Showing posts with label uae. Show all posts
Showing posts with label uae. Show all posts

Sunday, November 16, 2014

GCC-wide ban for deported expats

Dubai - Glittering Life
Kuwait The Pearl of Middle East

Deporting country can now share deportee's data with rest of the states DUBAI Gulf Co-operation Council (GCC) countries have started applying a law that bans expatriates deported from any of the six countries from entering the rest of them, according to Manafez Dubai, the official newsletter of the General Directorate of Residency and Foreigners Affairs Dubai (GDRFA). A report in its September issue of the newsletter said the new law is based on the GCC security pact. "Moreover, the country which deports an expatriate will be allowed to take the deportee's fingerprints and share the information with the rest of the GCC countries," it said.
It said the GCC countries are coordinating efforts to control drugs with exchanges of information, including names of smugglers, their modus operandi and data.

Case to case

O.V. Musthafa Zafeer of Musthafa & Almana International Legal Consultants said: "The GCC-wide entry ban for deported expats is not automatic, except in drug-related cases. Otherwise, it is applied on a case-to-case basis."
Tina Thapar of Al Midfa & Associates said: "The security pact of 1994 was amended in 2012 and thereafter implemented for major crimes such as drugs, money laundering, murder etc."

Citing some cases, she said a man implicated in a drug case in Saudi Arabia was deported from the UAE without a trial based on the judgment issued by the Saudi court. Another man in South Africa, who defaulted on alimony in the UAE, wanted to relocate to Bahrain. He had read about the GCC law, so he found out if there was an arrest warrant against him in the UAE and got his name cleared before flying to Bahrain.

© Gulf News 2014

Monday, January 21, 2013

What to Do When: Employer does not pay your salary in time

What to Do When: Employer does not pay your salary in time
UAE Labor Ministry Official on what action to take in case of violation of terms of contract - including vacations, overtime and gratuity
What should an employee do when faced with an employer who has not aid his/her salary on time?
Also, in case of violation of terms of contract concerning vacations, overtime, or gratuity, what course of action can an employee take?
An official at the Ministry of Labour states that an employee has the right to file a complaint against the employer.
This can be done through the ministry's website
The employee can also call the toll-free number 800665, which allows him/her to file a complaint or to inquire about all his rights guaranteed by the Labour Code.
The employee can also e-mail the complaint to
The Ministry of Labour official also clarified that its call centres are equipped to offer a wide variety of services to employees and employers.
Call centres are equipped to give information on procedures and laws, including the wage protection system (WPS), housing requirements for workers and working hours.
Employees can also track their complaints on the website.
Through a service called e-natwasal, available on the website, an employee can review his labour contract and make a photocopy of it.
Role of MoL
The official stated: "In case of receiving a complaint the MoL will summon the parties and hear their points of view and try to reach a satisfactory solution for both.
"If the ministry cannot reach a solution it will refer the case to the Labour Court.
The Mol eases the measures for laborers to file cases where the MoL briefed the procedures in one single action after it was based on three steps."
The Ministry of Labour offers services in several languages including Arabic, English, Russian, Filipino, Hindi, Somali, Afghan, Persian, Punjabi, Malayalam and Tamil.
Cassation Court verdicts
Verdicts of the UAE's Courts of Cassation affirm that nonpayment of salaries in the proper time is considered arbitrary dismissal, which then requires compensation.
Also the Courts of Cassation confirm that an employee who is forced to resign because of non-payment of his wages for more than two months is deemed to have been unfairly dismissal by the employer.
Where the employer fails to pay the worker's wage and in such case it is a breach of contractual obligations, the employee should be compensated by the equivalent of 3 months' basic salary.
The statistics of the MoL show that the average number of daily telephone calls received by its call centres is 2,500.
According to latest statistics on the ministry's website, the number of visitors exceeds 29 million.
© Emirates 24|7 2013
© Copyright Zawya. All Rights Reserved.

Thursday, December 13, 2012

Immigration to Canada under Skilled Category

Federal Skilled Trades Class launch next month

3,000 applications will be accepted under the programme in 2013

Canada's Minister for Citizenship, Immigration and Multiculturalism, Jason Kenney, announced the launch of the long-awaited Federal Skilled Trades Class (FSTC).

The launch of the long-awaited Federal Skilled Trades Class (FSTC) will be on January, 2, 2013, announced Canada's Minister for Citizenship, Immigration and Multiculturalism, Mr. Jason Kenney.

A total of 3,000 applications will be accepted under the program in 2013.

The programme was only recently introduced by the Canadian government as part of the three-pronged approach, which added the new programme to the already existing Federal Skilled Worker Class (FSWC) and the Canadian Experience Class (CEC).

