Construction

Saudi salary delays: Foreign powers demand action

By Jerusha Sequeira

Posted on March 8, 2016

France, the Philippines and Bangladesh taking up case of unpaid wages

PHOTO: Some 10 million foreigners work in the kingdom, largely people from South Asia, Southeast Asia and other parts of the Middle East. Credit: Shutterstock

Foreign governments are exerting pressure on authorities and executives in Saudi Arabia to ensure construction firms make delayed salary payments to thousands of workers, it was reported.

Declining revenues from the plunge in oil prices has led the Saudi government to clamp down on state spending, in order to curb a budget deficit running at about $100 billion annually.

This has squeezed the country’s construction firms, leading to delays in paying the wages of thousands of migrant workers in their employment, Reuters reported. Some employees have not been paid for months, the news agency said.

Some 10 million foreigners work in the kingdom, largely people from South Asia, Southeast Asia and other parts of the Middle East. Many are employed in low-paid jobs in areas such as construction, domestic work and retail.

Countries taking up the cause of unpaid foreign workers include the Philippines, France, and Bangladesh, it was reported.

In Manila, Labour Secretary Rosalinda Baldoz told Reuters on Monday that the Philippine embassy in Riyadh was contacting Saudi authorities to resolve the issue. Baldoz said she had assigned her official in charge of workers’ welfare to tackle the issue.

Meanwhile, the French ambassador to Riyadh sent a letter to the chief executive of Saudi Oger – one of the Kingdom’s biggest builders employing about 38,000 people – asking him to resolve the cases of French staff who hadn’t been paid for four months, a diplomatic source told Reuters.

Bangladeshi diplomats also said they had contacted major Saudi construction firms to discuss wages that had been unpaid for over two months.

In a brief statement to Reuters, Saudi Arabia’s labour ministry said all private sector companies were obliged to pay salaries on time and that it would impose sanctions against firms which were late.

An executive at Saudi Oger said his company, like others, had been affected for several months by “current circumstances which resulted in some delays in fulfilling our commitments to our employees.”

Saudi Oger has adopted a recovery plan that will enable it to resume payments from March, said the executive, who declined to be named.

The squeeze on the construction sector has become a major issue for the Saudi business community, it was reported. Last month Abdulrahman al-Zamil, president of the Council of Saudi Chambers business association, publicly asked King Salman to ensure that the government paid companies.

The non-payment of salaries prompted over 1,000 employees of a construction company to go on strike in February, according to local media reports. Some of the workers reportedly disconnected the electricity to the establishment in protest, while a number of employees allegedly damaged the company’s property and attacked administrative staff during a demonstration on the grounds.