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Contractors in KSA Seek Fatwa on Labor Fee

Middle East : 07 December 2012

Source: Arab News

Businesses involved in construction have recourse to three legal ways — official, religious and judicial — to contest the decision of the Ministry of Labor to raise work license fees from SR 100 to 2,400 per year, said Fahad Al-Hamadi, head of the National Committee for Contractors.

“The official track involves addressing the minister of labor to reach a fair judgment in this regard,” said Al-Hamadi.

The committee plans to ask the grand mufti to issue an explicit official fatwa after looking into the decision and considering all its effects.

“As for the third track, the committee will file a complaint with the Court of Grievances, to save the national economy from the grave losses inflicted on it, which the ministry didn’t take into account when making the decision,” said Al-Hamadi.

The workshop that the construction sector concluded last Tuesday recommended that the minister of labor meet the contractors to listen to their suggestions so they could all reach a rational decision.

Al-Hamadi said that contractors should demand reimbursements. These proceeds would benefit the Human Resources Fund, which in turn gives support to the Hafez program for the unemployed.

Faisal Al-Shareef, vice president of the contractors committee, said the Ministry of Labor is contradicting itself. Initially, it hastily implemented Cabinet decision 353 on the raised fees. Other decisions had not been implemented. These stipulate extending help to the construction sector to promote it.

Al-Shareef said that the rate of Saudis on the payroll in the sector was at five percent. With the help of the Nitaqat program, aimed at increasing Saudization, it reached seven percent. Now the ministry demands Saudization in our sector should be 50 percent, said Al-Shareef, and that is impossible.

“It seems this last decision is to punish the contractors. If we look at the heart of the matter, we will not find two million Saudi job seekers as demanded,” he added.

There are 1.3 million job seekers registered with the Hafez program, Al-Shareef said, but women constitute 80 percent of this number. Estimates of Riyadh Chamber of Commerce indicate that the direct increase in this sector is 4 to 5 percent.

The Inflation rate will increase to 30 percent, prices will go up accordingly, he added.

Both Al-Hamadi and Al-Shareef agree that construction losses will exceed SR 16 billion as a result of this decision.

“The decision, in its current form, is not favorable to Saudization, or nationalization for that matter.

It doesn’t serve any purpose,” said Abdullah Almubti, head of the Council of Chambers. He added that the decision would have a negative impact on all business sectors that depend on technical and professional labor.

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