The FSTC program will allow qualified and experienced trades people to immigrate to Canada, based on the following set of criteria:

Ability to work in one of the trades (up to 2 job offers or assessed qualifications);

Proficiency in official languages (minimum CLB 5);

Previous work experience in the selected trades (minimum 2 years full-time); and

Meet the employment requirements of the selected trade.

The new Skilled Trades Stream will help address serious labour shortages in some regions of the country, and support economic growth," Minister Kenney said. "For too long, Canada's immigration system has not been open to these in-demand skilled workers. These changes are long overdue and will help us move to a fast and flexible immigration system that works for Canada's economy."

Thursday, November 22, 2012

Construction Sector is Promising

Hiring in UAE: New jobs to open up in construction sector

One of the worst hit sectors during the recession phase may now offer many new jobs as construction activity picks up in the country.
According to a survey by, more than half of the recruiters (58 per cent) in the GCC predict new jobs in the coming quarter.
These recruiters are optimistic about the overall recruitment scenario. Most of these opportunities will be for the 8-15 years' experience levels.
Experts agree that this is one sector which looks very promising in the coming year. Trefor Murphy, Managing Director at Morgan McKinley believes this sector will show marked improvement in 2013. Agrees Toby Simpson, Managing Director at The Gulf Recruitment Group. According to him, "construction and engineering consultancy have shown growth, although largely due to projects outside the UAE."
Despite the optimism about the sector, a minority of the recruiters believe that we may see more layoffs in the coming quarter. The survey reveals that 19 per cent of the respondents forecast layoffs in the said period, whereas 13 per cent predicted no hiring.
"This clearly suggests that the global financial crisis has impacted hiring decisions of some companies who prefer to adopt a wait and watch mode," said the findings.
The widening gap between demand and supply for talented workers has become a major issue across the sector and those who predict new jobs said a talent crunch while hiring their employees is a problem they have to deal with. The findings suggest it is most difficult to hire talent at the 4-8 years' experience level.
"We are happy to see return of positive sentiments in the construction industry. We expect to witness things turning even better in the mid-term. Most of the GCC governments have large development projects in the pipeline and this should help provide the required boost to the construction industry," said Tarun Aggarwal, Business Head,
As new jobs open up in the sector, employees can also expect increments. Even in 2012 many employees got pay hikes. Majority (54 per cent) of the recruiters surveyed said that the range of increments were within the range of 5 per cent and 10 per cent. About 18 per cent recruiters said that they got less than 5 per cent increments.

Monday, November 5, 2012

Mobile Phone Bills can Land you in Jail

Unpaid UAE mobile-phone bills can result in travel ban or arrest: TRA official
My Number My Identity' campaign aimed at stopping misuse of mobile phones
Many problems are caused by the misuse of mobile phones especially by people who are not the real owners of the numbers, said Majid Sultan Al Mesmar, Deputy Director-General of the Telecom Regulatory Authority (TRA).
Al Mesmar said mobile phone users are sometimes forced to pay tens of thousands of dirhams as phone tariffs incurred by others. Many cases relating to misuse of mobile phones are in the courts, he added.
Al Mesmar said Etisalat and du are obliged to cut service if an owner of a number does not settle his bill.
Both the service providers are entitled to issue notices to owners of the mobile phones numbers who have accumulated large amounts on their bills
Such notices could expose them to travel bans or arrest upon arrival in any UAE port.
It is for these reasons that the TRA obliged etisalat and du to launch the 'My Number My identity' campaign aimed at controlling the misuse of phone numbers.
The real owner of a number can also face charges of defamation and libel if the person who has borrowed his SIM card misuses it. Those who do not register their numbers could face disconnection of the service which will be restored only after they register.
The user will be given a deadline of six months if he wants to cancel a number. After this deadline, the service provider can disconnect service.
To register his number, the owner has to be personally present in the office of the service provider since his signature is required on the form, he added.

Monday, October 29, 2012

The End of Service Gratuity according to UAE Labor La w: is it the beginning of the end?

The End of Service Gratuity according to UAE Labor La w: is it the beginning of the end?

