Identifier
Created
Classification
Origin
06ABUDHABI1104
2006-03-22 08:33:00
CONFIDENTIAL
Embassy Abu Dhabi
Cable title:  

LABOR UNIONS WILL NOT ALLOW FOREIGNERS TO VOTE,

Tags:  ELAB ECON ETRD AE 
pdf how-to read a cable
VZCZCXRO1628
RR RUEHDE
DE RUEHAD #1104/01 0810833
ZNY CCCCC ZZH
R 220833Z MAR 06
FM AMEMBASSY ABU DHABI
TO RUEHC/SECSTATE WASHDC 4100
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUEHC/DEPT OF LABOR WASHDC
C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 001104 

SIPDIS

SIPDIS

STATE PASS TO USTR FOR KARESH AND ROSENBERG

E.O. 12958: DECL: 03/21/2016
TAGS: ELAB ECON ETRD AE
SUBJECT: LABOR UNIONS WILL NOT ALLOW FOREIGNERS TO VOTE,
NEW RULES FOR BANK GUARANTEES

REF: ABU DHABI 00864

ABU DHABI 00001104 001.2 OF 002


Classified By: Ambassador Michele J. Sison for reasons 1.4 (b) & (d)

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 001104

SIPDIS

SIPDIS

STATE PASS TO USTR FOR KARESH AND ROSENBERG

E.O. 12958: DECL: 03/21/2016
TAGS: ELAB ECON ETRD AE
SUBJECT: LABOR UNIONS WILL NOT ALLOW FOREIGNERS TO VOTE,
NEW RULES FOR BANK GUARANTEES

REF: ABU DHABI 00864

ABU DHABI 00001104 001.2 OF 002


Classified By: Ambassador Michele J. Sison for reasons 1.4 (b) & (d)


1. (U) This is an action request. Please see para. 8.


2. (C)Summary: On March 15, Econchief and Econoff met with
Dr. Khalid Al Khazraji U/S of Labor in the Ministry of Labor
Affairs (MOL) and Mohammed Al Zaabi Director of International
Relations to discuss recent labor developments. An amendment
to the labor law authorizing the Minister of Labor to allow
unions is pending before the Cabinet. Although foreigners
would be allowed to join the unions, they will not/not be
allowed to vote. Al Khazraji stressed the need for USG
officials to lobby the UAEG at the highest levels to pass
labor laws which conform to international labor standards.
The U/S also explained the recent change in the
implementation of bank guarantees, which certain employers
must provide to ensure payment of worker,s wages. End
Summary.

-------------- --------------
Foreigners not allowed to vote in proposed labor unions
-------------- --------------


3. (C) Al Khazraji discussed the proposed amendment to the
labor law, which allows the MOL to authorize and regulate
unions by ministerial decree. He explained his vision of how
labor unions will function. Foreign workers would be allowed
to join unions, but would not have voting rights. Econoffs
stressed labor laws should provide fundamental principles of
freedom of association and the right to organize and bargain
collectively. Econoffs also expressed concern that a lack of
voting rights for foreign workers would make it more
difficult for them to fully defend their labor interests.
They also asked how laborers would be able to unionize, since
that sector appeared to be exclusively expatriate.
Al-Khazraji stressed that he viewed the proposal for labor
unions as a first step. He noted that creating labor unions
and allowing foreign membership was a big step for the UAE
and compared the process to swimming in the sea. "You don't

jump right in," he said, "you go in step by step." He did
not rule out the possibility of foreigners having voting
rights in the future. He said that he thought that the
current professional associations could easily convert to
unions. In the case of laborers, Al-Khazraji acknowledged
the lack of Emirati laborers, but noted that there were
construction-related professional associations and that these
could possibly represent laborers. The U/S stressed the need
for USG officials to push labor issues with the UAEG at the
highest levels and said the UAEG is more likely to revise its
labor laws with pressure from the USG.

--------------
Changes to Bank Guarantee procedures
--------------

4. (SBU) Al Khazraji also explained the current wage
guarantee system, which has been in effect for the past four
years, as well as proposed changes. The system requires
companies to hold a certain sum of money for each worker.
The funds are used to reimburse workers in case the company
defaults on payments. At present, companies hold in escrow
between Dhs 1000-3000 per worker (USD $272-$817) depending on
the number of employees.


5. (SBU) Under the new system, if a company has fewer than
1000 employees, it will pay a guarantee up to Dhs. 3 million
(USD $810,000). If it has over 1000 employees, an employer
must pay up to Dhs. 5 million (USD $1,350,000). Only the
courts can order companies to pay workers from the set-aside
bank guarantees.


6. (SBU) The Council of Ministers, Resolution Number 19 for
2005 ties the payment of bank guarantees to Emiratization and
multicultural work environment requirements. Under the
Resolution, companies are categorized as A, B, or C. A
business is classified as category A if it meets three
requirements: 1) Diversity -- i.e., no more than 30% of its
employees are from the same nationality, 2) If required, it
meets Emiratization targets by recruiting nationals at a
minimum rate of 2% a year, and 3) It has no labor law
violations. If a business meets all three requirements, it
is considered Category A and is not required to pay any bank
guarantees. A company is classified as Category B if: 1)
31-74% of its employees are from the same nationality or 2)
it has violated any labor law. A company is classified as
Category C if: 1) 75% or more of its employees are the same
nationality or 2) it has violated Emiratization rules.


ABU DHABI 00001104 002 OF 002



7. (SBU) In addition to the three Categories set out in
Resolution 19, Dr. Al Khazraji described a subset of Category

A. The companies in the Category A subset must pay bank
guarantees, but smaller bank guarantees than category B
companies. The Category A subset applies to companies that
are meeting Emiratization quotas, but don't meet the other
targets. Companies that are not required to meet
Emiratization quotas, but do so anyway can benefit from this
category.


8. (SBU) Action request: Post requests that USTR and Dept.
provide talking points on the proposed Ministerial Decree
authorizing the establishment of labor unions without voting
rights for expatriates so that Emboffs may raise these issues
with UAEG officials.
SISON