Lessons in extortion explained

58 security personnel were made redundant by the Seef Mall a few days ago in an effort for the company to be more profitable by out-sourcing security. The ex-employees were given an extremely fair severance pay (the last one negotiated was 6 months for every year employed by them, coming to some BD 22,000 in severance pay for the group, the members of which used to get between BD 200 to BD 250 per month if not less) but that was rejected. Their union is demanding severance pay equivalent to 5 years’ wages per person. The excuse given is that these people have loans and families to support.

The whole of Bahrain is in a tizz with this “issue.” Every paper has articles and editorials about it since this started. Members of parliament are “outraged” at the unfair dismissal, the the workers’ unions are giving interviews left, right and centre. The minister of Labour and Social Affairs is into the fray as well. He (or at least his Ministry) has given Seef Properties, the owner of the Seef Mall, the go ahead to outsource security to a private company, but now he’s coming out that he was never aware of this decision and wouldn’t have sanctioned it had he been aware of it. The company on the other hand has proof that he did know. And the games start.

Now, like with any issue in the past 3 or so years, the affected workers through their union have approached the King to force the company to hire them back. As if he’s not busy enough.

Can you now imagine the Vaseline jar or KY jelly being put to good use with the company bending over?

Right. This sums up the labour market in Bahrain. The worker has the ultimate power, no businessman or woman has the balls to fire a Bahraini. Even if you caught that Bahraini steeling from you, physically damaging your office equipment, selling your trade secrets, or even screwing your dog. Because if you do, then be prepared to be immediately sued for an inordinate amount of money.

You, as a businessperson, will be at the worker’s mercy. The very first thing this “dispossessed” person will do is lodge a complaint for wrongful dismissal with the Ministry of Labour, they will move the case to the Labour Courts and they in turn will slap you with a bill so big that it would be better for you just to up-sticks and close your shop, declare bankruptcy thus leaving of course more people out of work.

Welcome to the wonderful world of employing Bahrainis.

Do we have to? Have you heard of state controlled and sanctioned embezzlement and hostage taking? If you haven’t and you intend to do any kind of business in Bahrain, you soon will. It will be the stuff of your most virulent nightmares. Believe me, I have been having the same recurring nightmare for about 12 years. It is not a pretty thought I can assure you.

There is no way in hell that as a business, large or small, for you to get the correct employees you need for your survival, success and growth under the current stilted labour laws. I’m talking about Bahrainis here. Give a Bahraini the option of working for you and the interview will go like this:

1. How much you pay?
2. Not enough, how much more?
3. Ok, I’ll fink about it.
4. I only work morning. How many shift you have?
5. I only work morning.
6. How much you pay more?
7. What time start? I come between 9 and 12 ok!
8. You give me mobile.
9. You give me car.
10. You give me holiday 2 months every year.
11. Sometime I don’t come to work because period. (huh? You’re a man!)
12. I only get work when pregnant 3 months. Don’t show. I get maternal leave one year. Full paid. Then I leave ok.
13. I get mobile, yes?
14. How much you pay more?

Now take your pick, this could be an interview for a secretary, office boy, technician, whatever. Just change the language up or down to suite, but the essence is the same.

And the hidden thing in all of this of course is that after you do employ them, they will continue to try to find another job and will leave you even if the pay difference is 5 Dinars. And even while transferring to another job they will:

1. claim unfair dismissal.
2. sue your ass for the privilege or having hired them in the first place.

And do you think they will stay in that “greener pasture” long? No, they will continue to try to find another job, UNTIL of course they land a GOVERNMENT job! THIS my friends, is the ultimate for a Bahraini worker. They will be in their heaven when they get that and will hold on to it with their teeth until the day they die, and even after that, they will have had dibs put on their seat for their children, and their children’s children.

Why? No need for performance, evaluation, and a guaranteed lifetime of doing nothing. Add to that the fact that they will only work mornings, so almost all of them will get another part time job for the afternoons or start their own grocery, tailor, garage, or electronics repair/sale shop!