End of service gratuity ("ESG") is a topic that is currently stirring much debate. In particular, it was recently reported that after conducting a study into the ESG system, the World Bank recommended the establishment of a pension fund for expatriate employees to replace or supplement ESGs.
The ESG explained
ESG is a sum of money that an employer is lawfully required to pay an employee upon the termination of the employment relationship, subject to the employee satisfying certain conditions that are set out in the UAE Labour Law. The ESG scheme was introduced 40 years ago to ensure that when employment relationships were terminated, employees without pension benefits received a lump sum payment to assist them during the period following termination or for them to put towards their savings.
The payment is based on the employee's basic salary and length of service, although it may be reduced depending on the circumstances of the termination of employment and where the employee was working (see "reduced amount" section below). The calculation does not take into account payments that are additional to basic salary, such as housing and car allowance. However, where an employee receives a guaranteed or regular commission payment, this may be included within the calculation of basic salary for the purposes of the ESG calculation.
The amount
Employees with at least 12 months service are entitled to 21 calendar days' salary for each year of service in the first five years of employment and 30 calendar days' salary for each year of service worked beyond five years. The ESG payment is calculated on a pro-rata basis and therefore employees receive credit for the entire period of service. Importantly, the calculation is applied to the employee's salary at the time of termination, which can result in the ESG being substantial for long serving employees. The maximum ESG entitlement cannot however exceed two years salary.
Reduced amount
Where individuals are employed in onshore organisations within the UAE (and some of its free zones), reductions may be applied to their ESG entitlement should they resign from their roles. In particular, where an employee on a limited term contract with less than five years service resigns prior to the expiry of the fixed term, the employee is not entitled to an ESG payment whatsoever. In the case of an employee on an unlimited term contract, having been employed for more than one year but less than three years, he will receive one third of the full ESG entitlement. Where the period of continuous service is more than three years but less than five years the departing employee will be entitled to two thirds of the full ESG. Once an employee has accrued five years service, either on a limited or unlimited term contract, there will be no reduction pursuant to a resignation.

Saturday, October 13, 2012

UAE Labor Law Update

Employment relationships in the United Arab Emirates (UAE) are generally regulated by the UAE Federal Law No. 8 of 1980, Regulating Labour Relations, as amended (Labour Law) together with regulations promulgated under that law.

The Labour Law applies to all employees working in the UAE, whether national or non-national, with the exception of certain categories of people. One of the exempted categories are employees working in the Dubai International Financial Centre (DIFC) are subject to the DIFC Employment Law No. 4 of 2005 (Employment Law). The legislative regime in the DIFC (save for certain laws such as criminal and immigration) is independent from the UAE. The DIFC has its own laws and regulations which govern commerce within the DIFC supported by its own independent English language common law court system.

The UAE faces relatively unique challenges, in that its population and workforce are predominantly made up of expatriates (for example, figures released last year indicated that 93 percent of the private sector workforce was made up of expatriates). The UAE must therefore balance the need for access to jobs and training for its local population and the retention of expatriates, particularly in light of the recent changes provoked by the economic climate.

Key developments

It is possible to characterise recent key developments in the laws as addressing certain areas which, as identified above, result from the UAE's unique position and broadly fall into three main categories, (1) management of the movement of workers; (2) protection of UAE nationals; and (3) developing practices to ensure that the UAE is in line with international standards for workers. Each of these is dealt with in turn.

1. Management of the movement of workers

Labour Bans

Prior to January 2011, the Ministry of Labour (Ministry) imposed an automatic 6-month ban on all expatriates leaving their employer. This applied to all employees falling within their jurisdiction (i.e. outside the free zones or the DIFC) and could only be lifted for those individuals with more than one year's service by way of a "no objection certificate" provided by the former employer and/or payment of a fee (depending upon length of service). However, during the economic downturn of 2009/2010, the automatic ban affected employees who had been made redundant by their employer, and this in turn resulted in the loss of some skilled workers with local UAE knowledge.

From January 2011, the practice has been amended and in accordance with a Ministerial resolution, the automatic ban will not be imposed in certain circumstances, having regard to issues such as length of service, level of expertise, and reason for dismissal, including whether the termination is due to a business reorganisation. In addition, in practice, the Ministry has further relaxed the enforcement of the employment ban provisions, so that at present, employees are free to move between employers (subject to any post-termination restrictions or other issues raised before the Ministry). However, the Ministerial resolution remains in place and may be more rigorously enforced in the future.

Internal work permits

In order to work in the UAE, an expatriate must obtain a residency visa and work permit. If the employee works within a free zone, their residency visa and ID card (work permit) is obtained via the relevant free zone (for example, DIFC).

The use of work permits is a further method by which the authorities are able to manage the movement of workers. From January 2011, the Ministry introduced five new work permits, which are applicable in cases where an individual already has a residence visa (or, in the case of a UAE national, is entitled to reside in the UAE). These permits are for a work transfer, temporary work, part-time work, cases where individuals are sponsored by family members and juveniles. One of the aims of the temporary work permit is to allow expatriates to obtain employment from another employer, pending the outcome of any ongoing litigation with their former employer (with whom they retain their visa). The part-time work permit is open for use by both expatriate and UAE nationals, although it is likely that one of the aims of the permit is to encourage UAE national females into the workforce. As with all permits, these are only issued upon the approval of the Ministry and therefore they are tightly controlled. The use of the part-time permit remains in doubt, in light of the fact that the Labour Law does not make any provision for part-time work and therefore minimum provisions applicable to full time employment (such as annual leave and sickness absence entitlement) will continue to apply to part time employees.


