The private sector provides the majority of jobs in the UAE, accounting for about 63 per cent of the total workforce. While the Federal Government employs about 8 per cent of the remainder, nearly 11 per cent work for local governments and about 4 per cent work in joint local–federal departments. The remainder are employed in diplomatic missions and houses as domestic workers.
Most UAE national employees are concentrated in the federal public sector, which accounts for 45 per cent of the total local manpower in the country. About 35 per cent of citizens are employed in the local departments of individual emirates.
Despite a significant drop in the unemployment rate among nationals from a high of 14 per cent in 2008, the UAE continues to focus its efforts on reducing the current unemployment rate of 4.2 per cent.
According to the 2009 UAE Economic Report released in March 2010, while 53 per cent of the population are employed, 19.9 per cent have no desire to work in either the public or private sectors. The employment rate among expatriate workers is 79 per cent and 45 per cent among UAE nationals. The report highlighted that the majority of the unemployed are fresh graduates below 25 years. The economically active workforce is aged between 25 and 54 years – 42 per cent of whom are women.
In a country with diverse demographic challenges, Emiratisation is a crucial item on the Government agenda. Federal and local authorities are continuously drawing up and implementing initiatives to support the policy of expanding participation of the country’s citizens in the workforce. Among these are the establishment of the National Human Resource Development and Employment Authority – Tanmia, the Abu Dhabi Emiratisation Council, the Dubai-based Emirates National Development Programme and the Department for Human Resources Development in Sharjah. These organisations help develop the capabilities and skills of nationals in order to create a better balance in the labour market.
The quota system requires some business sectors to employ a certain percentage of Emiratis. For instance, a 1996 law stipulates that 4 per cent of the banking sector employees should be Emiratis. The law also stipulates that this percentage should increase by 4 points every year, up to 48 per cent. On average, however, Emiratis make up just 4 per cent of the private sector workforce, compared to 52 per cent in the public sector.
Though job creation is not a problem in the UAE, the difficulty in achieving the desired Emiratisation of the private sector arises from the fact that about 10 per cent of employed UAE nationals resign each year citing discontent over low wages; lack of training and development opportunities; negative stereotyping; and a lack of trust between employers and employees.
Emiratis hold only about 1.5 per cent of the jobs in the private sector. And, given the shrinking percentage of citizens in the total workforce of the country, it is estimated that they may account for less than 4 per cent of the total workforce in 2020.
An estimated 250,000 Emiratis are expected to enter the labour market by 2020. Finding suitable working opportunities for them will be a priority for the government as it seeks to encourage the private sector to employ them. According to a 2010 Gallup survey, about 66 per cent of young Emiratis prefer a government job to working in the private sector, or starting their own businesses.
New programmes are being devised and implemented to avhieve these goals. The framework is driven mainly by socio-economic priorities that aim to deliver a highly qualified workforce to meet the future needs of the country. These schemes are focussed on the development of students’ capabilities at three primary sectors: secondary levels, college, as well as technical or vocational education.
In order to meet the national demand for employment of Emiratis, the Abu Dhabi Tawteen Council (ADTC), for example, is leading a strategy to improve the learning environment, career development, career guidance and counselling for Emiratis. ADTC’s strategy will focus on five aspects – visionary planning, effective regulations, sufficient funding, accreditation and performance management.
Emirates Council for Emiratisation
To tackle existing and future challenges, as well as addressing the results of a review of the Emiratisation programme, the Cabinet established the Emirates Council for Emiratisation in June 2009. The primary function of this body is to avoid duplication between federal and local Emiratisation authorities. The council includes representatives from all federal and local authorities, higher education departments and the private sector in order to ensure a unified, nationwide plan.
While the Council formulates policies, standards and criteria for Emiratisation, the implementation process will be the responsibility of the local authorities. The Council is also responsible for preparing nationals for employment, particularly in the private sector. This is expected to produce a new national training agenda, as well as the first national human resources database, which will provide relevant information to all stakeholders.
The labour minister Saqr Gobash Saeed Gobash said the growth patterns that create jobs for a majority of unskilled workers have to change if strategies to tackle unemployment and population imbalance are to succeed. University graduates employed in the private sector accounted for only 10 per cent of the workforce. Workers with qualifications lower than secondary school certificates make up 51 per cent of the workforce.
Our economic pattern creates jobs for the majority of foreign, unskilled workers, while excluding citizens from the labour market…The construction sector, for instance, contributes 8.6 per cent to the GDP, but employs 47.5 per cent of the foreign manpower... Thus our ever-increasing reliance on foreign manpower has been accompanied with a decline in productivity and adversely affected the sustainability of economic growth and [the] creation of jobs for citizens...For the next five years, nationalisation programmes may provide enough jobs for citizens, but the real challenge will be creating attractive and productive jobs in the private sector for the new entrants to the labour market in the long run.’
