FATES HINGING ON INTERNATIONAL FUNDING
Improving INGO employee job security to enhance economic stability
In Lebanon, the non-governmental sector has been booming since 2011 from the year the Syrian refugees influx started. This sector is employing Lebanese staff and paying them in real US dollar currency, enabling them to support their families and benefit the surrounding local economy. However, employees of international non-governmental organizations (INGOs) on fixed-term or consultancy contracts do not enjoy currently enough job security and so the trickle-down effects of their salaries are lost. In 2020 alone, the Lebanese economy lost 220,000 jobs and among those jobs were INGO employees working on fixed-term contracts and consultants. That fact has a high negative impact on the local economy. Helping the INGO employees and consultants retain their jobs enhances the local micro economy, and retains their talents in the country. Hence, the article discusses the potential increase of job security and stability for the INGO employees on fixed-term contracts and consultants.
Non-governmental organizations (NGOs) working in Lebanon are classified into local NGOs, United Nations-based NGOs, and international
INGOs. The current article discusses only the jobs of INGO employees since most of them pay the salaries of their employees in US dollar banknotes (“fresh” dollars) they can use to purchase goods priced in US dollar currency or exchange at the daily black market rates, which, as at end-August 2021, hovers between 18,000 and 20,000 Lebanese pounds to the dollar, compared to the bank rate of 3,900 Lebanese pounds to the dollar (the “lollar” rate). There are around 60 INGOs in Lebanon who employ people based on three types of contracts: fixed-term contracts, open-ended contracts, and consultancy contracts. Almost 100 percent of these INGO employees start on a fixed-term contract for the first two years, and less than 5 percent of the total number of employees are hired as consultants. INGOs activities in Lebanon started to spread out rapidly with the significant increase in the influx of Syrian refugees as of 2012. The mandate of those INGOs is based on humanitarian objectives where their role is to implement social, nutritional, hygiene, and educational programs targeting mostly Syrian refugees and host communities in underserved areas. In
addition, with the emerging economic crisis, their role started to encompass social programs targeting the hosting communities within the Lebanese society in order to help them surpass the crisis. After the August 4, 2020 explosion, the INGOs increased their support to the hosting communities within the Lebanese society through the local NGOs.
ON FUNDING AND JOB INSECURITY
INGOs pay the contractual agreements of their employees and consultants out of funds allocated by donors that include general donors such as the World Bank and European Union, UN-based donors (UNHCR, UNDP, UNICEF, OCHA, etc.), state-let donors such as the USAID, BPRM, LAFD, WPA, BMZ, Australian Aid, NORAID-SIDA (Swedish) and CIDA (Canadian), as well as individuals and corporations. Contractual agreements between the INGOs and their employees and consultants last as long as there are funds. Those funds granted to the INGOs working in Lebanon, were on an increasing slope until 2017. After 2017, the INGO funds started decreasing drastically and got diverted into surrounding countries having also a Syrian refugee influx, mainly Jordan and Turkey.
Whenever there is a shortage in funds due to a decrease in donations, consultancy agreements and fixed-term contracts will not be extended after reaching their deadline. In addition, employees on open-ended contracts will be subject to article 50 of the Lebanese Labor Law, which allows for a massive employee downsizing in case of lack of funds. Thus, the INGOs employees who are on open-ended contract are notified at least a month ahead that their contractual agreement is ending.
The INGOs operating in Lebanon are compensating their employees and consultants in real US dollars. This compensation enhances the micro Lebanese economy where it has a role in decreasing the inflation through making US dollar banknotes more available. In addition, it increases the purchasing power of the INGOs employees and consultants. Since some of this monetary compensation is spent in the local market, third parties (suppliers, service providers, currency dealers) are also benefiting from this inflow of US dollar banknotes.
Compensation costs for INGOs’ employees and consultants represent 20 percent to 25 percent of the total allocated funds, with the remainder going towards program implementation and logistics. The majority of this compensation includes the basic salary, bonuses, NSSF subscriptions, benefits, and cost of transportation. Whenever there is a lack of funds, it drastically affects employees and consultants where their contractual agreement comes to an end. Thus, that fact affects negatively the local micro economy since less US dollar banknotes would be available for the local market. Stopping the contractual agreements of the employees and the consultants impacts also the remaining ones where this increases their level of job insecurity and reduces their motivation.