As noted above, all employees must have approval to work, by way of a work permit or ID card from the relevant authority. Prior to January 2011, employees falling under the Ministry jurisdiction were required to obtain express approval to continue working once they reached the age of 60 years. The age limit after which such express approval must be obtained has been increased to 65 years.

2. Protection of UAE nationals

The UAE operates a policy of "Emiratisation", which seeks to encourage private sector employers falling under the jurisdiction of the Ministry to maintain minimum levels of UAE nationals in their workforce. Whilst prior to January 2011, the Emiratisation policy was relatively indiscriminate, focusing purely on the number of UAE nationals in the workforce, a Ministry resolution which came into force in January 2011 now addresses the requirement for UAE nationals to fall within the white collar labour force and in particular, UAE nationals should make up 3 percent of the top three professional categories in an employer's workforce. The professional categories have to date been based upon educational qualifications, although there is a move towards reclassifying these, based upon professional experience.

Firms which maintain the required level of UAE nationals at the professional categories, and also comply with certain other Ministry requirements, are categorised as "First Class" companies, out of three possible categories. The Second Class categorisation also focuses on employee diversity, and seeks to limit the percentage of the workforce made up of one of three nationalities (Indian, Pakistani, and Bangladeshi). A Third Class categorisation includes those companies who receive a certain number of fines or "penalty points" issued by the Ministry for breach of Ministerial resolutions, as well as companies undertaking more serious activities, such as human trafficking. The category into which a company falls will determine the amount of fees and bank guarantees that the company will be required to pay to the Ministry, as part of the normal administrative requirements when obtaining Ministerial consent for the employment of staff.

UAE nationals have also enjoyed protection from dismissal, since 2009, when a Ministerial resolution was provides that the termination of UAE nationals in the private sector is unlawful if the employer does not first notify the Ministry of the proposed dismissal (and at least 30 days before the termination date). The Ministry will investigate whether the employment is being terminated for a legally valid reason. If the Ministry decides the termination is not for a legally valid reason, the employer is given 15 days to resolve the situation. In accordance with the resolution, the termination will not be valid where (a) the employment is being terminated for a reason other than one of ten specified reasons for cause listed in the Labour Law (in practice, the ten reasons listed in the law are very narrowly interpreted); a non-national is undertaking the same role (in other words, the non-national should be dismissed first); or (c) where the UAE national has not received all end of service benefits due to them.

3. Development in line with international best practices

Although it remains the case that collective bargaining and strike action remain illegal in the UAE, there have been a number of recent developments intended to give protection to employees, particularly blue-collar workers who may lack the ability to challenge unfair practices. Recent key developments are:
·         In 2009, the Wage Protection System (WPS) was introduced and came into effect in 2010. This applies to all employees falling within the Ministry jurisdiction. Employers are required to pay employees' salary in UAE dirhams through the WPS. This is intended to ensure that employees are paid the correct salary amounts, and that the salaries are paid on time.
·         Manpower supply companies are strictly regulated by the Ministry and a Ministerial resolution in 2010 revised the criteria for the issuance of licenses for such entities. The key requirement is that the owner (whether an individual or an entity) must be a UAE national. The resolution was issued in response to complaints that certain employees recruited by manpower supply companies offshore were badly treated or mislead over employment opportunities. It was also brought in to stamp out illegal practices by certain entities in the UAE that provide manpower without being appropriately licensed.
·         Although the Employment Law contains anti-discrimination protection, the Labour Law only contains positive discrimination provisions. However, the Twofour54 Abu Dhabi Media Free Zone introduced anti-discrimination provisions in its employment regulations in 2011, which state that the free zone aims to create an environment where employment and advancement is based on merit and an employee is not treated less favourably by reason of gender, marital status, race, religion or disability. The regulations also impose an obligation on companies operating in the free zone to be guided by the principle of non-discrimination when employing employees.
·         The DIFC Court offers employees an informal forum (the Small Claims Tribunal) in which to bring employment claims. In 2011, the SCT extended its jurisdiction to all employment claims which equal or are less than AED200,000 (approx.. US$ 55,000). In addition, it is possible for the SCT to hear all employment claims (regardless of size of the amount of the claim), upon consent by both parties.
Looking forward

In light of recent socio-economic and political developments in the region, it is likely that the UAE will remain one of the prime destinations for expatriates but at the same time the UAE government will be keen to continue to ensure that its nationals are protected adequately. After a relatively busy year in 2011 on the legislative front, it is envisaged that the authorities will consolidate the changes implemented.

There has been some discussion of implementing new schemes to encourage Emiratisation, for example, by partnering with the private sector to train and employ UAE nationals for a minimum period in return for subsidies provided by the government.