Streamlining the job market
The Labour Ministry introduced a new classification system for companies in December 2010 to regulate the job market. The move arises from the implementation of a Cabinet Resolution governing the classification of establishments into groups in accordance with the degree of their compliance with labour legislations, systems and standards, cultural diversity approach and on-time payment of salaries, provision of accommodation, and Emiratisation quota. Divided into three main categories, the first group tops the scale; the second includes the current categories A, B and C; and the third, like the first, is a new category.
The creation of the first group is aimed at opening up new professional jobs for Emiratis and avoiding ‘mock Emiratisation.’ In the second group, the resolution arranges firms under A, B and C categories, according to cross-cultural policy. A company is classified in group A if it does not commit itself to this policy by at least 25 per cent of the demand. A non-compliance of 25 to 50 per cent will place the company in grade B, and in grade C if it exceeds the 50 per cent mark.
The resolution ranks the firms according to their adherence to certain conditions – the professional workforce (top three categories) should not be less than 20 per cent of the total manpower; and a worker's monthly salary should not be less than Dh12,000 in level 1, Dh7,000 in level 2 and Dh5,000 in level 3; and Emiratisation rate should not be under 15 per cent in these levels.
The new system replaces the current cultural diversity focussed classification policy, which was implemented in 2005. The resolution calls for introducing practical and real mechanisms for voluntary Emiratisation. Accordingly, the Emiratisation rate should not be less than 15 per cent of the total number of staff at establishments in the top three job categories.
The resolution also introduced a new penalty and black-point system against offenders that can downgrade firms to a lower group and drop black points after one year. A firm in the second group that accumulates 100 black points will be downgraded to the newly introduced third grouping. A company can also be placed in this group if it is convicted by a court for recruiting infiltrators, committing human trafficking crime or indulging in bogus Emiratisation and providing wrong information to the Wage Protection System with the aim of evading the newly introduced salary monitoring measure.
In case of recruiting infiltrators or violating anti-human trafficking laws, the company's original group categorisation will not be restored until one year is elapsed from the date of downgrading and the violation is corrected. Fines for any of these irregularities range between Dh15,000 and Dh20,000.
Explaining the rationale behind this policy shift, Labour Minister Saqr Ghobash Saeed Ghobash said:
Our ethical and legal mandate requires us to strive to explore and roll out mechanisms that embody the sincere commitment of the political leadership to put in place a safe and stable environment and to protect rights of all categories in the community...The new classification system was designed after consultation with prominent local labour market experts and embraced best practices from experiences of international community and neighbouring countries...While the old system revolved primarily on the cultural diversity mix in firms, the new one allows the firm to move higher on the classification scale giving them a slew of rewards based on their commitment to certain standards like Emiratisation, wages and housing...
Scrappage of the sponsorship (Kafeel) system – which costs the UAE over Dh50 billion annually to host four million foreign workers and is criticised by rights groups has been ruled out by the Government, which has affirmed that it is an acceptable system. In a landmark decision in December 2010, however, the Labour Ministry infused reform and flexibility in the job market.
Under the new system effective 1 January 2011, if a foreign worker has completed the two-year working period, the employer cannot compel the employee to stay on. More importantly, since the ‘no-objection certificate’ (NOC) rule has been scrapped, workers no longer face a six-month ban on taking up new employment. Previously, workers had to complete at least three years of service with their employers and had to obtain an NOC letter before changing employment.
Professional and skilled workers in the first three categories of the Uniform Gulf Occupational Classification would also qualify for exemption from the six-month ban. About 800,000 workers constitute these three categories (the first includes employees with university or postgraduate degrees; the second workers with qualifications that are less than university degrees; and the third category comprises skilled workers with high school degrees).
As part of the labour reform process, which also involves striking a balance in the contractual relationship between the employer and worker, the resolution stipulates two mandatory conditions: first, the two contracting parties must end their job relationship cordially; and second, the worker should have been with the employer for at least two years.
The resolution defines two cases where the worker can obtain a new work permit even if his or her contractual relationship with the employer has not ended amicably: firstly, when the employer fails to honour legal or contractual obligations; and secondly, where the worker is not responsible for the deterioration in the working relationship and has filed a complaint against the firm.
