The Saudi labour ministry is taking punitive measures against contractor Saudi Oger following workers’ complaints over the non-payment of salaries, reports say.
The ministry will stop providing social security and passport services to the contractor after some of its employees claimed to be owed four months pay, resulting in financial difficulties.
Formed in 1978, Saudi Oger is a privately owned conglomerate. Among its current projects is the the King Abdulaziz Center for World Culture (pictured), commissioned by Saudi oil company Saudi Aramco and due to open this year in Dammam.
The labour ministry has formed a committee to address the non-payment issue and will work with the local authorities in Riyadh in an attempt to resolve the matter, Arab News reported last week.
In an internal memo to staff the company promised in February that a month’s salary would be paid to each worker within a week, but Arab News quotes local media as reporting that the company failed to meet that commitment.
Saudi Oger has claimed that the salaries were delayed because it had not received payments for work done.
The pay dispute comes as Saudi Arabia struggles to deal with a ballooning budget deficit caused by the low oil price. Late last year it was reported that contractors there were being asked to cut their costs by 20%.
According to Arab News the labour ministry has vowed to settle the salary dispute either by paying off the employees or clearing the arrears in instalments.
Photograph: Among Saudi Oger’s current projects is the ambitious King Abdulaziz Center for World Culture, commissioned by Saudi oil company Saudi Aramco and designed by Norwegian architecture firm, Snøhetta. It is due to open this year in Dammam ( King Abdulaziz Center)
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It is a common problem in this country too. Smaller sub-contractors at the mercy of the bigger companies who decide when to pay and how much, this has the knock on effect of firstly delaying payment to individual workers and eventually sending the smaller companies out of business. Payment Terms aren’t worth the paper they’re written on!