UAE’s new labour rules will ensure employees are treated well, say businesses

Small business owners fear that they may lose out, but others feel the new regime will ensure employees are treated well.

The changes to the labour rules aim to make the hiring process more transparent. Christopher Pike / The National

ABU DHABI // Small business owners have given a cautious welcome to changes to the labour law.

The changes aim to make the hiring process more transparent and ensure employees are paid correctly. It also allows an employee to leave a company within their probation period, without incurring a penalty or visa ban – making it easier for workers to switch jobs.

“In the event that one of the parties decided to end the fixed-term contract during the renewal period, [they must] start by notifying the other party before the date of termination – not less than one month and not exceeding three months,” said Humaid bin Deemas, assistant undersecretary for labour affairs at the Ministry of Labour.

“Those who decide to terminate the contract must complete the [decided] notice period then pay agreed dues not exceeding the total remuneration of three months’ salary; this applies for both sides.”

Small traders, however, say they could lose out.

“I think these rules are more supportive to workers than us,” Ahmed Hamid Abdullah, owner of Ritaj restaurant in Abu Dhabi, said.

“We bring a worker from India spending thousands of dirhams and if he leaves after six months it would be a big loss for us.

“About Dh8,000 is spent on hiring a person. We spend on visa Dh5,350, labour card Dh2,000 and then Emirates ID, Daman, bank guarantee. More difficult is that in case he resigns after six months who is going to immediately replace him and do his work?

“Finding an appropriate employee with specific skills is very difficult, and the work gets affected until another person joins.

“If a worker leaves before completing a two-year contract, we lose a huge amount of money. That’s why we want to retain our employees for longer.”

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The new rules - at a glance

“The three new decrees that ensure a stable, balanced and transparent working relationship between employers and workers, are based on a contractual basis accepted between both sides in line with the labour laws and regulations, which also enables them the right to end the relationship any time,” said Humaid bin Deemas, assistant undersecretary for labour affairs at the Ministry of Labour.

Key points

• An employer and employee can mutually terminate an employment contract after six months.

• In the event a party decides to terminate employment unilaterally they shall be obliged to face all legal consequences.

• Workers in skill categories one to three will not face a six-month employment ban should they wish to move to a new employer after completing their notice period.

• Fourth and fifth skill category workers can move to another employer after completing a period of no less than six months with their current firm.

Full rules can be read on the MoL website mol.gov.ae/molwebsite/en/labour-law/labour-law.aspx

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Others were more welcoming of the new rules.

“In general, yes, it’ll affect the employers who have many staff. If workers are going to move, the visa charges will be lost,” Tushar Patni, managing director of Ajanta Jewellery in Abu Dhabi, which employs about 50 people, said.

“As far as I am concerned, I wouldn’t be affected much from the new rules as I have employees who have been working with me for a long time. As long as you take care of your employees, it will be good for both.”

K Muraleedharan, managing director of Southern Franchise Company group, which employs more than 2,000 people, said: “If you pay a person well and behave good, definitely he’d stay with you. Employers need to develop a good relationship with their employees so that they can stay longer.

“Because of the new law, the workers would receive respectable pay and it would open up a more competitive market and benefit employees. Employers would give more benefits to workers to retain them.”

Joy Thomas John, managing director of Joy’s Hotel Management in Abu Dhabi, said: “Since the law says, ‘with the consent of present employer the worker can leave’ there is not going to be a problem.

“But if the employer is losing his business he can ask the employee to seek a job somewhere else,” Mr John said, who has over 150 staff.

“Mutual consent is required to leave the job so it will not affect my business,” he said.

He said the law is very transparent and benefits both employer and employee.

“Otherwise if you say goodbye to me after six month who will pay the money I spent on the visa?” Mr John said.