Bahrain’s labour market still a work in progress

Published in MEED, 23 August 2018

In recent years, Bahrain has introduced a series of labour market reforms. The response from employers and migrant workers has been mixed, but the authorities seem determined to put an end to the much-criticised sponsorship system.

Manama is also stepping up its response to instances of local sponsors or employers denying foreign workers their rights. Such stories are a growing source of reputational damage for governments across the Gulf, and a case of abuse that emerged in August prompted action and strong condemnation from the Bahraini authorities. The episode also demonstrated the willingness of the Bahraini government to acknowledge some of the flaws in its labour market.

The basis of today’s labour market is the sponsorship system introduced in 1962, under which employers recruit overseas workers and effectively take responsibility for them. But as Ausamah al-Absi, chief executive of the Labour Market Regulatory Authority and head of the National Committee for Combating Trafficking in Persons, admits, this system leaves people vulnerable to abuse. “If the worker cannot walk away, he is forced to accept whatever conditions you give him or whatever practices you have in the workplace,” he says.

It has also created an economic dependency on low-skilled, low-wage employees from overseas. At the end of 2017, there were 763,112 people employed in Bahrain and 79 per cent were foreign nationals.

As well as the vulnerabilities of migrant workers, authorities in Bahrain say the sponsorship system also creates problems for employers, as they cannot hire someone who is working for another firm. This restriction is potentially more problematic given the current trend towards the so-called ‘gig economy’, which sees people employed on part-time or temporary contracts – something the sponsorship system is not equipped to deal with.

Reform attempts

Figuring out how best to go about reform has not been easy. In 2006, a law was passed allowing migrant workers to move jobs without the consent of their employer. Workers were also allowed to stay in the country after they left a job – to give them time to find another post.

Such laws appear to have failed to tackle the root problems. In 2015, a six-month amnesty was launched to deal with the estimated 59,000 illegal workers in the country. Of that total, some 51,000 workers availed of the amnesty, with 80 per cent taking the opportunity to regularise their employment status and 20 per cent leaving the country without penalty.

However, by the end of 2015, authorities found that there were still 37,000 irregular workers in the system, rather than the 8,000 they had been expecting.

“I realised the market wanted illegal workers [and] that when I removed the illegal workers through the amnesty, I removed the supply while the demand continued,” says Al-Absi. “The pay got higher for illegal workers. It was becoming more lucrative to be illegal than legal. Black markets will happen when the regulations cannot satisfy the demand legally.”

That realisation prompted another bout of reform, with the backing of Crown Prince Salman bin Hamad al-Khalifa. On 23 July 2017, Bahrain launched a pilot programme whereby a migrant worker can live in the country as a self-employed individual, without a job offer or sponsor.

There are restrictions for some licensed professions, such as doctors, nurses and pilots, but otherwise migrants are free to offer their services to anyone. “They can work with any number of concurrent employers, full-time, part-time, long-term, short-term,” says Al-Absi.

This ‘flexi-worker’ system is based around a two-year, indefinitely renewable work and residency permit, which includes a medical insurance system. The programme is in the pilot phase, and is being offered to those already in the country and working illegally, but states Al-Absi: “In the near future we’ll be expanding the eligibility of this programme. My hope is that we will replace sponsorship with it.”

Yet while the programme appears to be a sensible response to some of the issues in the labour market, the reaction from migrant workers themselves has been rather unenthusiastic. In the first eight months following the launch, fewer than 5,000 people signed up for the new system, against hopes for as many as 20,000.

“Businesses are supporting us in Bahrain, but the biggest challenge was with the migrant workforce themselves,” says Al-Absi. “I asked myself why and I realised that for the last 60 years, we had not built any channels of trust with the migrant workers – they don’t know we are doing it for them as well as for us.”

Fixing that situation will be a slow process. “Building trust takes time and a lot of sincerity. It takes walking the talk,” says Al-Absi.

Alongside the labour market reforms, Bahrain has also been trying to improve its record on dealing with the related issues of trafficking and slavery. The authorities now run an Expat Protection Centre, offering legal and medical assistance to migrants. A victim’s assistance fund has also been set up to allow those stuck in abusive situations to lodge a complaint without fear of losing their regular income.

Internationally, not everyone has been convinced. A 26 July report by the UN Human Rights Committee reiterated concerns that migrant domestic workers remain subject to exploitation, excessive work hours, delayed or even non-payment, and a “lack of effective remedies” against such abuses.

Among other things, the committee called on Bahrain to expand labour law protection to domestic workers and provide “effective” legal access. There is no doubt still much work to do, but at the very least there is the will to change in Manama.