Indian workers given new contract guarantee



DUBAI // Indian blue-collar workers can be assured they will not be cheated by employers when they arrive in the UAE, after an agreement was signed between the two countries yesterday.

The online system will need the “informed consent and approval by the worker, the employer and the Indian … authorities of the full terms of the work contract”, before the worker leaves India.

The process aims to increase transparency in recruitment and reduce contract substitution, an illegal practice in which a worker signs a contract before leaving home, but is told to sign another contract on arrival in the UAE, with less pay and longer hours.

And the system may in future be available to workers from other countries.

“We look forward to the full activation of the new system and to making it available to other labour-sending countries in the future,” said Saqr Ghobash, Minister of Labour, after the signing.

Yesterday’s agreement was signed by Mr Ghobash and Vayalar Ravi, Indian minister of overseas affairs at the labour ministry in Abu Dhabi.

“Among the key features of this fledging system is ensuring the informed consent of the worker by requiring that a recruitment agency, duly accredited by the Indian government, make a copy of the draft contract available to the worker and attesting his or her approval of the contractual terms and conditions,” Mr Ghobash said.

“The concerned Indian government agency will access the contract and, upon approval of its terms, issue the emigration clearance.”

A large percentage of the 1.7 million Indian expatriates in the UAE are blue-collared workers.

After this step is taken, the contract will be registered with the labour ministry, which will then issue the work permit to the labourer.

Licensed recruitment agents in India will have to explain to workers the contract terms, the remuneration and employment conditions and the benefits before they leave, officials said.

“It will empower workers in such a way that they know the terms,” said MK Lokesh, the Indian ambassador. “The employer has to file the same contract with the embassy and the labour ministry. Earlier, only after workers got into trouble, we would know.”

Despite the attempt to protect workers, the ambassador conceded that challenges remained.

“It is possible for workers to get cheated. But, recruitment agents are registered with the government and their record is known. They can be punished,” Mr Lokesh said.

There are around 2,000 government-recognised, licensed recruitment agents in India.

The online system is on a trial period and will be operational in four to six weeks, Mr Lokesh said.

“We look forward to the full activation of the new system and to making it available to other labour-sending countries in the future,” said Mr Ghobash.

The system will be a topic of discussion at the Second Ministerial Consultation of the Abu Dhabi Dialogue among Asian Countries of Origin and Destination that will take place in Manila on April 19.

pkannan@thenational.ae

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Dubai launched the pilot phase of its real estate tokenisation project last month.

The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.

Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

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The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Our legal advisor

Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.

Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation. 

Education: Sagesse University, Beirut, Lebanon, in 2005.