The resolution also defines three situations where an employee will have the right to get a work permit without fulfilling the condition of working at least two years with the employer: first, when joining a new job, the worker should be classified in the first, second or third professional class and the new salary should not be less than Dh12,000, Dh7,000 and Dh5,000 respectively; second, non-compliance of the employer with legal and labour obligations towards the worker or in the case where the worker has no role in terminating the work relationship; and third, shifting of the worker to another firm the employer owns or has a stake in.
According to the labour minister, the new measures are expected to play a major role in advancing efforts towards creating an efficient labour market and sharpening competitiveness and transformation towards a knowledge-driven economy:
The ministry will only interfere in the employer-worker contractual relationship if it detects infringement in obligations stated in the labour contract...Giving the private sector more freedom of movement will have automatic impact on employers by the way of preserving their interests through creating many options for recruiting skillful workers as per the supply-demand equation. The new regulations constitute key elements of labour reforms, part of which have already been executed and the other parts of which will be in place in the near future...
Labour issues have taken centre stage in the UAE’s development process in recent years. This is not only due to the importance of new projects, which are driving the country’s economy, but also due to the fast-changing policies related to expatriate workers’ rights and welfare. Numerous efforts are being undertaken to ensure the safety of workers, guarantee payment of wages on time and to improve living and working conditions, as well as strict enforcement of law to minimise violations.
Despite the challenges, the UAE is aiming to manage and govern the working environment in line with international laws and best international labour practices. Some of the labour-friendly measures undertaken during 2010 are as follows:
• In a bid to regulate the labour market, the Government reduced the validity period of the labour card for all employees in the private sector from three to two years. As an extension, the residency visa will, henceforth, also be valid for a period of two years. The Cabinet decision aims to unify the labour card validity for all workers. Earlier, only drivers, domestic helps and other similar categories of workers were given two-year labour permits and residence visas. The change was mandated after official statistics revealed that 70 per cent of labour cards are cancelled within two years of being issued. The new move, effective from January 2011, is expected to make the employer-employee relationship more flexible.
• During the first eight months of 2010, the Labour Ministry received 5433 complaints pertaining to various violations, of which 3775 issues were amicably addressed and the rest referred to further scrutiny.
• In a first of its kind, a multilingual booklet – ‘The Worker: Rights and Duties’ was released by the Minister of Interior. Issued in six languages – Arabic, English, Tagalog, Persian, Chinese and Urdu – the pocket book was distributed to all federal government departments, concerned NGOs, labour accommodations, and media outlets. The booklet explains the rights and responsibilities of the worker as the basis of freedom and justice. It is also aimed at spreading awareness among individuals about their rights and duties towards the community and state.
• The Ministry of Labour and World Bank signed an agreement, which facilitates the latter’s advisory role in developing mechanisms to regulate the labour market and enabling citizens to enter jobs that match their ambitions, as well as help build a labour market data system.
• The UAE participated in the fourth Global Forum on Migration and Development, which was held in Puerto Vallarta, Mexico. Titled ‘Integrating Migration Policies into Development Strategies for the Benefit of All,’ the forum was attended by more 500 delegates from 130 countries. It addressed issues such as the inter-relationship between international migration and the Millennium Development Goals and the integration and circulation of migrants. The UAE is among 14 countries chosen to assess the course of the forum, the findings of which will be presented on the sidelines of the UN General Assembly in 2013.
• A new resolution announced by the Labour Ministry extended the summer mid-day working ban from two to three months. The initiative, which prevents labourers from working outdoors between 12.30 pm and 3 pm, will henceforth be enforced from 15 June to 15 September, unlike previous years when it ended in August. Under the new law, those working on projects exempted from the rules must be provided with enough cold water, lemon, salt and healthy salads during these hours. The UAE pioneered this mid-day initiative, which has since been followed by other countries in the region.
• The Ministry of Labour organised a workshop on ‘Protection of Labourers in the UAE’ in cooperation with the International Labour Organisation (ILO) in Geneva. The UAE has signed a technical cooperation agreement with the ILO to provide decent work in the country. A preliminary agreement has been reached on the major components of the strategy – protection of the rights of labourers, development of national employment policies and monitoring systems, as well as the enhancement of social dialogue.
• In an effort to relax visa rules for women, the Labour Ministry now allows expatriate women who are under the sponsorship of their mothers, brothers, uncles or other family members, to work in the country. The rules will be applicable to any woman who has a valid residency in the country regardless of the kin relationship of her sponsor. Earlier only expatriate women under the sponsorship of the father or husband were allowed to work in the UAE. Under the labour law, no expatriates are allowed to work in the country unless they obtain a work permit and labour card.
• Abu Dhabi Municipality opened a special facility – Al Raha Workers Residential Village. This has been built according to international specifications, equipped with modern amenities and can accommodate about 32,000 workers and technicians. It includes shopping centres, commercial outlets, clinics and health centres, security posts, post office, clubs and recreational facilities.
