Expatriate Contract Termination in the Abu Dhabi-Case Study | Original UAE Case # 105

Expatriate Contract Termination in the Abu Dhabi Police

A summary of the pertinent facts of the case:

Abu Dhabi Police has have been contributing to great extend in the achievement of Abu Dhabi government objective of improving services and to become among the top five best governments of the world. In this process Abu Dhabi has gone under privatization in which the police vehicles repair and maintenance was being privatized. The Transportation and Workshop Department of the Abu Dhabi police have four main sections namely: transportation, vehicles maintenance, supportive services and storages. For the purpose of improving the service quality of vehicle maintenance section Abu Dhabi police has decided to privatize it to a private company Emirates Transportation Est. The company is well-known and experienced in the field primarily running the business of school transportation service. The privatization of Transportation and maintenance department of Abu Dhabi with the Emirates Transportation Est. was expected to provide services to the government bodies, local and federal management of several projects (Nasser, n.d.).

When Emirates Transportation has taken up the charge and started their operation, they have this thinking that Abu Dhabi Police vehicle maintenance department is labor intensive with excessive manpower. In response to this they start the process of layoffs. About 130 employees were laid off from the vehicle repair and maintenance section.

Major Issues:

The main issues associated with this retrenchment of employees were found to be:

1. All such employees were not citizens of Abu Dhabi and they had traveled to this place in search of jobs so that they can afford better living for their families in the home country.

2. Majority of the employees had bank loans which they will not be able to repay due to critical cash flow crunch and eventually will leave the country leaving the debts unpaid or bad debts for the country.

3. All the employees were terminated with short notice of two weeks and salary of two months. Short notice didn't allow them to look for another job.

4. Emirates Transportation Est. tried to re-employ the retrenched staff but majority of them refuse because they were not offered the same benefits of housing, health insurance and children education as they were given in Abu Dhabi Police department.

5. All the employees were face with sever domestic problems like health care concerns, children education which suffered greatly during sudden unemployment period and deterioration in the living standards of these people.

Alternate Scenario:

On the contrary when Abu Dhabi Municipality was undergoing the process of privatization of their Vehicles Maintenance Department prior to the Abu Dhabi Police, they had managed to do so with following characteristics:

1. Employees were notified 6-month prior to the layoffs so they can look for their jobs. Due to which majority of the employees were able to find new jobs.

2. They had involved employees in the process and the change process was done with full active participation of employees.

3. The employees left the organization with good experience for their future career move.

Problem Area:

The difference in both the approaches was due to the management approach that has taken charge of the privatization process. The Abu Dhabi Police department was headed by General Saeed who possess bachelor degree in accounting might be expert in his field of study but has not demonstrated quality skills in people and organization administration and management. He took employees as a burden and only bothered about the financial aspect of the organization.

On the other hand, Abu Dhabi Municipality was headed by Major Mohammed who was a graduate in Public Administration. Through his educational background he was well aware of the importance of people and organization administration and management. He tackled the issue of privatization with great efficiency leaving no adverse consequences on the economic conditions of individual that can affect economic condition on the macro level.

Trickledown effect:

Abu Dhabi Police was trying to make positive contribution towards the government broader objective of achieving high service quality and mark of excellence in the world. Privatization was one step taken by the police department to achieve service quality. There are 700 employees in the Transportation and Workshop Department of which almost all of them are expatriates, left their home country in search of better economic conditions for themselves and their families.

For any economy expatriates are considered to be a resource bringing in skills, craftsmanship and intelligence to the country contributing towards its economic development. This is the main reason countries, governmental and private organizations have formulated a framework...

The police department in their effort to cut cost and manage internal resources have retrenched 130 expatriates in one go. This has adversely affect the economy with the loss of manpower where there is shortage of skilled labor, decrease in the aggregate demand which this population was utilizing like health, life insurance financial and other facilities; and worsening of the debt positions of the bank from where they have availed the financing facility.
Thus layoff has not only created vacuum of manpower in the economy but had affected various sectors of the country. It has created a trickledown effect meaning affecting number of sects one by one.

Law enforcement for Expatriate workers in United Arab Emirates:

The United Arab Emirates have laid down guiding principles, rules, policies and procedures for considering the expatriate compensation and benefits, concentrating on their housing, education, relocation, living standards, allowances, healthcare and other benefits administered in the organization's policies. The governing frame work studies the expatriate's nature of employment, compensation and benefits and termination of employment. The termination of employment is discussed below:

1. Termination can be done with the mutual agreement of both the party.

2. Employee termination is also subjected to the end of contractual period

3. If the entity in concern goes bankrupt, liquidated or closure of the business due to any reason.

4. Death of either of the party

5. If the expatriate has done any fraudulent activity.

6. Educational and previous employment document or any other document found to be forged.

7. Violation from the employee side of the written instructions by the employer.

8. If the workers activity has caused huge financial loss to the company.

By law the worker is also entitled to avail benefits like gratuity, insurance, pension till its entitlement for the employees who have service period extending one year and refund of any savings account like provident fund or any other sort of savings previously being deducted from the salary of the employee. All the necessary documents, handed over to the employer that initially belonged to employee should be duly returned. Employees are entitled to be provided with employment certificate summarizing their career history in it. Reasonable notice period should be given to the employees for the search of new job. However, if short notice is given by the company then it should be compensated with two months' salary of the worker. On the other hand expatriates when laid off from their employment should leave the country with immediate effect of expiration of their visa and are not allowed to work for the rivalry company (Cardy, 2007).

Handling Expatriates during Termination of Contract:

In the country like Abu Dhabi where development work is in progress and lot of investment is being made in different sectors of the economy, the economy is open to skills and talent. People from around the world are seeking employment opportunities in such regions to improve their living standards and advance their skills and capabilities through international exposure. Therefore local companies in such regions whether it is private or governmental should be well trained in handling the expats and have experienced staff in dealing with them. The remuneration of the expatriate generally constitute gross salary given on the market-based competitive standards and monetary benefits that includes housing, utility allowances, health benefits and even children education facility. These benefits compensate the expats high cost of living in the new state.

Countries are encouraging expatriate from all over the world because domestic companies are encouraging diversity and pluralism in their workforce. People from diverge backgrounds bring in new skills, talent and business philosophy that adds knowledge to the system. Companies when are short of human resource in their home town attracts expatriates in different fields by offering lucrative employment opportunities. They give them formal training and earning sessions for them to be adaptive to the local business environment. Companies maintaining the international business are able to coordinate with their international subsidiaries and widening their horizon of global business. Many of the countries are going for expatriates in search of cheap labor as compared to the domestic one that demands high for the skilled and technical jobs (Castro, 2009).

It's important to have institutional framework that appreciated expatriate from around the globe and doesn't discriminate on the basis of demographic and psychographic elements. Government organizations are the main source of expatriates in the region. Even private organizations are contributing to great extend on it. Expatriate administration can be gauged in the following areas and can be improved by institutionalizing these areas for their better…