New labour law will guarantee same salaries for Emiratis in private sector as in public

Minister says law will ensure nationals in companies and free zones will receive benefits similar to those employed by state.

Saqr Ghobash, Minister for Labour, responded by letter to FNC questions on Emiratisation. Christopher Pike / The National

ABU DHABI // A new labour law will ensure that the salaries and benefits for Emiratis working in private companies are on par with those in the public sector, the FNC has been told.

In a letter, Minister of Labour Saqr Ghobash said that a comprehensive draft law to replace the law from 1980 had been finished.

In 2009, the FNC called for a revamp saying a new law was needed to encourage Emiratis to join the private sector, and it should ensure nationals working in free zones were covered.

The Cabinet approved the council’s calls that year.

Member Ali Al Nuaimi (Ajman) had said that for too long the more than 30 free zones had been exempt from the labour law.

Mr Al Nuaimi said the number of Emiratis in the private sector was low because the salaries and benefits were much lower than those of government workers.

Last year, the FNC said Emiratis comprised only 0.5 per cent of the private-sector workforce but 60 per cent of the public sector.

In a six-hour debate on Emiratisation, Humaid Al Qattami, Minister of Education, and Abdullah Ghobash, Minister of State agreed that a revamp of the labour law was the solution.

In a letter read out on Tuesday, Saqr Ghobash said his ministry was keen to add a clause to encourage more Emiratis to join the private sector by introducing incentives and wages more in line with the government sector.

It is unclear whether this means the Government would subsidise salaries or companies would be forced to pay higher wages.

Radhika Punshi, a director of human resources consultancy The Talent Enterprise, said Emiratis were looking to the private sector for more than pay.

“This could, to some extent, make the private sector more attractive to Emiratis,” said Ms Punshi, who was not at the session.

“But what brings Emiratis into companies is employee engagement and opportunities for development. Pay is a small part.”

“If you require the private sector to match public-sector wages, all you do is push up wages without significantly increasing productivity. You simply see more rent-seeking behaviour.”

Any move to require the private sector to lift wages would probably harm small business and entrepreneurs, Ms Punshi said.

“If the sector has to pay more and spend more on training, it becomes much harder for companies to afford Emirati employees.”

Ms Punshi said it was difficult to see how pay rises could be accomplished without wage subsidies.

Mr Ghobash assured the FNC that the law would in no way exempt free zones.

“Therefore, all clauses of the law applies to all provinces of the country.”

The ministry has so far finished 95 per cent of the study phase for the law, which includes discussions with stakeholders.

Mr Ghobash said this was the last phase before the law went to Cabinet.

It would then be passed to the FNC for discussion with the minister present.

But Mr Al Nuaimi said the letter did not give any justification as to why it had taken the ministry so long to issue the law.

He said he did not wish to summon Mr Ghobash on the matter because the council planned to debate a wider issue on the whole labour sector with him later.

* Additional reporting by Adam Bouyamourn