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Can Saudi overcome the problem of salary delays?

Salary delays have hurt Saudi Arabia’s contracting sector but recruitment statistics continue to stack up positively in the Kingdom, CW reports

Low fluidity: Contracting firms in Saudi Arabia have reportedly been forced to delay salary payments due to a market-wide slowdown.
Low fluidity: Contracting firms in Saudi Arabia have reportedly been forced to delay salary payments due to a market-wide slowdown.

Earlier this month, Indian Prime Minister, Narendra Modi, inked a labour agreement with officials in Saudi Arabia, aimed at improving the welfare and rights of blue-collar workers in the Kingdom.

Modi spent two days in Saudi Arabia as part of an official visit. He signed a number of agreements with Saudi Arabian decision makers, including one that pertains to labour cooperation for the recruitment of blue-collar workers.

A statement on Modi’s official website read: “[The leaders] welcomed the signing of an agreement on labour cooperation for recruitment of General Category Workers. Both sides also welcomed the establishment of a Joint Working Group on Consular issues under the umbrella of the India-Saudi Arabia Joint Commission to discuss consular issues on a regular basis.”

The Indo-Saudi agreement comes at a time when both countries are embroiled in a controversy over an Indian construction labourer employed by Saudi Arabia’s Al Suroor United Group.

On 12 March, a video was uploaded onto social networking website, Facebook by an Indian human rights activist named Kundan Srivastava. According to Huffington Post India, the video claimed that an Indian truck driver, Abdul Sattar Makandar, was “trapped” in Saudi Arabia for over 20 months by his employer, Al Suroor.

Company officials, however, told Construction Week that these reports are incorrect. In a statement dated 22 March, 2016, Mayur S Ahuja, spokesperson for Al Suroor, said that the worker was slated to receive his contractually-permitted vacation during April.

“With reference to the video, please note [that Mr Makandar has] been in service of our group from 30 April, 2014, and [is] eligible for vacation after two years of service as per [his] contract,” Ahuja added.

At the time the video was uploaded, Makandar was 1.5 months away from “completing two years”, Ahuja continued.

“As per the new Saudi labour rules, the salary of employees is linked directly between the bank and Ministry of Labour.

“If [a worker’s] salary is not paid in time, [then] the companies are automatically blocked by [the] Ministry of Labour, and the company’s work will be stopped. [Makandar’s] vacation is due [at the] end of April, and it has been approved by the management.”

Makandar was informed that, if required due to scheduling constraints, Al Suroor is contractually permitted to postpone his leave by up to 90 days, according to Ahuja. However, he also pointed out that this would only happen if the company needed to amend its schedules to avoid the overlapping of drivers’ vacations.

“We strongly condemn this action by Mr Abdul Sattar [Makandar] without any provocation from the Group,” Ahuja added.

Makandar was suspended by the company on 13 March, 2016, a day after the video was uploaded to Facebook. Further details about the case will be provided following a court hearing, Ahuja told Construction Week.

Makandar’s case is just one of many worker claims to have emerged from Saudi Arabia during the course of 2016.

In March, the country’s labour ministry suspended a number of services offered to Saudi Oger following the contractor’s failure to make employee payments, sources told local daily, Al Okaz. A Saudi Oger executive later told Reuters that a recovery plan had been formed to make these payments by April.

A similar agreement was reached in February of this year to resolve salary delays faced by some employees of Saudi BinLadin Group (SBG). The resolution was reached following a meeting between representatives from the labour ministry, SBG, and Makkah’s police force.

Approximately 1,000 workers protested outside the contractor’s headquarters earlier in February due to the delay, according to Arab News.

Construction Week submitted questions to both SBG and Saudi Oger regarding the status of outstanding worker payments, but neither company responded.

Challenging economic conditions have adversely affected the timely payment salaries in numerous sections of Saudi Arabia’s construction sector. Within this context, one might assume that assume that recruitment would suffer, especially within the Kingdom’s mid- and upper-management employee brackets.

However, Suhail Masri, vice president of employer solutions at job portal Bayt.com, is optimistic about Saudi Arabia’s construction talent pool.

Responding to Construction Week’s query about job-seeker interest in the Kingdom’s construction market, Masri says the Kingdom continues to represent an attractive location, despite the economic slowdown. “According to Bayt.com’s Top Industries in MENA survey (1,232 responses) from January 2016, two out of every five respondents working in Saudi Arabia are satisfied with their current or most recent salary package,” Masri explains.

“While the region as a whole has seen a relative dip in consumer confidence, future expectations among respondents remain positive and bright,” he continues.

Citing Bayt.com and YouGov’s recently-completed Consumer Confidence Index survey, which received 4,263 responses, Masri says the future also looks bright for Saudi Arabian employers.

“When it comes to personal finances in Saudi Arabia, 21% of survey respondents said that their personal financial situations are better now than they were six months ago,” he adds. “The outlook for the future is positive; almost half of respondents – 48% – believe that their personal financial situation will ‘improve’ in the next six months,” Masri concludes.

Modi meets L&T workers in Riyadh

Prime Minister Narendra Modi met Indian construction workers during his official visit to Saudi Arabia last month.

The workers employees of Indian construction giant, Larsen and Toubro (L&T), which is part of a consortium constructing Saudi Arabia’s Riyadh Metro project.

Modi visited the L&T workers’ residential complex in Riyadh, according to India’s Press Information Bureau (PIB) .

“Your hard work has brought me here,” Modi told the workers during his visit to the complex.

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Construction Week - Issue 759
Feb 22, 2020