AMENDING THE LABOR LAW
Whenever there is a shortage in funds due to a decrease in donations, consultancy agreements and fixed-term contracts will not be extended after reaching their deadline
Helping INGO employees and consultants maintain their jobs and income in real US dollars provides a boost to the local micro economy. This help comes in the form of improving the legal framework and legal clauses that ensure enhanced job contractual agreement security. As matter of fact, the Lebanese Labor Law dates back to 1946 and few improvements have been incorporated since then. Moreover, legal clauses within the Labor Law related to employees and consultants are left to various unclear interpretations. The following are points that can be factored in the current Lebanese Labor Law in order to strengthen the job contractual agreements conditions of the employees and consultants working at the INGOs:
1. Encouraging INGOs to establish a common union or association, which would represent the interests and welfare of the employees and consultants working with the INGO. Here, each INGO can elect one or several employees on an open-ended contract to represent the welfare of the remaining INGO employees within the union or the association. This election of the representatives is considered official. The union board itself is elected by the representatives of the INGOs employees and the decision of the board is binding for the member of this union or association.
Actually, there is currently a similar association in Lebanon. It is called the Lebanese Humanitarian INGO Forum (LHIF). LHIF currently counts 60 INGOs member, where they meet regularly in order to share information and knowledge and for each member there is an annual fee. However, the objectives of LHIF are to discuss financial and strategic perspectives. Thus, the objectives of LHIF are not oriented towards the welfare of the employees. Moreover, the decision of LHIF are not binding to its members.
Helping INGO employees and consultants maintain their jobs and income in real US dollars provides a boost to the local micro economy
2. Currently, the compensation and benefits scheme is standardized among the employees working under open-ended contracts and fixedterm contracts within the INGOs, however, the former enjoy more job security and longevity than their colleagues on fixed-term contracts. To counterbalance that fact, there is a need to restructure that compensation scheme as per the below points: • Restruc turing the fixed-term contract agreements to include more benefits, such as better health insurance schemes and higher transportation refunds. • Restructuring the benefits of the staff on fixed-term contracts to turn them into monthly cash benefits such as end-of-service indemnities and yearly bonuses. • Restructuring the compensation scheme for fixedterm contract employees in order to increase their salary since they are subject to a higher risk of unemployment that employees on open-ended contracts.
3. Including a clause in the Lebanese Labor Law to standardize fixed-term contracts with a minimal duration of, for example, six months, secures a longer employment period for the INGOs employees. All the employees at the INGOs start with a fixed-term contract before it is turned into an open-ended one after two years of employment with the same INGO. These fixed-term contracts have frequently a duration of less than six months.
4. In order to provide a higher sense of job security to the INGOs’ national employees, the Lebanese Labor Law could include a binding clause mentioning clearly the percentage of foreigners each private organization and INGO can hire. The current Lebanese Labor Law does not stipulate a certain mandatory percentage of foreign employees working within the private organizations and INGOs. What practically happens, upon hiring a foreigner on a local employment contract, the Ministry of Labor requests a list of the employees’ names and nationalities. This list is requested for issuing work permits. Here, it is left to the discretion of the ministry to assess how high is the percentage of the foreigners working at the organization before issuing the work permit.
As per the International Labor Organization (ILO), in 2017 the foreign workers ratio was 7.6 percent worldwide and 17 percent in the US. Ideally, this percentage in Lebanon should be 10 percent out of the total number of employees.
5. The current Lebanese Labor Law, specifically article 50 stipulating how to rehire employees who were laid off due to downsizing resulting from a lack of funding, needs to be amended. Article 50 mentions that the employer is obliged to grant the priority of rehiring these employees within a year whenever funds are available again. That article mentions also that the employer is obliged to give a one-month notice before the discharge from work. Moreover, article 50 stipulates certain criteria upon which employees are chosen to be downsized. Those criteria are generalized, similar at each situation, and it is unclear how they are chosen.
Several steps in article 50 can be incorporated in order to increase the job security and motivation for the employees in general and at the INGOs in particular: • Providing the employees to be laid off for lack of funding with a notice period longer than one month. • Ensuring the criteria upon which the employees to be laid off are chosen are situational and not standardized. In addition, the employer has to show more transparency and clarity of how those criteria are chosen. • Ensuring the rehiring process of downsized employees is clear and transparent. Moreover, giving the priority to rehire the downsized employees has to be based on two conditions: a) employee good performance; and b) acceptance of both parties (the employer and the INGO employee.