistent with it (ILO, 2005).
Comparing the convention standards against the UAE Labour Laws, Articles 9-11 and 14 of Chapter 1 of Act1 specifically elaborate on opportunity in employment and occupation. However, the chapters do not follow the Convention 111 such that theydiscriminate between nationals and foreign workers. As Article 14 states, ‘…labour department may not give its approval to the recruitment of non-nationals unless its records show that, among the nationals registered with the employment section, there are no unemployed persons capable of performing the work required…’ (MOLSA, 1980)
Further to this is Article 10 that specifies the priority to hire employees on the basis of their ethnicity, ‘…where national employees are not available, preference in employment shall be given to
1 – Arab workers belonging to an Arab country by nationality;
2 – Workers of other nationalities…’ (MOLSA, 1980)
In addition, study into existing literature on equal employment opportunity has unfoldedaffirmative action (refer Appendix C for definitions)by the UAE government - the concept of Emiratisation(refer Appendix C for definitions)that is prevalent in the country. ‘Only 17% of the 4 million people living in the UAE are nationals, and only 40% of these have college degrees. Although the employment market in Dubai in particular is booming, there are currently 32,000 unemployed nationals (4.7%), with 6,000 graduates coming onto the market annually’(CompaniesIncorporated.com, 2005)
In order to combat these disproportions, the government has ascertained the Emiratisation legislation and ‘will deny work permits and entry visas to firms that do not comply with their prescribed Emiratisation quotas’ (CompaniesIncorporated.com, 2005)
Although the Articles in the UAE Labour Law do not document or claim any equal remunerations, the Emiratisation legislation negates UAE’s ratification of Convention 100 (Equal Remuneration) and 111 (Discrimination).
However, the literature review seems to highlight a very large gap in the study of the UAE ratified core conventions 100 and 111 and factors affecting their actual implementations in the country. Whereas there is a growing academic and international interest on human rights, especially in terms of human trafficking, right to organized labour and conditions at the work place, (for example, see United Nations Commission on Human Rights, 2004 and US Department of State, 2003)the historical or academic research interests on the actual implementation of ILO core conventions have not beenof any particular focus. Other than a few websites listing the ratification of all the ILO core standards, the factors that affect theimplementation or dis-implementation of the conventions on both local and foreign labourreally lack a presence in the research literature.
This paper addressesthe lack ofliterature on the UAEratified ILO standards 100 and 111, their level of implementation and the respective effects.
RESEARCH METHODOLOGY
For the purposes of this research paper, the methodology chosen was qualitative in nature and in the form of case studies. Researcher Robert K. Yin defines the case study research method ‘as an empirical inquiry that investigates a contemporary phenomenon within its real-life context; when the boundaries between phenomenon and context are not clearly evident; and in which multiple sources of evidence are used’ (Yin, 1994).
It was necessary, hence forth, to use case studies to establish research findings due to the following reasons:
- As previously established, little or no previous research is in existence on the topic.
- There is a lack of access to statistical information from the Government of UAE on issues such as number of multi-national corporations in the country, number of labourers as opposed to professionals, number of women in the work force, salary scales offered around the country and so on.
- The study is exploratory or investigative in nature due to lack of ‘freedoms of speech, press, assembly, association, and worker rights within the country’ (US Department of State, 1994).
- As will be demonstrated later in the paper, the individual experiences of the sample subjects are at least partly the product of individual interpretation
- As will be demonstrated later in the paper, given situations and/or responses of the subjects may be functional for one person but not for another (for example, foreign and national workers)
The case studies were accumulated through a series of personal and confidential interviews with the subjects.Subjects were chosen at random in terms of nationality, gender, age and positionsemployed, ranging from Managers to professionals such as teachers, to skilled and unskilled labourers such as construction workers, cleaners, andhouse-maids. Sectors of the workforce were chosen to represent a varied group such as government organizations, cross-border enterprises, private companies, academic institutions, agencies;andindustries such as well-established banking and upcoming real estate were also included.
RESULTS
Direct interview with the employee(s) of the company have resulted in three case studies. Employee name(s) and other company details have been changed in order to protect the confidentiality of all parties involved by request.
Case Study 1: A Case Of Priority
Sreeni Vasudevan is the elder of five brothers and three sisters, a considerable size for a family from Chennai, India. He has been married for over 18 years now, and has two boys, one of whom is off to University this year.
Rama Chand is an only son in a family of daughters from Kerala, India. It has been his duty to take over the responsibilities where his father left over 20 years ago.
Both Sreeni and Rama have been in the UAE since late 1960s. Having done several odd jobs for over a decade, both of them landed a golden opportunity when Sreeni was recruited as a Cashier and Rama as the Purchase Officer at a Government organization in Dubai in the late 1970s. With dedication and enthusiasm, both of them carried out their tasks, and handled challenges as and when the occasion arose. With a minimal bachelor degree, they were thankful that they had managed to position themselves and secure their families’ lives.
In early 1990’s, the organization, which is well-established and popular with the public due to its nature of entertainment, had a change in management. A new director was appointed. He took it upon himself to restructure the organization by first introducing an Administrator position, and allocating the position to the existing National employee, who till that point was not sure of his work in the office. The director sent the administrator to London to get trained in his field of work as he had no qualifications and was a high school drop-out. The director also re-built the offices, and re-engineered the staff quarters to make them livable. All these improvements in the span of a year made the employees happy and gave them confidence in the new director’s capabilities to run the organization with care and efficiency.
In mid-90s, both Sreeni and Rama were recognized for their contribution to the organization by being presented with Employee of the Year award along with a bonus and a raise. Sreeni’s hidden talent of painting was nurtured to its fullest when the director asked him to decorate the office walls. By now, Sreeni had his wife and sons brought to Dubai to settle them. He had just managed to complete his responsibility towards his large family back home and would now focus on his sons and their future. Rama, on the other hand, was single-handedly taking care of his sisters, wife and daughter back home. With barely any savings remaining, he had no plans to bring his family. At this time, Sreeni was earning a mere AED 2000 and Rama AED 2500.
By mid-90s, the political situation in the country was also shifting to accommodate more nationals into jobs that were previously filled by foreigners. This was the beginning stages of what we now know as Emiratisation. Being a Government organization, Sreeni and Rama’s company was one of the first to begin the shift. For three years a battle was waged between the director and the government to try and avoid replacing employees from his organization to accommodate nationals. But, in 1998, the Government won the battle and decided to replace Sreeni and Rama, as now there were nationals qualified enough to fill their positions. With a one month notice and due gratuity, both the men were forced to accept early retirement and return to India. At this time, Rama was already nearing 55 and could not apply for any jobs back home as the age-limit in India considers him too old to be efficient. He was forced to join a small company as a cleric in order to earn enough money to marry his daughter off and see his wife and himself through his retirement. Sreeni, on the other hand, returned to the UAE under a new contract to a company in Sharjah to be able to see his sons through school and university.
In their places, the two nationals brought in now earn AED 8000 plus benefits that include housing and other allowances. According to the management, the men are inefficient and can not handle customers in crises situations. They are disinterested in work, come in late and leave early. This in turn has given rise to a hostile environment in the company because according to other employees, the national men seem to get away with everything. Over the past few years, the employees have been demoralized and scared because they no longer feel any kind of security in their positions and this has led to inefficiency in their work. The director now faces the challenge of regaining a balance in the office in order to ensure effective work-environment, which he feels may never be achieved again.
Case Study 2: Low-Wage Earning Laborers’ Plight