• In another massive workers’s accommodation project, the Abu Dhabi Government-backed Zonescorp is overseeing the construction of 12 ‘workers residential cities’ that will accommodate 300,000 workers when complete in 2012. The new cities include medical clinics, shopping centres and recreational facilities.
• More than 75,000 people were arrested at Dubai International Airport in 2009 after undergoing Iris scans, 4000 more than in 2008. These were people who were deported from the country for different reasons and were stopped from reentering the country with a different name and passport.
• H.H. Sheikh Mohammed bin Rashid Al Maktoum approved by-laws and executive regulations for the implementation of the Federal Human Resources law. This is part of the government’s efforts to establish clear standards and effective managerial government measures to develop human capital, clarify the duties and rights of employees in the Federal Government and provide an appropriate work environment for all employees, who number about 80,000.
• The Ministry of Labour set up a team to follow up implementation of the model imitative for management of cycle of temporary contractual workers from India and Philippines out of the federal government vision to enforce recommendations issued by Ministerial Consultations on Overseas Employment and Contractual Labour for Countries of Origin and Destination in Asia (Abu Dhabi Dialogue) in January 2008.
Further, some innovative efforts launched in 2009 continue to positively impact the labour market, especially expatriate workers. As part of the Wage Protection System, it is now mandatory for business organisations with 100 or more employees to channel their workers’ salaries through the banks and money exchanges, which is a marked shift from the previous system of cash payments to blue-collar workers. The system, which is being enforced in cooperation with the Central Bank and local money exchange companies, not only helps timely payment of salaries, but also assists the Ministry in verifying if companies make improper deductions from the salaries of workers.
The Labour Ministry, in coordination with the ILO, is also involved with the ‘Decent Work Country Programme’. This is a protocol of cooperation that seeks to achieve its goal through four strategic approaches: create an environment where the principles and rights at work are observed; create more employment opportunities to enhance access to decent jobs and income through labour market-friendly education and training; strengthen social networks that protect the less-privileged segments; and ensure contributions of the social stakeholders in formulating socio-economic policies.
Following the approval of the Abu Dhabi Declaration by all major labour-sending and labour-receiving countries of Asia in 2008, the Labour Ministry – along with the Indian and the Philippines Governments – is part of a pilot project to survey and document best practices in the management of the temporary contractual employment cycle. Expert input is being provided by the Arab Labour Organisation, ILO and International Organisation on Migration. The aim of this project is to search for more humane ways of utilising the skills of temporary contractual workers.
Statement of Labour Values
The following measures express some of the shared values of the New York University (NYU) and Executive Affairs Authority, Abu Dhabi, which form part of the contractual requirements for all companies involved in the construction and operation of the NYU Abu Dhabi campus. Among others, similar agreements have been signed by the Tourism Development and Investment Company and the Solomon R. Guggenheim Foundation to safeguard the rights and welfare of employees at the Guggenheim Abu Dhabi Museum site.
• Employers will fully cover or reimburse employees for fees associated with the recruitment process, including those relating to visas, medical examinations and the use of recruitment agencies, without deductions being imposed on their remuneration.
• Employees will retain all of their own personal documents, including passports and drivers' licenses.
• Individuals employed in connection with NYU Abu Dhabi will be a minimum of 18 years of age.
• Employees will work no more than eight hours a day, five days a week, except for those working in construction-related activities, who will work no more than eight hours a day, six days a week. Overtime will only be worked voluntarily, and will be compensated at premium rates.
• Employees shall receive their full wages or basic salary via electronic bank transfers and on a pre-agreed upon schedule.
• Employers will not impose or request employment bans on employees seeking to change jobs.
• An employee who completes one or more years of continuous service will be entitled to severance pay at the end of their employment.
• Employees will receive employer-provided medical insurance.
• Employees will receive employer-funded transport to and from their job sites or an equivalent allowance.
• Employees are entitled to 30 calendar days of paid annual leave each year.
• Employees shall receive leave with full pay for ten UAE public holidays each year. In addition, employees will be granted two additional days per year for other religious holidays to be taken at their discretion.
• Female employees shall be entitled to maternity leave, with full pay, for a period of up to 45 days.
• Foreign employees shall receive employer-funded air travel between the UAE and their country of origin for expatriation at the beginning of their employment, for repatriation at the end of their employment, and one additional trip, per year, to be used in conjunction with vacation leave.
Complete statements available at:
http://nyuad.nyu.edu/about/labour.values.html and http://www.tdic.ae/en/media/get/20100922_epp-joint-statement-22-sept.pdf