So why waste time even attempting to hire Bahrainis in the first place? Remember what I said about the government sanctioned extortion above? A businessperson CANNOT employ foreign staff UNLESS you have the token Bahrainis. So most small businesses at least just hire an office-boy/driver and with that you will get one visa (if you’re lucky, or have the right connections) to employ a foreign person you can depend on.

You’re expanding? You’re moderately successful so now you need to hire a secretary? Bahrainis only can hold his exalted position. Refer to “steps of successful interviewing” above. But pay particular attention to points 11 and 12 though, don’t get caught now, don’t say I didn’t warn you!

And you wonder why we have unemployment here? How can the private sector, which is the largest employer on the Island cope with this phenomenon? How can I as a small business owner employ an office-boy and pay him a comparatively good wage, higher than the national average for such a job, fire the stiff because he threatened my life (literally) and he not only walked away with it, but the court gave him 7 months’ salary as severance pay, a bonus because he worked for me for a few years, and pay his full social insurance which we are not eligible for anyway? Now repeat this story at least once every 3 years or so. Vaseline anyone? Anyone?

The unemployed don’t WANT employment. Why the hell should they if each and every one of them can “sell” his CPR (central population register) number to an employer for 100 Dinars or more and be a “ghost” worker, just for the privilege of this employer to get a work permit for a foreign worker? Just walk by the Ministry of Labour any day of the week and you will find them all sitting around, sometimes inside the ministry’s halls waiting to catch someone to sell their numbers to? This is a highly profitable fishing exercise! And if we do fall into the trap and do buy a ghost-worker we have to pay into his social pension fund as well!

    (I should probably explain the CPR thing. Every person in Bahrain must have a central population register number. This number dies with you and you need that card for conducting anything with the government, banks, anything. If you hire a person, that person has to register with the Ministry of Labour using their CPR card number and that number is cross-referenced to your commercial registration, so that the government knows how many you employ, who you employ and when you employed them. Why would a country that doesn’t have any taxes do that? Big brother of course.

    So let’s say that you want to hire a Bahraini in order to really hire a foreigner. What you do is get an unemployed Bahraini to just register with the Ministry of Labour as your employee, then the Ministry will deem it correct to give you a work permit to hire a foreigner.)

More? Ok. A business cannot get ANY government contract unless they get a certificate from the Ministry of Labour certifying that your company actually employs the required quota of Bahrainis the ministry has set. In most business enterprises that varies between 25% to 75%, maybe higher.

Okay you are officially a good citizen and employ Bahrainis as a matter of course. You are patriotic and truly believe that you do good by not only employing Bahrainis but also train them, bring them into your business and give them responsibilities and make them grow with you. This can work and does work in some cases, but not in the small business arena. This only works for larger companies, banks, insurance firms and of course the great benefactor: the government.

For the small and medium enterprise this is fraught with untold danger. The sword will continuously hang over your head: if the person gets a slightly better paying job, he WILL leave. If the person gets a government job, he most definitely will leave, but if has stayed with you for a few months and learnt the ropes he will not only leave, but leave and start a business to directly compete with you, taking with him of course most if not all of your customers. This has happened, and in this environment and stupid labour laws will continue to happen.

The solution is so simple and staring the government in the face all the time that it boggles the mind why it is so difficult to grasp and enact. FREE the labour market! Remove all these hindrances to small and medium businesses. Invest – really invest – in effective training schemes. Radically revise the dilapidated educational system. And hold the workers responsible.

If as a business you absolutely NEED to fire someone, then ensure that the contractual agreement between the parties actually is respected, don’t come back and say that if the contract does not tally with the official contract template from the Ministry of Labour then it is invalid. What, did the guy sign a contract blindly, cannot read, cannot think for himself so that the government once again acts as the big brother here? If anyone signs a contract which is fair and correct, why force the government’s own version down your throat? If you fire someone, give him the correct severance pay, as dictated by the mutually signed contract, don’t even LET the bastard come and complain to you that he was wrongfully dismissed and demands 20 years’ salaries because his wife can’t keep her legs closed and now he has 19 children. Why the fuck should I care? I want a productive employee, I’m not running a child-bearing farm, nor am I a family planning unit.

