The UAE is to impose fines of up to Dh1 million on employers who breach labour laws when hiring staff under a major drive to bolster workers' rights.
The government has issued a federal decree setting out a host of tough punishments for companies, including hiring minors, employing workers without valid permits and bringing people into the country but failing to provide them with jobs.
The directives will also introduce criminal penalties for companies which fake recruitment figures, including employing fictitious staff to meet Emiratisation goals.
Criminal proceedings can be initiated only at the request of the Ministry of Human Resources and Emiratisation.
Authorities said the strict measures were part of efforts to tighten employment regulations and ensure workers are protected by law.
The new legislation includes:
• Fines from Dh100,000 to Dh1 million for employing workers without valid work permits, bringing workers to the country without providing jobs, or closing businesses without settling obligations to workers.
• Fines from Dh100,000 to Dh1 million for committing employment fraud, including creating fictitious workers. Penalties and fines may be multiplied by the number of workers who are fictitiously employed.
• The Ministry of Human Resources and Emiratisation has been granted powers to settle cases, provided the employer pays half of the minimum value of the fine and pays back to the government the financial incentives obtained by the fake employees.
• Disputes will be brought before the courts in instances where companies seek to contest the ministry's decision.
Holding employers to account
The amended labour regulations come just weeks before the UAE embarks on a nationwide visa amnesty, to allow people with expired documentation to secure their status or leave the country without being fined.
The government initiative will provide a two-month grace period for those with lapsed residency visas from September 1.
The initiative will offer a reprieve to residents left without valid documentation after losing employment or being duped by unscrupulous recruiters offering false hope of employment.
A community leader in the UAE welcomed the amnesty and set out some of the reasons why foreign citizens may end up staying without a residency visa.
“It is a big relief for so many. There are people who came here searching for jobs and they overstayed,” said Ishtiyak Raziq, former president of Sahana, a Sri Lankan welfare association.
“There are also people duped by agents who promised higher paying jobs and they end up with nothing and they overstay.
Supporting workers
The updated rules mark the latest step by the government to protect the country's workforce as well as job seekers.
In December 2022, a new domestic labour law came into effect. The directives expanded the number of offences, which are punishable by fines and imprisonment, for breaches of working conditions and rules from four to eight.
They included fines of between Dh20,000 and Dh100,000 and up to six months in prison for those who provide false information or fake documents to employ domestic helpers.
Penalties ranging from Dh50,000 to Dh200,000 can be levied for hiring unlicensed workers, recruiting staff but not providing a job or using permits for domestic workers for purposes other than those for which they were issued.
On Tuesday, the government issued a further federal decree amending some provisions of the domestic worker law.
The update gives the Ministry of Human Resources and Emiratisation the authority to settle disputes between employers, recruitment agencies and workers when they cannot be resolved amicably.
The ministry is able to adjudicate in such matters when the value of the claim does not exceed Dh50,000 or if the dispute is caused by one of the parties failing to adhere to a previous ruling.
Company%20profile
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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The past Palme d'Or winners
2018 Shoplifters, Hirokazu Kore-eda
2017 The Square, Ruben Ostlund
2016 I, Daniel Blake, Ken Loach
2015 Dheepan, Jacques Audiard
2014 Winter Sleep (Kış Uykusu), Nuri Bilge Ceylan
2013 Blue is the Warmest Colour (La Vie d'Adèle: Chapitres 1 et 2), Abdellatif Kechiche, Adele Exarchopoulos and Lea Seydoux
2012 Amour, Michael Haneke
2011 The Tree of Life, Terrence Malick
2010 Uncle Boonmee Who Can Recall His Past Lives (Lung Bunmi Raluek Chat), Apichatpong Weerasethakul
2009 The White Ribbon (Eine deutsche Kindergeschichte), Michael Haneke
2008 The Class (Entre les murs), Laurent Cantet
Emergency phone numbers in the UAE
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre
Emirates airline – 600555555
Etihad Airways – 600555666
Ambulance – 998
Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries
Desert Warrior
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Company Profile
Company name: NutriCal
Started: 2019
Founder: Soniya Ashar
Based: Dubai
Industry: Food Technology
Initial investment: Self-funded undisclosed amount
Future plan: Looking to raise fresh capital and expand in Saudi Arabia
Total Clients: Over 50
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