United Arab Emirates: New Rules Regulating The Employment Of The UAE Nationals In The Private Sector

Last Updated: 13 December 2018
Article by Rima Mrad

On 04 April 2018, the Minister of Human Resources and Emiratization issued a groundbreaking Ministerial Decision No. 212 of 2018 on the regulations relating to the employment of UAE nationals in the private sector.

This decision replaced Ministerial Decision No. 293 of 2015 which set the rules and procedures for the employment of UAE nationals and Ministerial Decision No. 176 of 2009 which regulated the termination of UAE nationals in the private sector.

Ministerial Decision No. 212 of 2018 is a comprehensive policy that addresses the employment and termination of UAE nationals in the private sector including the creation of an efficient platform to enhance Emiratization. It further identified the procedures and steps to follow upon any employment of UAE nationals in the private sector.

There is no doubt that the decision will optimize the creation of a balanced work environment and foster the participation of UAE nationals in the private sector thereby enhancing their competitiveness and productivity.

As part of the changes introduced under the new decision, a special regulatory unit was created at the Ministry of Human Resources and Emiratization (The "Ministry") to organize and secure the Emiratization process. This unit is expected to provide the right platform to ensure that UAE national employees are able to perform within a healthy and suitable work environment and that they can rely on a strong mechanism to address and solve employment related complaints.

Further, the decision outlined clearly the conditions under which an employment relation with a UAE national can be terminated. Employers in the private sector are now required to submit an exit interview at the expiration or termination of a work relationship with UAE national employees including the reasons for the termination of the relationship.

In all cases of termination of the employment of UAE nationals, employers must procure that their contributions and the contribution of the insureds (the UAE national employees) are fully paid to the pension and social security scheme approved in the country and in any other schemes required by the legal systems in force at the Ministry in favor of the UAE national.

Termination of UAE nationals can occur in any of the following conditions:

– If the contractual employment relation expired without being renewed;

– If the termination is based on Article 120 of the UAE Federal Law No. 8 of 1980 also known as the UAE Labor Law;

– If the relation is terminated amicably by the parties;

– If the relation is terminated by any of the parties pursuant to a notice with a period varying between one (1) and (3) months provided that it is not less than three (3) months in limited contracts and where there is a disagreement between the parties over the calculation of the notice period.

Termination of UAE nationals is deemed as unlawful in any of the following conditions:

– If the termination is not based on Article 120 of the UAE Federal Law No. 8 of 1980 also known as UAE Labor Law

– If it is proven that the employer has retained a non-national employee to perform the same work as the UAE national employee, or if it has been proved that the termination of the UAE national was for the purpose of replacing him/her with a non-national employee without any justification acceptable to the Ministry in both cases.

– If the reasons for the termination are not related to the employment relationship especially if it is due to the employee submitting a serious complaint to the competent authorities or filing a valid claim against the employer.

By virtue of the new decision, if the Ministry ascertained that the employment relationship has been terminated unlawfully by the employer or the employee and has not been able to settle the dispute and reinstate the UAE national to his/her work, the dispute shall be referred to the competent labor court after the expiry of 5 working days from the date of notifying the parties to resolve the dispute amicably without reaching a settlement.

In such circumstances, the Ministry is entitled to suspend the permits given to the employer to issue new work permits for a period not exceeding 6 months from the date when the UAE national's claim is proven to be accurate or from the date on which a final judgment is issued.

The new decision entitled the Ministry to impose fines on employers equal to AED 20,000 per incident in any of the following cases:

a- Breach by the employer of the provisions of the new decision or any of the subsequent guidelines issued following its publication;

b- Unlawful termination of a UAE national and failure to reinstate an employee after being required to do so by the Ministry;

c- The Employer’s failure to maintain and settle its contributions due to the pension and social security as applicable in the country; or

d- Failing to fulfill Emiratization requirements in an effective manner.

At this stage, the Ministry is committed to provide training and development programmes to UAE nationals that will enable them to show their full potential, in addition to continuous training programs after employment to support their continuous progress and enable them to become future leaders with a high level of competence and commitment.

It is expected that the above changes will contribute to motivate UAE nationals and encourage them to work with private sector corporations as the measures implemented now can ensure to UAE nationals a stable, long term and secure employment relationship.

Emiratization is an important national issue and this new decision will support its effective implementation and the efforts pursued by the Ministry in the past years to optimize the employment of UAE nationals in the private sector. It will further promote the creation and training of qualified national cadres capable of taking the lead in the overall development of a sustainable economy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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