Update on Effects of Oil Price Decrease on the Employment of OFWs
Department of Labor and Employment
29 February 2016
(Following the instruction of Labor and Employment Secretary Rosalinda Dimapilis-Baldoz to all Philippine Overseas Labor Offices to provide weekly updates on the effects of the oil price decline on OFWs, the Labor Communications Office, in cooperation with the International Labor Affairs Bureau, is providing below a summary of the POLO reports for the week.)
In the Eastern Region of Saudi Arabia, the POLO reported a decrease in job orders, from 181 last week to 93 this week, with corresponding decrease in the number of contracts processed, from 665 last week to 516 this week. There is no report of termination, but SRACO, a private construction, consulting and maintenance company, was reported to possibly lay-off its workers in the maintenance division due to the oil price decrease. Another private company, Azmeel Co., a construction firm, was reported to have given three options to some of its workers—release or transfer, termination, or resignation. POLO was instructed to find out how many OFWs are working in these companies.
In Dubai, UAE, the POLO reported that land-based job orders processed during the first two weeks of February reached 986 compared to 1,067 during the same period last year, a 7.59 percent decrease. The decrease was noted in manufacturing and retail, while an increase was recorded in hospitality and health and wellness. There is also an increase of 100 percent in job orders for seafarers, recorded at 123.
The POLO received a report from an employee of Duty Free Dubai that the company is no longer paying for extra hours worked, but is granting extra day-off. It also received a request for assistance from an OFW working at Hallmark LLC, saying he and 10 others in Dubai and 11 other OFWs in Abu Dhabi were declared redundant. This is consistent with the previous report that the retail sales sector is affected by the crisis due to the oil price decline. On the other hand, Emirates Flight catering had submitted a job order for 300 waiters and waitresses for Dubai Airport Terminal 3 and Concourse D. There is also a demand for 70 cleaners for Emirates Airlines’ added flights to the UK.
The POLO in Abu Dhabi reported a decrease in the number of job orders verified and processed, from 223 last week to 65 this week; an increase in contracts processed, from 188 last week to 211 this week; and a decrease in OECs issued, from 593 last week to 561 this week. Almost all of the job orders verified and approved are in services—49 percent are in sales; 22 percent are in beauty care; and 18 percent are in cleaning services. No job orders for the oil and gas sector was processed this week, compared to 23 job orders last week. There were 14 terminations this week, all in the oil and gas sector, but not on account of the oil price decline. Of the total, 13 resigned due to personal reasons and family problems, while the remaining one was terminated within the probationary period due to poor performance.
The POLO in Qatar reported an increase in the number of job orders to 103 this week from 63 in the previous week; increase in employment contracts from 639 in the past week, to 783 this week; and an increase in OECs issued, from 314 the previous week to 428 this week. The POLO is monitoring an unofficial report that Hamad Medical Corporation will implement another termination of its expatriate workers. It also reported the receipt of a request from the Aboitiz Group for engineers to work in its energy and power projects in the Philippines, as well as a letter from the Dr. Hassan Al Abdulla Medical Center which wants to hire Filipino nurses retrenched by their employers in Qatar.
It also reported three terminations—(1) an OFW-architect, terminated by Qatar Petroleum in October last year, but was able to transfer to a new employment with another company, AEB; (2) another OFW-architect, terminated by his company, Worley Parsons, but was able to transfer to a new employment with another company, MZ & Partners; (3) and still another OFW-architect, terminated by Al Jaber Trading & Contracting this month and still looking for a new job after he got a no objection certificate (NOC).
The POLO in Kuwait reported no termination due to the oil price decline, especially in the state-owned Kuwait Oil Company whose chairman even revealed an expansion plan in the next five years; that despite the decline in the price of oil, Kuwait continuously expands its oil refineries and explore new oil fields.
The POLO in Bahrain reported no termination in this week; an increase in job orders processed, from 20 in the previous to 38 this week; an increase in employment contracts processed, from 102 last week to 147 this week; and a decrease in the number of OECs issued, from 185 in the previous week to 146 this week.
