MINISTER OF LABOR PROVIDES UPDATES ON THE LABOR LAW

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 001723

SIPDIS

SIPDIS

STATE FOR DRL, NEA.ARP, EB
STATE PLEASE PASS TO USTR DONNELLY, BELL, KARESH, AND
ROSENBERG

E.O. 12958: DECL: 04/28/2016
TAGS: ELAB PHUM PREL ETRD AE
SUBJECT: MINISTER OF LABOR PROVIDES UPDATES ON THE LABOR LAW

REF: A. ABU DHABI 00864


B. ABU DHABI 01340

Classified By: AMBASSADOR MICHELE J.SISON FOR REASONS 1.4 (b) & (d)


1. (C) Summary: On April 23, Ambassador and Econoff met
with UAE Labor Minister Dr. Ali bin Abdullah Al Ka,abi to
discuss labor issues, including the strengthening of labor
laws in the UAE. Al Ka,abi updated Ambassador on the
proposed amendment to the labor law permitting a labor
association, recently sent to the Ministry of Justice for
review. The Minister also said that Ministry of Labor (MOL)
officials consulted with Hassan Jemam, a representative of
the International Labor Organization (ILO),regarding
membership in the proposed labor association. Additionally,
Al Ka'abi discussed changing the law to authorize the
Ministry to pay "bank guarantees" independently of the court,
changing the current Thursday-Friday weekend to
Friday-Saturday, the creation of new housing for foreign
laborers, and the problems caused by labor recruiting
agencies. At the end of the meeting, Al Ka,abi expressed
concern about the prospects of a U.S.-UAE free trade
agreement in the wake of the Dubai Ports World controversy.
End summary.

Formation of Labor Association


2. (C) The Minister updated Ambassador on the status of the
pending amendment to the labor law, which will allow the
Minister to issue a decree authorizing the formation of a
labor association in the UAE. Al Ka,abi said the proposed
law would allow for one labor association and stated that the
proposed group would be called an "association" rather than a
"union." (Ref A) The Cabinet,s technical committee on
legislative affairs has sent the proposed amendment to the
Ministry of Justice for review because it is unsure whether
UAE law allows the Minister to create a labor association by
Ministerial decree.


3. (C) The Minister said the new law will permit one labor
association, with representatives from different sectors.
Permanent residents, non- UAE nationals, will be allowed to
join the association, but will be voting members. (Note:
Emiratis comprise a mere two percent of the private sector
workforce. End note.) Al Ka'abi told the Ambassador that MOL
officials consulted with Hassan Jemam, an official of the
Arabic Labor Union, affiliated with the ILO, regarding
membership in the proposed labor association. The Minister
said that, Jemam agrees that only permanent residents can
become members of the labor association. (Comment: Although
the MOL's consultations with Jemam demonstrate the Ministry
is being proactive in seeking ILO advice, restricting
membership to permanent residents would effectively exclude
more than 50% of the UAE private sector workforce who are
contract workers, not permanent residents. End comment.)


4. (C) Minister Al Ka,abi also discussed his plan to submit
a proposal to the Cabinet that would give the Ministry
authority to pay arrears from bank guarantees, which the
Ministry holds. The Ministry requires most companies to pay
a separate guarantee for each of its employees to cover wages
in case an employer defaults on payment. Although the
Ministry holds the money, it cannot pay out from the
guarantee funds under the current system unless either the
employer or the Court authorizes payment. Al Ka'abi's plan
for the MOL to directly authorize payment of the bank
guarantee if it finds in favor of the employee would speed up
the dispute resolution process in future cases involving
non-payment of salaries.

Proposed Change in Weekend/Work Week


5. (C) The Minister also mentioned changing the weekend from
the current Thursday-Friday schedule to a Friday-Saturday
weekend to bring the UAE work week more in line with the
international business community. Al Ka,abi said that
Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan, favors
the change and would even prefer a Saturday-Sunday weekend.
Minister Al Ka,abi said 54% of those polled are in favor of
the change.

Accommodations for Foreign Workers


6. (C) The Minister admitted that the March 30 Human Rights
Watch piece, which condemned labor conditions and practices
in the UAE, was accurate in many respects (Ref B),but added
that the number of striking laborers is very small when
compared to the total number of foreign laborers in the UAE.

ABU DHABI 00001723 002 OF 002


Al Ka,abi said there were 35 labor protests in 2005
involving 10,000 workers, but stressed that this number of
protesting workers represents only .004% of the total labor
force. In addition to late payment or non-payment of
salaries, many workers complain about sub-standard living
accommodations. Al Ka,abi discussed the recent opening of
the Industrial City of Abu Dhabi (ICAD),a &model8 housing
and recreational complex, which was built to alleviate some
of these problems. The Minister explained that in addition
to housing, the complex includes a supermarket, cinema,
prayer facilities, and recreational facilities. Twenty-seven
more complexes are planned for Abu Dhabi to meet the growing
demand for livable and affordable housing.

Recruitment Agencies


7. (C) Al Ka,abi also discussed the role of recruiting
agencies. He realizes that agencies from foreign workers'
home countries are "playing dirty games." If the Ministry
finds out that a worker has paid a recruitment fee to an
agent, the employer must reimburse the employee, said Al
Ka,abi. Al Ka,abi explained that workers are often lured
to the UAE by unscrupulous agents who promise short working
hours, high salaries and other benefits. To combat this
problem, the Minister said the UAE MOL is setting up an
office in Pakistan to educate workers about their rights and
what to expect once they arrive in the UAE. When asked by the
Ambassador if the Ministry would do the same in India, Al
Ka,abi said he would not set up a MOL office there because
the Indian government "will not buy into it." The Minister
also wants to change the system for hiring workers and
proposed allowing a company, instead of an individual, to
sponsor an employee.

FTA


8. (C) Ambassador stressed to Al Ka'abi that a revised labor
law is important in view of the ongoing U.S.-UAE FTA
negotiations and urged that changes in the labor law should
occur sooner rather than later. Ambassador told Al Ka,abi
she hopes the new law will be passed before the Cabinet
adjourns for the summer on July 15. The Minister replied
that he hoped it would be passed "soon." Al Ka,abi
questioned an FTA's value for Emirati businessmen in the wake
of the Dubai Ports World controversy and opined that even if
an FTA is passed, the U.S. Congress might block investments
by Emiratis because they are perceived as coming from a
"terrorist country."
SISON