Pensions for expatriate employees are expected to be high on the agenda for 2012 following widely reported talks between the World Bank and the UAE. Currently expatriate employees are only entitled to statutory end of service gratuity (in the form of a lump sum payment) at the end of service which is calculated by reference to their period of service with employers in the UAE/DIFC. This is seen as one of the key requirements to make employment in the UAE more attractive to expatriates and encourage individuals with specialised expertise to remain in the UAE long term.

Along with the possible changes in the UAE legislation, the DIFC is also likely to implement amendments to the Employment Law. A consultation paper on proposed amendments to the Employment Law was launched in December 2011 with the consultation period ending on 14 January 2012. The proposed amendments are being viewed as an attempt to address some of the inconsistencies in and provide clarity on certain aspects of the law.

We expect that the Arab Spring will continue to have a positive effect in the UAE with more foreign investment earmarked for the region being channelled into the UAE, but at the same time it is likely that the focus will continue to be on the issue of jobs for UAE nationals.

Thursday, October 11, 2012

Illegal Removal of Employee and Its Compensation

Employees entitled to overtime allowance: court
Court alone can rule whether salary was paid as per job contract
If an employee puts in two or more extra hours of work a day, he is legally entitled to overtime payment in cash, according to the Dubai Court of Cassation.
And, in labour disputes, the court alone can decide whether a worker was paid the salary mentioned in the employment contract, the court said.
The court was hearing a case brought by a project manager against his employer. The court ruled that the employee is entitled to leave allowance of Dh31,000 because the employer could not prove that the allowance had been paid to him. The court also ordered payment of Dh62,500 to the employee, being the total of his dues and end-of-service benefits. The court also ordered the employee to be paid cash compensation for 652 hours of overtime at the rate of four hours per day.
The court rejected the company's justifications for not paying overtime allowance for more than two hours per day.
The plaintiff had filed a lawsuit against his employer in the Labour Court, pleading that the employee be ordered to pay Dh718,000 as compensation for unfair dismissal after eight months of service. He was sacked while on annual leave and the company had refused to pay him end-of-service benefits based on his monthly salary of Dh62,500.
The plaintiff defined his dues as the last month's salary and one month's salary for warning in addition to three months' salary as compensation for unfair termination.
He also demanded Dh169,000 as overtime allowance, Dh31,000 as annual leave allowance in addition to Dh28,000 as gratuity and Dh5,000 for return ticket to his country.
The Court of First Instance ordered the company to pay to the employee Dh62,500.
The plaintiff then went before the Court of Appeal which changed the figure to Dh276,000.
The employed then challenged this ruling before the Court of Cassation, saying the employee's salary is Dh32,000 as per the employment contract, not Dh62,500 as claimed by the employee.
The company also challenged the calculation of overtime of 652 hours because that means the employee was working more than two additional hours a day in violation of the Labour Code.
The Court of Cassation rejected the company's arguments, saying the burden of proving whether an employee was paid salary, overtime and other benefits is on the employer. In this case, the employer had failed to furnish sufficient proof.
The court also said the bank's statement of account showed that the employee's monthly salary was Dh62,500 and not Dh32,000 as claimed by the company.
Regarding overtime, the court rejected the employer's arguments on the basis of Article 67 of the Labour Code which restricts overtime to no more than two hours a day except in cases of work to prevent massive loss or serious accident. Also, the plaintiff had submitted overtime statements certified by the employer, the Court of Cassation said in its verdict.

Monday, September 10, 2012

Six-month work ban applies evenly to men and women

Friday 7 September 2012

JEDDAH: The National Committee of Workers and businessmen have agreed on providing two-day weekly off for employees in the private sector, said Abdul Rahman Al-Zamil, head of the team of businessmen that attended a social dialogue forum on the issue.

"A closed-door meeting of representatives from the three parties have agreed that the weekly off in the private sector would be two days and but did not decide the days of the weekend," said Al-Zamil, who is a prominent businessman and industrialist.

There were proposals to make Friday and Saturday weekly holidays for the benefit of businesses having contacts with international companies and agencies. Al-Zamil expressed his hope that an agreement would be reached on bringing down weekly working hours to 40, a demand that was made to attract Saudi workers to private firms. However, some businessmen have suggested making it 45 hours.

"Most members of our team have agreed to a one-shift duty with work starting at 10 a.m. and exempting Makkah and Madinah from limiting working hours," Al-Eqtisadaih business daily quoted Al-Zamil as saying.
A survey conducted by the Ministry of Labor and King Abdul Aziz National Dialogue on working hours has revealed that shortening working hours in the private sector would encourage citizens to work in that sector.