Having said that, NO company is going to fire a good employee. It has invested time, money and a lot of effort into training the employee on the various aspects of the business, why go through all of that again if you don’t have to? We’re running businesses to make money after all, not squander and lose it.

Almost every day we get teachers, labourers, and even professional nose-pickers demonstrating because they can’t get jobs. In most cases it is not because jobs are not available, it is because they don’t WANT the jobs found and offered to them on a silver platter. It is because they are not flexible enough to do something else, it is because they want a government job, and it is because they want a hand-out. And they hold the business enterprises by the balls to get what they want.

Sure there are cases which are genuine. Sure some people are highly educated and cannot find jobs because of discrimination and other factors. I am all for that person and am aghast with disgust as to why a job cannot be found for them. But generally, ask any business owner about this situation and I can guarantee that if they are honest they will fully agree with me.

Minister of Labour, if you are in the mood to listen, then listen to this advice:

1. make your absolute priority in your office to find the fastest and best way to close your ministry. It is not needed. The best way to do that is for you to enable, encourage and harbour free trade and a free labour market. For the sooner you do that, the sooner businesses will boom and as they boom they will require more workers and the country’s main unemployment problem will dissolve. Trust me on this.

2. shut down the labour courts. They are useless and unnecessary. They are completely biased to the workers anyway and they (along with your ministry’s policies) are throttling business opportunities and FUTURE job opportunities for your armies of unemployed. If a just claim to wrongful dismissal is raised, then raise it in a civil court. And LOOK and STUDY the documents presented by the employer, rather than judges arbitrarily remove the soiled finger out of their proverbial ass, test the wind with it, and award a sum of money that will break the small business’ back, hence creating more unemployment. An even better option is use a tribunal. It does work in other countries.

3. invest in education. Throw all the current books away, let’s have a national bonfire, it will be a pretty spectacle. And then bring in real experts and real teachers to teach. If you have to close all the schools for a year or two to get that done then it’s not a problem, they’re not learning anything now anyway.

4. LISTEN to the business community. They are your friends. They are the people who are creating and maintaining jobs. They know what they’re doing and they know how important loyal and productive workers can be.

Back to the start now with those security personnel. The majority of the sacked workers have been offered jobs by the company taking over at the same or even better salaries. Get them to take it! It’s an opportunity which should not be missed. If they refuse, then fuck ’em. They will restart selling their CPR numbers anyway…

Here’s something that you should read, study and take to heart:

Opinions differ as to whether the economic success of Dubai can be replicated elsewhere in the Middle East. Delegations regularly troop through Internet City, and Egypt recently rolled out its own technology park, Smart Village, near Cairo.

But no other Arab society seems to possess quite the same readiness to throw its doors open to outside influences, coupled with the flexibility to capitalize on them.

“Dubai’s a complete anomaly, like Singapore or Hong Kong,” said Peter J. Cooper, editor of AME Business Info, a journal of gulf commerce. “Port cities have always been more liberal.”

Philadelphia Inquirer: A city-state run like a conglomerate

Bahrain is a port country not just a city, or am I mistaken?

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12 Comments
  • anonymous
    10 March 2004

    Workers rights (when they’re Big Brother staff)

    Does anyone know whether the Bahrain Federation of Trade Unions or the new unemployed people’s union has said anything about the fact that 200 people have been thrown out of their jobs thanks to the campaign of intimidation against the Big Brother production staff?

    Or for that matter have the BHRS or the BHRC said anything about the abuse of human rights that this Islamists campaign entailed? Apparently, even the Bahrain Society for Public Freedom and Democracy Watch has come out against Big Brother.

    Its shameful that these organisations go round the world touting their importance as human rights groups or representatives of civil society, when they say absolutely nothing about a gross human rights violation that takes place in front of their faces in Bahrain.

