ILO Exploratory Study on Protecting Construction Workers

6 min read

A new ILO white paper explores potential solutions to two of the main issues affecting construction workers in the Gulf: nonpayment of wages and accidents.

Reports of stranded workers owed months of backpay in the Gulf make international headlines – Saudi Oger collapse in Saudi, Kharafi in Kuwait, and more recently the HKH case in Qatar. But the issue of unpaid wages is a common one, particularly in the construction industry.

The construction supply chain is widely recognised as the primary cause of delayed or nonpayment of wages to workers. Construction workers are usually at the end of a very long chain of subcontractors, each waiting on the one above to release payments in order to pay their own subcontractors and employees.

While most stakeholders agree the bulky supply chain is a contributing factor to delayed wages, it is often framed as an inevitability of working in the sector.

The Exploratory Study of Good Policies in the Protection of Construction Workers In The Middle East - Opens in new tabpresents potential solutions to these issues by examining policies and practices adopted by other countries targeting these same issues in the construction sector.

Though the Kafala system contributes to the high rate of subcontracting in the region, we need not wait for a reform of the entire system to improve the contracting culture/regulations.

The ILO’s main recommendations include:

Improve coverage, implementation, and monitoring of the Wage Protection System

Introduce prompt payment legislation -

Ban ‘pay when paid’ clauses -. Wages are often delayed because subcontractors wait to be paid before paying their own contractors. This can lead to significant delays in the wages of these workers.

Delayed or Non-payment of Wages

Delayed wages are a major issue for migrant workers. Many workers owe debts from their recruitment, and delayed payments result in accruing interest. For others, delayed wages means the inability to pay school fees, medical expenses, and support other vital needs back home.

Understanding how the contracting chain, and its particularities in the Gulf, is critical to tailoring policy interventions. Contractors on the chain are generally not paid, at a minimum, for 2 months after the work has been completed. This is because the certification of costs often takes time, even if no disputes over claims arise (which is rare). Contractors will also often hold back a percentage of the payment as insurance against the subcontractor’s failure to deliver obligations.

Since most companies will only pay their subcontractors once they have been paid – a practice known as ‘pay when paid’ – payments are further stalled down the supply chain. This means workers are often the last to get paid.

The difficulty workers face in resolving grievances through the destination country’s legal mechanisms is a compounding factor; even with the implementation of the Wage Protection System and new regulations permitting workers to change employers if they have not been paid, in practice, workers still encounter significant obstacles to resolving pay disputes. The plight of thousands of stranded workers in Saudi, Kuwait, and Qatar – all countries with a wage protection system – is a prime example.

Additionally, most labour supply companies in the Gulf are small, and limited in financial capacity. This makes it difficult for them to pay workers when they have not been paid by contractors.

The Role of the Kafala

Construction supply chain issues exist everywhere, including places without the Kafala system. However, the Kafala system is a contributing factor to particularities of how this phenomenon arises in the GCC. The Kafala is often touted as a means for the Gulf to encourage a flexible labour force. However, its flexibility is limited and often conflicts with the flexibility needed in construction. With the inability of workers to change jobs easily, and the high costs employers pay to recruit workers, it is cheaper to keep workers on – and unpaid – until they are needed again, than it is to cancel contracts and send workers back home when there are no projects. [This is one reason why subcontracting is so prevalent in the region – direct employment would be impossible given the flexibility needed. Because workers cannot be hired and dismissed for different projects, which require different skills and a different rate of manpower, this manpower is externalised to subcontractors]

Construction Accidents

While is a dearth of data available on construction accidents in the region, the paper highlights factors which indicate a high rate of construction accidents. Subcontracting is again identified a contributing factor to poor workplace safety, in part as it often means there are a mixture of languages spoken at a single site; if workers do not speak the dominant language at the site, or that of the site managers, they are prone to greater risk – especially if they have little construction experience. Many subcontracting firms in the region are also relatively small, and smaller firms often invest less in training and have inadequate access to health and safety advice.

The paper also highlights lax occupational safety and health (OSH) legislation and regulations; for example, it is noted that while labour inspections do take place, they are most often used to check the immigration status of workers rather than conditions of work or the facilities available for workers on the construction site.

Recommendations for improving the occupational safety and health of these workers is for legislation to make both the principal contractor and immediate employer jointly liable for these issues.

Principal contractors should also ensure that contractors who are awarded the contract are competent in OSH management and that there are sufficient resources in the contract to ensure the highest standards possible. One way to do this is to make contractors submit a site-specific safety plan during the tender process. This would include a system and format for recording and reporting incidents/near accidents, and procedure to ensure that all subcontractors on the site are following this.

The report also highlighted the necessity of workers freedom of association and workers representation to achieve progress in OSH and other labour issues. As a step towards legalizing migrants ability to join labour unions, workers should be allowed to join independent, elected workers committee who are involved in designing policies related to employment conditions and other OSH issues.

For the full report, click here. - Opens in new tab

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