The study, which covered 3,662 respondents from across the Kingdom, shows that the long working hours is the main reason for the reluctance of young Saudis to take up offers in the private sector. A majority of participants in the study did not support Saturday to be one of the proposed two-day weekend, although they did support a two-day weekend to make it more attractive for Saudis to work in the private sector.
Employment issues and unemployment problems are the main concerns of 49 percent of Saudi youth who took part in the survey. Housing and rent issues came second, concerning 32 percent of participants. 

Ibrahim Al-Moaiqali, director general of the Human Resource Development Fund, said Wednesday's dialogue did not reach any consensus on how to confront the challenges facing the private sector and reach solutions that would make the job market more attractive to Saudis.

He emphasized the need for taking a balanced decision to protect workers' rights as well as to boost the national economy. "The decisions should not affect the national economy and the Kingdom's businesses. Private sector investments are a key factor to accelerate economic growth," he added. He said an agreement on weekly off days and weekly working hours would solve one of the major obstacle facing Saudi workers.

Ahmed Al-Humaidan, secretary-general of the dialogue forum and undersecretary at the Labor Ministry, said the ministry has no plan to impose its decision on the private sector. "We organized this forum to reach a consensus on the issue," he pointed out.

He said the Council of Saudi Chambers, the National Committee of Workers and the Labor Ministry should work together as partners to achieve job market stability and accelerate economic and social development.
The dialogue forum discussed four important papers on the effect of working hours on institutions; unification of working hours in the public and private sectors; daily working hours in the wholesale and retail trade; and distribution of daily working hours.
© Arab News 2012

Sunday, May 20, 2012

Labour ministry contract supersedes all other documents

Sunday, May 20, 2012
Dubai: The Ministry of Labour contract takes precedence over all agreements between employer and employee and is the only document that is recognised by the authorities, the ministry has warned.
A senior labour ministry official told Gulf News any contract between the employer and the employee other than the labour contract will not be taken into consideration.
The warning comes after some employees have complained that they are being deprived of their rights as laid down in the labour ministry’s contract.
A group of insurance specialists have alleged that their company is cheating employees by forcing them to sign a letter of intent and depriving them of rights guaranteed by the labour ministry’s contract, including basic pay and gratuity.
Paying back commission
The employees who work for Nexus Insurance Brokers told Gulf News that the company was unwilling to accept resignation letters unless the staff hand over all commissions they earned last year.
Documents obtained by Gulf News show the employees have a limited labour contract under which they are given a basic salary of Dh0.001 and Dh6,000 for accommodation, transportation and other allowances.
The letter of intent, which the insurance specialists were forced to sign, says employees were issued a labour contract because it is a requirement of the UAE law. The principal purpose of the labour contract will be to “sponsor employees’ activities in the UAE and does not constitute in part or full their contract with Nexus”.
“All benefits mentioned in the labour contract issued by the labour department and any other benefit such as accommodation, transportation, leave, air ticket, leave salary, entertainment, gratuity and other benefits are in fact included in commission, and may be stated separately in the labour contract only for the purpose of enabling you to sponsor your family and domestic help in the UAE,” the letter of intent says.
R.J., an employee, said they were forced to sign an undertaking that if the company was required by law and the labour contract to pay a certain amount to them, the employees must repay the company commission and collection fees. He alleged that the company does not accept resignations till employees pay back what they have earned in the form of commissions in their last year at work.
“Unless we give them the last year’s earnings, they will not cancel our visas,” B.F., a former employee, said. “When I resigned, the company handed me a letter that said my resignation would be accepted, but I must first pay a cheque amounting to my last year’s earnings. Only then would they give me a release letter.”
Employer reaction
Hussain Ayyash, legal and human resources director at Nexus Insurance Brokers, told Gulf News that all the letters of intent are legal and issued to protect the company’s rights. “Our employees work on commissions and they earn a huge amount of money. As the employees work on commissions, they have no labour rights. We issue employees a labour contract as a formality as we have to issue it. The labour contract contains certain allowances, which helps employees sponsor their families. But we do not work according to the labour contract. For us, it does not exist.”
He said he had filed a complaint at the labour ministry against some employees who had recently resigned and joined competing firms. “We also have to take back commissions they earned in the last year of work with us,” Ayyash said.
Gulf News has learnt that the labour court recently ordered Nexus Insurance Brokers to pay Dh20,000 as end of service benefits to a British consultant who resigned and complained against the company to the labour ministry.
Mohammad Bin Dakhin, Director of Governmental Communication at the labour ministry, told Gulf News that any agreement between the employer and the employee other than the labour contract would not be taken into consideration. “In case of dispute between the employer and the employee, the ministry will only consider the ministry’s contract,” he said.
Bin Dakhin said a letter of intent or internal contracts between the employer and employee are not accepted. “It is illegal to consider that the labour contract has been issued only to allow employees to sponsor their families. Denying workers the rights mentioned in the labour contract is illegal,” he said. Bin Dakhin said that any contract between the employer and employee not signed and approved by the labour ministry is not a legal document.
By Bassma Al Jandaly, Senior Reporter
© Gulf News 2012. All rights reserved.