    BHRS/BHRC? BS more like.

  • mahmood
    11 March 2004

    Re: Workers rights (when they’re Big Brother staff)

    I really wish I had more time on my hands to join all of these societies, attend all the seminars and political events, just so I can understand what the hell their agendas are. As I don’t have that luxury, I think we should encourage them at least to publicise their causes and communicate them via the web. Hell, I’ll even volenteer to set up their websites for free!

    As for this issue, selectivity doesn’t help their cause at all. They should be apolitical and completely unbiased. If they see a human rights violation including freedoms they should immediately act on it.

  • anonymous
    18 March 2004

    Lessons in extortion explained

    Mahmood,

    Did the below happen to you? In some ways small firms/business face some of the same problems in the US. Workmans Comp issues, “discrimination” lawsuit fears, mounting Heath Insurance costs, employee’s leaving after learning the ropes etc. Good help is hard to find regardless of the current ecomonic conditions. The fear of being sued for “wrongfull termination” is enough for many small firms in the US to simply NOT HIRE somebody. Even though it is hard to prove these cases the business is still stuck with a HEFTY legal bill with little or no recourse after the fact.

    [size=9][/size] How can I as a small business owner employ an office-boy and pay him a comparatively good wage, higher than the national average for such a job, fire the stiff because he threatened my life (literally) and he not only walked away with it, but the court gave him 7 months’ salary as severance pay, a bonus because he worked for me for a few years, and pay his full social insurance which we are not eligible for anyway? Now repeat this story at least once every 3 years or so. Vaseline anyone? Anyone? [size=12][/size]

  • anonymous
    7 February 2005

    Lessons in extortion explained

    From Todays GDN. I think this begs the question why should anyone try to create jobs if this is the outcome? Or am I missing something?

    [b]Bahrainis forfeit chance of 21 jobs [/b]
    By MONTHER AL ARRAYEDH

    MANAMA: Bahrainis yesterday snubbed the chance of 21 new jobs in the hotel industry.

    Not a single candidate turned up for an open-house for potential recruits for jobs offering salaries ranging from BD160 to BD450, at the Hilton.

    This was despite a nationwide advertising campaign, said hotel deputy general manager Abdul Rahim Al Sayed.

    “It hurts me as a Bahraini to be faced with such a situation,” he said. “Bahrainis are suffering from unemployment and here we are trying to help them, but nobody turned up.

    “We paid a lot of money to advertise and were willing to pay even more on training and development.

    “Our basic salaries range from BD160 for a non-experienced receptionist and can reach BD450 for a pastry chef depending on experience.

    “We also take promising candidates abroad on visits to other hotels in Kuwait and Cairo. “But what are we supposed to do if nobody shows up. We sat there from 9am to 1pm and not a single person walked in.”

  • mahmood
    7 February 2005

    Re: Lessons in extortion explained

    isn’t that the truth!

    we were actaully talking about labour market reforms and got a sneak-peek into what’s coming up in the next couple of months by someone who intimately knowlegeable of these plans last night, and I must say that if they come to pass, I shall be impressed.

    What is even more impressive is how much “on the pulse” this person was… but that’s for another post and another time…

  • salima44
    7 February 2005

    Lessons in extortion explained

    [quote]we were actaully talking about labour market reforms and got a sneak-peek into what’s coming up in the next couple of months[/quote]

    Well if that isn’t a big nugget and tease to drop on us! Can you give us an idea of what’s coming up?

  • anonymous
    26 October 2005

    Lessons in extortion explained

    It is roughly a year and half since you posted “Lessons in extortion”. Has anything changed? Is the market better or worse?

  • mahmood
    27 October 2005

    Re: Lessons in extortion explained

    Unfortunately nothing has changed as far as I can see.