A separate update from the DFA, as culled from media reports, states how the Bahrain government plans to recover from an economic downturn—increase in fuel prices, cut in government subsidies, imposition of fees on sanitary network structure, and increase in toll fees. Reports have hinted imposition of taxes, including plans to tax income of expatriates.
A memorandum by Dr. Amable R. Aguiluz V, Special Envoy to the Kingdom of Bahrain, provides the information that the Bahrain Prime Minister and the Bahrain Labor minister have re-assured Ambassador Aguiluz V that there is no truth to the systematic layoff of OFWs in Bahrain, and that the Kingdom remains steadfast in its policy of supporting migrant workers; and that it is continuously open to accepting new OFWs.
But also this week, the DFA informed the DOLE that five members of the Bahraini Parliament submitted a proposal for the non-renewal of employment contracts of half of expatriates in Bahrain to accommodate unemployed Bahrainis.
In Oman, the POLO reported that there is no termination this week, and that no single OFW is yet affected by government’s austerity measures. It reported a drop in job orders processed, from 1,048 last week to 148 this week; an increase in employment contracts processed from 196 last week to 225 this week; and an increase in the number of OECs issued, from 88 to 105. The POLO also said in its report that Oman expects a fiscal deficit of 17 percent this year as the low oil price eats into export earnings. Thus, the Ministry of Finance has confirmed a decision to cut a number of benefits enjoyed by expatriates and Omani employees in state-owned institutions. As for private sector employees, the Ministry of Labor guarantees existing contracts, including workers’ rights which it said should not be violated by companies under any circumstance. It gives oil sector companies, however, the flexibility to re-study their expenses and stop some unnecessary privileges.
The POLO in Malaysia reported that Malaysia faces a crisis, with the global drop in the price of oil impacting much on the economy, as government revenues from petroleum accounts for 40 percent of total revenue. Negative global conditions exacerbate a protracted political crisis surrounding the Prime Minister. The government, to raise revenues, has increased the levy fee for foreign workers by 100 percent and 300 percent across manufacturing, services, construction, agriculture, and fisheries sectors.
For the three weeks of February, job orders processed had increased to 45 compared to 37 during the same period in 2015, but the number of workers required declined to 279, from 801 during the same period in the previous year.
POLO has gathered that Petronas, the state oil company, with 21 OFWs, will not renew contracts of its 700 expatriate workers, except those involved in ongoing projects; Technip Geoproduction Sdn. Bhd., which employs 98 OFWs, has no record of pre-termination, but will retrench its local workers and not renew contracts of expatriate workers; MMC Oil and Gas Sdn Bhd., which employs 21 OFWs, has no record of pre-termination, but contract renewals will be based on project requirements; KNM Process System Sdn. Bhd., with 82 OFWs, has no retrenchment and no record of non-renewal of employment contracts; and Sapura Kencana HL Sdn. Bhd., with 100 OFWs, will retrench local employees and will not renew contracts of expatriate workers.
In Brunei, the POLO reported that the contracts of two workers in an oil and gas company will not be renewed. Job orders processed this week was at 41 involving 155 workers, compared to the 25 job orders processed last week involving 165 OFWs. The POLO processed 70 employment contracts this week, down from the 76 employment contracts processed last week. OECs issued reached 207 this week, versus 156 last week. Separately, the number of OFWs seeking POLO assistance decreased from 24 last week to only 10 this week, but OWWA membership was recorded at 118, up from the 89 recorded last week.
EUROPE AND THE AMERICAS
The POLO in Geneva, Switzerland, reported that OFWs remain unaffected by the oil price decline; but continues to monitor potential displacement from the ILO, UNDP, and other international organizations.
In Washington, DC, the POLO reported that OFWs remain unaffected by the oil price decline. It recorded two job orders processed during the week, down from four job orders in the previous week; 21 employment contracts processed, one less than the 22 contracts processed last week; and five OECs issued, a decrease from the eight OECs issued last week.
The next update will be Monday, 7 March 2016. For questions, please contact the Labor Communications Office at 527-3446.