Wednesday, May 16, 2012

Sponsorship system on its way out in Saudi Arabia

Saudi Arabia Major Changes to Labor Law Expected 

 Al-Humaidan noted that the ministry replaced several provisions in the kafala system Deputy Labor Minister for workers affairs Ahmad Al-Humaidan said that the ministry had started taking practical steps aimed at scrapping the individual sponsorship (kafala) system. "We have already begun changing some technical terms related with the sponsorship system, like changing the term 'transfer of sponsorship' (naql kafala) to 'transfer of services.' Other steps included preventing sponsors from holding passports of foreign workers and canceling the condition to obtain the sponsor's approval for workers to bring their families to the Kingdom," he said. The deputy minister made the remarks while addressing a seminar on private health firms in Riyadh, Al-Eqtisadiah business daily reported yesterday. with new regulations that govern the relationship between the employer and the foreign worker. "If you look at any of these regulations, you can't see anything that is pointing to the sponsorship system. The ministry was able to remove all the restrictions imposed by sponsors on their workers," he said while claiming that at present, there are no obligations between the sponsor and the foreigner except those that come under the framework of an employer and employee. The deputy minister said that scrapping the sponsorship system and easing restrictions on the labor market should be taken into account in the right perspective. "It does not mean that a foreigner can enter the Kingdom and then search for a job in the local employment market. This doesn't make any sense and should not happen in the Kingdom," he said, while stressing that the Kingdom wanted to follow the example of the most regulated and systematic labor markets in the world, such as the United States in this respect. Al-Humaidan emphasized the ministry was striving hard to protect the rights of foreign workers without harming the interests of their employers. According to media reports in March, the ministry had completed a study on prospects of canceling the sponsorship system replacing it with recruitment companies. It was pointed out that the move might lead to the scrapping of the sponsorship system all together at a later stage. The study, which took five years to complete, included the rules and regulations for the new recruitment companies. The Council of Ministers is expected to approve it before the end of 2012. The study proposed the formation of a commission under the ministry to look into foreign labor issues and put an end to the traditional sponsorship system. The Riyadh-based commission will have branches in major cities, such as Jeddah and Dammam. According to the new system, an employer would not be responsible for the wrong actions of a foreign worker outside his work. The study proposed introduction of a mandatory insurance scheme to protect financial rights of foreign workers and employers. The scheme, which may act as an effective tool to end the justification for introducing the sponsorship system, would cover the damages caused by a foreign worker, payment of unpaid salaries and provision of air tickets.

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