Classic Middle East BS.....your passport is the property of your country's government, be it the Ministry of Foreign Affairs or their equivalent. For years it has been a practice in the Gulf for employers (sponsors) to 'hold on' to their foreign employees passports under the guise of safekeeping or some other pathetic excuse in order to control the movements and whereabouts of their employees (read slaves). Obviously it is difficult to hang on to Pilot's passports, however many other people have had to put up this nonsense.
I believe if you break a law then the relevant and bonafide authority (police, the courts or immigration) are allowed to hold your passport if there is a travel ban issued etc. It seems that many countries accept this, however the practice of an employer or anybody else withholding your passport is in clear contravention of the laws of the issueing state and standard international diplomatic protocol. Yes, a call to your embassy will usually sort this out....of course it all depends on where you are from I suppose.
Well amigos, that's my interpretation after several years of observing this type of BS. Can GF hold your passport? Probably not under local law and definately not under international charter etc., however this has never stopped them trying until an embassy gets involved usually.
(should have finished my law degree and stayed home!!)
Ciao