Private sector compliance with UAE labor laws and emiritization requirements

¶ … labor law in the UAE and whether private firms adhere to the government declared labor laws in the UAE. Fifteen sources are reviewed and findings reported.

LABOR LAW IN THE UAE

UAE Labor Law (nd) Gulf Talent

Gulf Business

Arab Emirates Embassy

Arab Emirates Embassy

Main Idea

UAE Labor Law Articles

New proposed labor law reviewed

Examines debate over labor law

Explanation of Labor Rights in the UAE

Main Idea

Cabinet of Minister's Resolution

Al Nowais (2014)

AL TAMMI & CO

Main Idea

Examines 2003 Amendment to Labor Laws

Examines emiritization as it realtes to labor law in the UAE

Examines disciplinary actions in UAE labor law

Main Idea

B

Daiija World

Oxford Business Group

Notron Rose Fulbright

Geisel (nd)

Main Idea

A

Covers the labor laws to be amended in the UAE

Examines UAE Labor Laws

Examines UAE labor laws

Examines law issues in the Gulf States

UAE Labor Law

Geisel Ind)

UAE Civil Society

Khaleej

Main Idea

A

Provides thorough overview of UAE labor law

Examines the state contracts in labor law to assess person trafficking risk in the UAE

Examines civil society in the UAE as it relates to labor law

Covers the differences in government and private sector labor laws

Main Idea

B

LABOR LAW IN THE UAE

Objective

The objective of this study is to examine labor law in the UAE and to answer as to whether the private sector adheres to the labor laws of the UAE.

Introduction

The government of the UAE has declared certain labor laws to be in effect. However, private firms fail to follow labor laws and commit many violations of those laws

Literature Review

UAE Labor Laws

The Cabinet of Minsters Resolution No. (202/2) for 2003 on setting the nationalization in regards to the companies working in the field of trade and employing 50 or more workers are required to "employ nationals at the rate of 2% annually in accordance with the Cabinet of Ministers." ( p. 1) It is reported that the "unified employment contract system for nationals in the private sector as published on the website of National Resource Development and Employment" is reported to state that national's labor cards are "exempt from the fees" in part of the First Article of the Cabinet of Ministers Amendment.

According to the human rights watch the draft law for the UAE is in violation of international standards. Specifically stated is "The law should be revised to protect workers' rights to organize, bargain collectively and strike, and to cover excluded groups such as domestic workers.." (2014, p. 1)

Hiring Emirati Employees

The publication "Global Workplace Insider" reports that when an employer in the UAE hires Emirati employees in the private sector that they must understand that if the employment relationship does not work out that they cannot "simply terminate the employment of an Emirati employee unilaterally under the UAE Labor Law as is the case with other employees." (p.1) It is reported that under the 'Resolution' when an Emirati employee is terminated for what could be considered a reason that is not legitimate where any of the conditions as follows exist:

Under the Resolution, termination of the employment of an Emirati employee is considered to be for an "illegitimate reason" if any of the following conditions exist:

Termination is not pursuant to Article 120 of the UAE Labor Law (which article sets forth certain categories of "for cause" termination).

(1) The employer is retaining a non-Emirati employee carrying out the same job.

(2) Where 30 days' prior notice of the termination is not provided to the Ministry or the employer does not follow the instructions of the Ministry with regard thereto.

(3) The Emirati employee is not paid all of his end-of-service benefits and other legal and contractual entitlements. (Global Insider, 2014, p. 1)

Labor Laws Different in Government and Private Sector

The work of Bose (2011) reports "As per the UAE legal system, labour laws regarding the employees in the government sector and private sector are different. The Federal Law No. 11/2008 on 'Human Resources in the Federal Government' governs the labour rights of the employees in the public sector. Federal Law No. 8/1980 on 'Regulating Labour Relations' governs the labour rights of employees in the private sector." (2011, p. 1) Bose goes on to relate that as per "Article No 114 of the Federal Law No. 11/2008 the end of service benefits of the UAE National employees shall be calculated as per the provisions of Federal Law No. 7/1999 on issuance of pensions and social security law and the amending laws thereof. A non-UAE national employee, working in public sector, upon termination of his service is entitled to end of services as follows: (i) Basic salary for one month for each year of the first five years of service; (ii) Basic salary for one and a half month for each year for the second five years of service; (iii) Basic salary for two months for each year of service exceeding 10 years." (2011, p. 1) In fact, it is reported that an employee in the public sector is "not entitled to end of service benefits in case the period of his service is less than one year consecutively. For the purpose of calculation of end of service benefits the period of notice and accumulated leave shall be calculated as part of the period of service and a part of the month is considered as full month. The above mentioned benefits are limited only to employees working in the government sector. Employees working in the private sector shall not be eligible for the benefits mentioned above." (2011, p. 1) The employee End of service benefits in the private sector are required to be calculated "as per provisions of Article No. 132 of the Federal Law No. 8/1980. As per Article No. 132, an employee who completes one year or more in continuous service shall be entitled to gratuity at the end of his service." (Bose, 2011, p. 1) Absent work days without pay are not included in the period of service calculations and it is reported that gratuity is calculated as follows: "(1) 21 days' basic salary for each of the first five years of service; (2) 30 days' basic salary for each additional years of service on condition that the total of the gratuity shall not exceed the basic salary of two years." (Bose, 2011, p. 1)

When an employee is suspected of misconduct or breach of policy, the employer is faced with a number of issues: whether to initiate its formal disciplinary process against the employee; how and when such processes should be implemented; and what mandatory local law requirements it must additionally follow (if any) prior to or upon imposing a disciplinary sanction on the employee, including but not limited to dismissal.

Disciplinary Actions

Federal Law No.8 of 1980, as amended (UAE Labour Law) sets out requirements of employers in disciplinary actions in the UAE. It is reported that in the UAE "disciplinary process does not vary significantly from procedures across many other jurisdictions such as the UK or Europe, offering some comfort for HR practitioners working for UAE subsidiaries of UK or European companies. Employees in the UAE have the ability to bring claims for unfair/arbitrary dismissal and, depending upon the manner of termination and subject to various eligibility requirements, potentially also a claim for an end-of-service gratuity payment, which could, for long-serving, senior and/or highly remunerated employees, prove incredibly costly." (AL TAMMI CO., 2014, p.1) The statutory requirements in regards to disciplinary measures are reported as minimal in nature however; it is reported that Article 110 of the UAE Labor Law "imposes on the employer compliance with strict legal formalities, providing that the penalties listed under Article 102" cannot be imposed unless the following conditions exist:

(1) The employee has been notified in writing of the allegations against him;

(2) The employee has been given an opportunity to comment on the allegations;

(3) The employer has investigated any defense provided by the employee in respect of the allegations; (AL TAMMI CO., 2014, p.1)

No more than one penalty can be applied to the deduction of the wages of the employee and the employee must be notified in the form of written notification. When this is contrasted to other jurisdictions it is reported "there are no statutory provisions or best practice guidelines detailing the notices to be provided to the employee or the conduct of any disciplinary meetings, apart from providing the employee an opportunity to comment on the allegations against him and to provide any relevant explanation or defense." (AL TAMMI CO., 2014, p. 1) It is additionally reported that UAE employees are often employed under contracts with limited terms and contract terms has a direct impact on the "degree of financial (or other exposure an employer will have on imposing a particular disciplinary sanction such as dismissal." (AL TAMMI CO., 2014, p. 1)