Monday, April 30, 2012

Labor Law Changes in U.A.E.

Ministry threat for employers forcing UAE workers to sign settlements

Final settlement proof must to cancel labour card

Six-month ban will be cancelled when employees submit contract with new company

Labour cards of employees will be cancelled only after companies provide proof that all their financial dues are settled, according to the 'Ministry of Labour'.
The ministry official was responding to a query during the weekly meeting, where a worker had the verdict go in his favour. He alleged receiving only Dh24,000 and that his company wanted to cancel the visa, when Dh74,000 was rightfully due to him, according to a report in 'Al Khaleej' newspaper.
If the company refuses to act the worker can move the court, siad the officialas as there will be no delay in judicial procedures.
In a separate case, Labour Ministry committe while addressing the weekly meeting rejected the request of a company to transfer 74 workers from one of its plant to another facility owned by the same employer. According to an earlier rule, companies are required to pay Dh500 fee for the transfer of each worker after meeting all the other conditions set by the ministry.
In case the employee did not complete two years, the company must a transfer fee for work permit and labour card fee for two years of Dh300 in the first category; Dh600 for second category – level A; Dh1,500 for second category – level B; Dh2,000 for second category – level C; Dh5,000 for third category.
However, labourers who were sacked by the company before completing two years can move to another company. The application of skill levels and minimum wages rule will not be applied in such cases.
The six-month ban and cancellation of labour card can be revoked provided the employee submits a new contract of another company that is in accordance with the skills level and minimum wage rules.

The Ministry of Labour will not issue new work permits to companies if there are cases pending against owners who force workers to sign documents stating they received all financial dues.
According to an 'Al Khaleej' report, the ministry will also not allow such owners to open new facilities. However, it will renew labour cards that already exist.
The move aims to ensure the rights of labourers and help them abide by work contracts signed.
The ministry has called on workers to file complaints about employers who force them to sign on financial-receipt documents.

[Proof of final settlement more]

