Lebanese labor laws force employers into 'Catholic marriages' for life
By Lysandra Ohrstrom
Daily Star staff
BEIRUT: When the processing plant of Lebanon's largest dairy was destroyed by Israeli bombs last July, the country lost its main supplier of fresh milk and about 200 Liban Lait employees lost their jobs. Last fall the former employees asked to return to work, said Mark Waked, the marketing manager of Liban Lait, but the dairy no longer had a functioning factory. With no other option, the workers sued the company under a provision of Lebanon's antiquated labor legislation. Waked remains confident that "they don't have a case against us," but the pool of employees demanding compensation continues to expand. Regardless of the victor, none of the parties in the suit feels protected by the nearly 70-year-old Lebanese labor law, which does not adequately safeguard the rights of workers or employers. "The Labor Ministry trying to get compensation for them, but we did not lay anyone off. It was a force majeur, so how are we supposed to hire them, when we are not working? We used to distribute with 40 trucks now we have five," Waked told The Daily Star. Liban Lait has been gradually rehiring portions of its staff as regular operations resume, he said, and plans to call back factory employees as soon as the new plant is functioning. Waked called recent reports in the Lebanese media - faulting Liban Lait for not using the $5 million in compensation allegedly received last year, to pay accidental indemnities - "completely fabricated." "We had a gentlemen's agreement with an Arab bank that wanted to invest $5 million in our company, but it never took effect," Waked said of a rumor that Liban Lait was the only damaged factory to win reconstruction assistance at last year's Arab League Financial Summit. "Personally I think the current system is unfair because it's impossible for a company to fire workers and it always favors the employee over the business," Waked argued.
According to Article Five of Lebanese labor law, if a company submits proof of bankruptcy, it is not obligated to pay workers end-of-service indemnities - unemployment indemnities do not exist. But the law is rarely invoked, and the private sector routinely faults the inflexible labor market for low productivity and high unemployment rates. The government has no policy regarding job promotion, said president of the Lebanese Industrialists Association (LIA) Fadi Abboud. The government should offer incentives to companies to expand their workforces, and Parliament must approve a new labor law allowing employers the freedom to hire and fire workers, he said. "The concept of a Catholic marriage where you employ people for life is not realistic anymore," Abboud said. "Every reason to fire people is considered unfair dismissal in Lebanon. I asked the Labor Minister [Tarrad Hamadeh] 'when was the last time you accepted an economic justification for a dismissal?,' and he could not remember." Hamadeh admitted that his office usually intervenes on the side of the employee in compensation suits, and that few businesses successfully file claims under Article Five. "These guys want to return to slavery, to a system like the one during the Ottoman Empire," he said of Lebanese businessmen. But workers' advocacy groups say a dearth of employment opportunities and an undependable social security system necessitates extra protection for workers. According to a study released Monday by the International Labor Organization, there has recently been a move by both government and employers to introduce labor-market flexibility through less rigid hiring and firing laws. Labor unions are supportive of this reform, says the report, as long as it conforms to international labor standards and flexibility is balanced by improved workers' security to mitigate adverse affects vulnerable segments of population. "Strengthening ... collective bargaining would allow for a better match between wages and productivity ... and improved employment protection far beyond the level guaranteed by present law," ILO said.
By Lysandra Ohrstrom
Daily Star staff
BEIRUT: When the processing plant of Lebanon's largest dairy was destroyed by Israeli bombs last July, the country lost its main supplier of fresh milk and about 200 Liban Lait employees lost their jobs. Last fall the former employees asked to return to work, said Mark Waked, the marketing manager of Liban Lait, but the dairy no longer had a functioning factory. With no other option, the workers sued the company under a provision of Lebanon's antiquated labor legislation. Waked remains confident that "they don't have a case against us," but the pool of employees demanding compensation continues to expand. Regardless of the victor, none of the parties in the suit feels protected by the nearly 70-year-old Lebanese labor law, which does not adequately safeguard the rights of workers or employers. "The Labor Ministry trying to get compensation for them, but we did not lay anyone off. It was a force majeur, so how are we supposed to hire them, when we are not working? We used to distribute with 40 trucks now we have five," Waked told The Daily Star. Liban Lait has been gradually rehiring portions of its staff as regular operations resume, he said, and plans to call back factory employees as soon as the new plant is functioning. Waked called recent reports in the Lebanese media - faulting Liban Lait for not using the $5 million in compensation allegedly received last year, to pay accidental indemnities - "completely fabricated." "We had a gentlemen's agreement with an Arab bank that wanted to invest $5 million in our company, but it never took effect," Waked said of a rumor that Liban Lait was the only damaged factory to win reconstruction assistance at last year's Arab League Financial Summit. "Personally I think the current system is unfair because it's impossible for a company to fire workers and it always favors the employee over the business," Waked argued.
According to Article Five of Lebanese labor law, if a company submits proof of bankruptcy, it is not obligated to pay workers end-of-service indemnities - unemployment indemnities do not exist. But the law is rarely invoked, and the private sector routinely faults the inflexible labor market for low productivity and high unemployment rates. The government has no policy regarding job promotion, said president of the Lebanese Industrialists Association (LIA) Fadi Abboud. The government should offer incentives to companies to expand their workforces, and Parliament must approve a new labor law allowing employers the freedom to hire and fire workers, he said. "The concept of a Catholic marriage where you employ people for life is not realistic anymore," Abboud said. "Every reason to fire people is considered unfair dismissal in Lebanon. I asked the Labor Minister [Tarrad Hamadeh] 'when was the last time you accepted an economic justification for a dismissal?,' and he could not remember." Hamadeh admitted that his office usually intervenes on the side of the employee in compensation suits, and that few businesses successfully file claims under Article Five. "These guys want to return to slavery, to a system like the one during the Ottoman Empire," he said of Lebanese businessmen. But workers' advocacy groups say a dearth of employment opportunities and an undependable social security system necessitates extra protection for workers. According to a study released Monday by the International Labor Organization, there has recently been a move by both government and employers to introduce labor-market flexibility through less rigid hiring and firing laws. Labor unions are supportive of this reform, says the report, as long as it conforms to international labor standards and flexibility is balanced by improved workers' security to mitigate adverse affects vulnerable segments of population. "Strengthening ... collective bargaining would allow for a better match between wages and productivity ... and improved employment protection far beyond the level guaranteed by present law," ILO said.
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