New pay system to give workers extra security

The Ministry of Labour say the new system will ensure workers are paid on time.

ABU DHABI // An electronic system that will ensure workers are paid on time is expected to reduce pay disputes but will take time to implement fully, the Minister of Labour disclosed yesterday. Saqr Ghobash said at the launch of the scheme that the Wages Protection System (WPS) would enable his ministry to identify companies that did not pay their workers promptly, or in full - an issue that he described as a "top priority" for the Government.

He added that the move would help create stability in the labour market. "It will take a long time to be fully integrated, we will implement the decision gradually," the minister said. "This initiative greatly enhances our ability to implement preventive measures to reduce labour disputes pertaining to wages and will offer solutions that will guard workers and employers against keeping large amounts of cash at workplaces."

The introduction of electronic payments for more than three million labourers is a complex task. A federal order specifying that all labourers should be paid through banks was meant to be enforced from January 2008, but became bogged down over the reluctance of banks to open accounts for large numbers of low-income people. Under the WPS, initiated with the support of the UAE's Central Bank, an employer must choose an agent - a bank, money exchange or financial services company - through which its workers will be paid.

Payments will have to be made by the 15th day of each month. Officials would not comment on the time frame for the rollout of the system, which will put an end to the practice of employers paying workers in cash. A ministerial order specifying the names of the businesses that should take part in the system and outlining a timetable for compliance would be issued "shortly", said Humaid bin Deemas, the undersecretary at the ministry. Construction companies, which were "high risk" in this regard, would be the priority, he added.

Companies would be given "ample time", after which those failing to comply would face "disciplinary measures", including the withdrawal of ministry services. Mr Ghobash declined to give further details of penalties. "We will do what it takes," he said. Under the system, wages can either be paid directly to money exchanges and banks to be collected by workers, or representatives from the exchange can go out to labour camps and distribute the cash. Initially, employers will choose by which method their workers will be paid.

More than 500,000 labourers already receive their wages in this way. Samir Khosla, the managing director of Brentford, a Dubai-based contracting company, said that using an exchange as an agent had enabled his company to pay its 700 workers electronically. "This is an excellent and convenient system," he said, adding that when the exchange's staff came to disperse the salaries, they also carried remittance forms for workers who wanted to send money back to their home countries.

The company had initially had difficulty finding a viable scheme for workers who were often illiterate and unable to operate an ATM displaying instructions in Arabic and English, while bank accounts were usually available only to semi-skilled workers such as foremen or welders. However, some workers spoken to yesterday were cautious about the new system. "I want my salary in my hand - Dh900 plus overtime. I don't know how to read or write, so I won't know how to use a bank card. I don't want this new system," said Sultan Ahmed, who works on a construction site in Abu Dhabi and lives in Musaffah.

He said he was concerned that any discrepancies in pay as a result of overtime worked would take a long time to resolve through an electronic system. Abdul Kuddus, who works for Al Hussain general contracting company in Abu Dhabi, said: "I have no problems with securing the cash I get. I immediately remit most of it. "If you have a bank card, maybe you can show documents if you don't get paid, but we've never had that problem. And even if I was looking at the document or card, I wouldn't be able to tell what it said."

The importance of a comprehensive system for paying labourers has increased since the financial crisis reached the Emirates. Lawyers say they have seen a marked increase in pay disputes recently as workers seek compensation for unpaid wages, forced pay cuts and unpaid severance packages. "This will enable the jobs market to be stable and that in turn will increase productivity," commented Mr Ghobash.

[e-mail] * Additional reporting by Suryatapa Bhattacharya