However, the complaints must be filed within 12 months of the documents being signed. Once they receive a complaint, ministry officials will study the case, hear out the employers' version and initiate appropriate legal action only if an amicable settlement is not found.
The Ministry stated that labour cards can be cancelled only if the employer submits documents to prove that all financial dues have been setlled with the respective employee.
All dues even if employee dies outside UAE
If UAE employees happen to die outside the country, then their families are entitled to receive financial dues including gratuity, according to the Ministry of Labour.
In the weekly session, while addressing labour issues, Khalil Khouri, Director of Work Permits, Labour Ministry, said: "If any person were to die outside the UAE, while being legally employed in the country, the financial dues of the deceased as per the employment contract should be handed over to the family."
"Similarly, the labour card of the deceased will be cancelled once the death certificate - duly attested by both the embassy of the country where the person died as well as the Ministry of Foreign Affairs - is presented.
Alternatively, the labour card will be automatically cancelled after six months as per labour laws," Khouri was quoted by 'Al Khaleej' newspaper.
Answering a labour transfer query, Khouri said employees can be transferred to another facility, if the company they were working for is closed. But in such cases, the ministry should be notified of the closure of the company within two months. Following which, the Inspection Department will study the complaint and, if need be, punishment procedures would be initiated against the owner.
End-of-service benefits... time to set up a gratuity fund in UAE
A legal expert has suggested that the UAE should set up a Gratuity Fund to meet the end-of-service benefits requirements in the country.
He also suggested that gratuity payments should be based on gross pay or at least a set minimum percentage of total remuneration (such as 75 per cent).
Shoeb Saher, Senior Associate with Habib Al Mulla & Company, said there are a number of things that need to be considered by the UAE lawmakers to address areas in which the current Labour Law may not be in keeping with the increasingly sophisticated demands of both employers and employees.
He recommended that employers should be obliged by law to keep gratuity funds in a separate account that is independently administrated for the benefit of the employees. Payments into this fund should be made by the employer annually (similar to pension schemes available in other jurisdictions). These funds could be invested in government-backed securities or fixed deposit accounts with local banks, both low-risk options with immediate and ongoing benefits for the local economy.
"There are a number of benefits in making such changes to the law," says Saher. "If the calculation of end-of-service gratuity was more clearly defined in the labour law, this would create more certainty amongst both employers and employees. It would also reduce the amount of litigation in this area, reducing the judicial workload for routine matters."
If separate gratuity funds were established, this money would be protected in the event that the employer runs into financial difficulty or becomes insolvent. The financial sector in the UAE would also receive a boost due to the extra liquidity generated by such funds, Saher pointed out.
Areas of concern
The law expert said there are concerns about the current legislation governing the payment of termination gratuity. He listed them as follows: In cases where the employer is in financial difficulties i.e. they become insolvent, the chances of the employee ever recovering their end-of-service gratuity are limited leaving them with little or no recourse even within the judicial system as there are no funds to make this payment.
The current laws might arguably incentivise employers financially to find ways to terminate an employee for a specific cause and without notice under Article 120 of the Labour Law. Termination under Article 120 bars an employee from claiming any gratuity payment.
Employees with low income do not have the financial means to fight a court case in instances where an employer fails to fulfill its end of service gratuity obligations.
It remains common practice for UAE companies to deliberately allocate an artificially modest basic salary to employees and increase the total salary with additional benefits such as travel and housing, etc., as gratuity is based solely on the basic salary.
Saher pointed out that according to recent reports the combined liabilities of companies in the UAE for end-of-service benefits currently amount to more than Dh14.6 billion.
These figures are believed to be growing rapidly as employees stay in their jobs longer in the wake of the global financial crisis and because gratuities are paid on the basis of an employee's final salary and salaries have generally been on the rise.
"As the UAE continues to progress towards global standards in many areas, it is very important to ensure that laws governing employment are adequate to handle the increasing sophistication of the economy and the UAE business environment, especially if the UAE wishes to continue to attract and retain foreign inward investment and some of the world's best talent," the law expert added.
Gratuity explained
As the name implies, end-of-service gratuity is an amount of money that every employee is entitled to receive, and every employer is liable to pay, upon termination of an employment relationship in the UAE, provided that the employee meets the conditions set out in the Labour Law (UAE Federal Law No. 8 of 1980). End-of-service gratuity forms part of the benefits an employee is entitled to upon termination of their employment contract.
Under the Labour Law employees in the UAE are entitled to the following benefits upon termination:
A notice period or payment due in lieu of the notice period where the contract for an unlimited period;
Payments equivalent to accrued but unutilised leave or any part thereof;
Payments for overtime or any wages due and not yet paid;
End of service gratuity calculated on duration of employment;
Where the contract of employment is for an unlimited period, compensation for unreasonable dismissal if the contract was terminated by the employer for unreasonable cause (generally to a maximum of three months);
Where the contract is limited, compensation equivalent to the period until the end of the contract, or three month's salary whichever is less; and
Repatriation expenses to the employee's country of domicile as per the Labour Law or as stipulated in the contract.
Calculation of gratuity
End of service gratuity is a sum of money payable by an employer to an employee where the employee has completed one or more years in continuous service. Gratuity is calculated as follows:
21 day's wages for each year of service for the first five years 30 day's wages for each additional year beyond 5 years on the condition that the total gratuity shall not exceed the aggregate of two years' wages.
Gratuity is calculated on an annual basis if the employee has completed at least one year of continuous employment with the employer. A day of absence from work without pay shall not be included in calculating the length of service. However, if an employee has completed one year and more in continuous service they are entitled to gratuity as a percentage of the year proportional to the duration of their service.
So for example, if an employee has worked for one year and three months they are entitled to end of service gratuity calculated on the period of 15 months. If they have not worked for the minimum period of one year, they are not entitled to end of service gratuity.
Gratuity is calculated on the basic wage last paid to the employee prior to termination of the employment contract and this wage is the basis for calculating the gratuity for each year of employment.
Determination of basic wage
The Labour Law stipulates that basic wage means anything received by the employee as a wage excluding housing, transport, travel allowances, overtime, family allowances, entertainment allowances or any other allowances or bonuses. According to a recent judgment in the UAE courts, any amount payable to an employee which is classed as their wage (other than allowances or bonuses), and for these purposes wage includes, amounts paid as a percentage, commission or performance-based pay, and therefore are taken into consideration for the calculation of gratuity.
Reduced gratuity
Reduced gratuity payments are calculated in accordance with the employee's length of continued service in instances where the employee resigns.
An employee with a contract for an unlimited period who resigns after continuous service of no less than a year but no more than three years is entitled to one third of the gratuity provided above. If the period of continuous service is more than three years but less than five they are entitled to two thirds of the gratuity. If continuous service is more than five years, the employee is entitled to the full gratuity payment.
Forfeiture of gratuity
The employee may be deprived of gratuity under the following circumstances:
They were dismissed for one of the reasons stated in Article 120 of the Labour Law or left work to avoid dismissal
They are employed under a contract for a specified limited period and resigned of their own free will before the end of the contract (only applicable where continuous services is less than five years)
They are employed under a contract of unlimited period and left the job voluntarily without notice, in cases other than those provided for in Article 121 of the Labour Law.
Note: This article is intended for general information only and should not be considered as legal advice.