    There are a lot of promises, but if parliament has anything to do with the new labour initiatives by the EDB, it will be a stillborn child, and that is increasingly what it looks like happening. For instance the parliament is debating the new law which is made up of 47 articles, and they have been hashing it out for quite some time now but only 5 articles have been approved! I guess it might take another 42 months of parliamentary meetings to get the other articles approved, by that time of course they have contributed hundreds more to the ranks of the unemployed.

    As far as employees themselves are concerned, let me give you a personal example. My company have placed no less than 5 ads in the local papers (Arabic and English) for a sales/BDM position and have interviewed no less than 10 Bahrainis and a few foreigners. None of the Bahrainis were interested in the job although the salary offered is higher than average etc etc.

  • anonymous
    27 October 2005

    Re(1): Lessons in extortion explained

    Sorry to hear that Mahmood. I know you hired one new chap and I hope he works out. The other job was for a sales spot wasn’t it? Tough to fill those with good people in ANY market.

  • jc
    13 July 2006

    Do you have “at will” employment? In the states, many positions (especially in the service sector, and in construction) are “at will” meaning the employee can quit at any time for any reason, or none at all, and that the employer can terminate an employee for any reason, or none at all (employees and employers, at least in Pennsylvania, pay into an unemployment compensation fund, I think some 0.5% of pay)

  • mahmood
    13 July 2006

    Only if they were illegal! That’s why a lot of people employ these “free visa” people to do a job on a temporary basis and they just disappear once the job is done. these people you can fire at will, and they can just simply walk off if they like.

    The real unfortunate thing is that they are not protected by law at all. In fact if they do go to the authorities to complain about anything, their complaint will simply be ignored and they will be on the first flight out.

  • jc
    14 July 2006

    In the end, I think it comes down to political theory — the government is attempting to maintain as much control as it can possibly hold onto. It sounds like, in any employment situation involving a Bahraini, the onus is on the employer to show cause for termination. Its a good way for MPs to show their “dedication to the working man”; the rise of unions I am sure is linked to political patronage, and in many ways may be the remenants of the social contract in the 80s and 90s — keep your mouth shut and get this cushy job (it stops working so well when oil drops below $15/barrel, as the Saudis found out).

    Im going to go out on a limb and say that part of the problem may be the amount of money the government has sunk into an ownership stake of Bahrains bigger companies — to the point that industrial leaders are disproportionately affected by day-to-day political battles.

    Funny thing is that in China, the unions are the mouthpiece of the Communist Party and are there mainly to quell worker disturbances; any competing union is swiftly crushed.

    In the Seef Mall case, the terminated workers were part of a union, presumably one that negotiated a contract with Seef Mall management. In that case, the issue of “breach of contract” should be adjucated in a civil court. If, as we say, it is a frivolous lawsuit, the union should be forced to compensate for reasonable legal expenses for defense.

    But the question is this: most contracts have clauses stipulating things like termination of union employees, and conditions when the contract can be broken, or circumstances under which binding arbitration can be entered unto. If this wasnt there, or the language was overly broad, seef mall management should not have signed the contract. I mean, it is a simple matter of contract law. So, did Seef Mall management sign a contract that was poorly written (legally indefensible)? If so, why? It makes me suspicious that there was some political involvement here, gentle pressure applied to help strengthen the legitimacy of certain unions by coming through with a good contract.

    So I think it comes back to politics. Why let established case law stand if you can grandstand every time the system fails, or you can hold up a crisis solved as proof of your political legitimacy?

    Chris Matthews, loud pompous a-hole that he is, tells a story about when he was an intern for (convicted felon) Dan Rostenkowski, about an amendment he wrote to a bill that would automatically index increases in Social Security payouts to the Consumer Price Index (a measure of inflation). It died in committee, because members of the House wanted to be able to vote for an increase in Social Security payments and take it back to their constituents and say “look at what I did” ( I think Im fudging the details). Point is, sometimes good politics gets in the way of good governance.

    PS In America it is illegal to fire someone for engaging in union activity or engage in discriminatory hiring/firing. Its a very high legal bar to prove wrongful termination under the “at will” schema.

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