Saudi Arabia hires lawyers to press wages claims

21 August 2016

Most financially distressed contractors have started clearing wages of stranded workers, with the exception of Saudi Oger

Saudi Arabia’s government has hired lawyers to pursue the wages claims of the stranded foreign workers through the kingdom’s labour dispute system, according to Labour Minister Mufrej al-Haqabani.

Several financially distressed construction companies, including the country’s biggest contractor by turnover, Saudi Binladin Group (SBG), have now started paying overdue wages, Al-Haqabani said, adding that the executives of the firm have promised him payments would be cleared before the end of September.

Saudi Oger is the only major contracting firm that is still broadly withholding payments.

“Saudi Oger – now we’ll take it to the courts. Now we are responsible for that. We’ve hired lawyers,” local daily Arab News cited the minister as saying. “As the ministry, we will go through the labour dispute courts to go after Saudi Oger and to collect the claims.”

He reiterated that the troubles at Saudi Oger were not reflective of the condition of the kingdom’s overall labour market and employment situation of foreign workers, most of whom have chosen to remain in the country.

“This is a small segment… of the labour market,” Al-Haqabani said. ”We have more than 10 million expatriates working happily here in the country.”

However, despite government assurances, some of the labourers are staying put at the camps awaiting their final settlement as they fear they may lose it if the exit the country, the newspaper reported.

The Labour Ministry, along with embassies of different countries, are taking care of basic services at some of the camps.

King Salman bin Abdulaziz al-Saud has set aside SR100m ($26.7m) to help the stranded workers, mostly from Pakistan, India, the Philippines and Bangladesh.

The decline in oil prices has severely affected Saudi Arabia’s construction market. There were $4.5bn of contract awards in the kingdom during the first half of this year, down 77 per cent on the $19.9bn awarded in the first half of 2015.

Many contractors in the kingdom have faced financial difficulties amid payment delays, which has resulted in the laying off of thousands of employees. SBG has laid off about 70,000 of its 200,000 workers, and local media are suggesting Saudi Oger has let go of up to 30,000 employees.

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