UAE is a constitutional federation of seven emirates; Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Quiwain, Ras al-Khaimah and Fujairah. The federation was formally established on December 2, 1971.
UAE, one of the world's fastest growing tourist destinations, has all the right ingredients for an unforgettable holiday, sun, sand, sea, sports, unbeatable shopping, top-class hotels and restaurants, an intriguing traditional culture, and a safe and welcoming environment.
UAE, rich in oil and natural gas, has become highly prosperous after gaining foreign direct investment funding in the 1970s. According to the IMF, this country has a relatively high Human Development Index for the Asian continent, ranking 39th globally, and has a GDP purchasing power parity of $293.5 billion in 2009.
POLITICAL SYSTEM
The UAE has a federal political system. Constitution of the UAE effectively unified the seven emirates and laid down the composition of the federal government. Each individual emirate retains its judicial and political power unless otherwise provided by the Constitution or by agreements transferring the same to the Federal Government.
The Federal Government, however, maintains exclusive jurisdiction in a number of areas such as foreign affairs, defence, health and education while the individual emirates have exclusive jurisdiction in matters relating to municipal work and national resources, among other things.
Each emirate has its own ruler and together they comprise the Supreme Council, the highest political body of the federal government. The council elects the President and the Vice President from its members. The federation is also governed by a Prime Minister and a 40 member consultative assembly called the Federal National Council. The Prime Minister is appointed by the President with the consent of the members of the Supreme Council and members of the Federal National Council are recommended by the Ruler of each emirate.
POPULATION
In 2009, UAE's population stands at about 5.7 million of which approximately 21.9% were nationals and the rest foreigners. As a consequence, UAE nationals form a minority of those who reside in the country. UAE has one of the most diverse populations in the Middle East.
The UAE's high standard of living and economic opportunities have attracted workers from India, the Philippines, Egypt, Jordan, Yemen, Pakistan, Sri Lanka and Bangladesh. The main population centres are the cities of Abu Dhabi, Dubai and Sharjah.
LANGUAGE
Arabic is the official language of the UAE. Usually English is used as the common medium of communication in the majority of trade and commerce activities, along with Arabic. English is widely spoken and understood in all major cities in the UAE. Urdu, Hindi, and Persian are other major languages in the UAE.
Religion
Islam is the UAE's state religion, but the government follows a policy of tolerance towards other religions and rarely interferes in the activities of non-Muslims and it is tolerant of the different creeds and beliefs of its large expatriate community. However, it is illegal in the UAE to spread the ideas of any religion apart from Islam through any form of media as it is a form of proselytizing.
CULTURE
The United Arab Emirates has a diverse and multicultural society and Arab Islamic culture dominates the lifestyle of UAE. Emirati life-style mainly revolves around the religion of Islam and traditional Arab, and Bedouin culture.
CURRENCY
The UAE ‘Dirham’( or the Arab Emirates Dirham (AED) as it is termed in international markets) is the unit of currency. The dirham is divided into units of 100 fils. Currency notes are issued in the denominations of 5, 10, 20, 50, 100, 200, 500, and 1,000 dirhams. Coin denominations are 25 and 50 fils and 1 dirham.
The Dirham is tied to the US Dollar at a steady exchange rate of $ US 1=Dhs.3.671.
LEGAL SYSTEM
The UAE is essentially a civil law jurisdiction heavily influenced by French, Roman and Islamic law. In recent years, principles of Egyptian law, which are mostly based on French law, have been an additional influence.
There are two main types of laws in the UAE, federal and local. Accordingly, there are both federal courts and local courts in the individual emirates to uphold the constitution.
The federal laws are applicable to the UAE as a whole and are issued either by the legislative body or by the ministers of each ministry by virtue of the powers conferred upon them. When a minister passes a law, it is known as a Ministerial Order and should be treated as a regulation rather than a law.
Local decrees and orders only apply to a particular emirate. A local decree is passed by the Ruler or Crown Prince of a particular emirate, and a local order is issued by a member of the royal family of that emirate. Should there be a conflict between Federal law and local decrees, Federal law will prevail.
Although the legal procedures and laws applicable to the courts in the individual emirates are fairly similar, there are differences, particularly where a special law has been enacted and applied in a specific emirate. Article 7 of the Constitution states that the Islamic sharia shall be the main source of legislation in UAE.
ECONOMIC ASPECTS
The United Arab Emirates (UAE) is one of the most developed countries in the world, based on various socioeconomic indicators such as GDP per capita, energy consumption per capita, and the HDI. The GDP per capita is currently the 17th in the world as measured by the International Monetary Fund.
Available statistics indicate that the UAE currently has one of the fastest growing economies in the world. According to a recent report by the Ministry of Finance and Industry, real GDP rose by 35% in 2006 to $175 billion, compared with $130 billion in 2005. These figures would suggest that the UAE had the fastest growing real GDP in the world, between 2005 and 2006.
The Abu Dhabi Economic Vision 2030 looks at business legislation, labour policy, fiscal policy and monetary policy as key regulatory and policy levers that can be manipulated to improve the overall business environment.
Although the United Arab Emirates is becoming less dependent on natural resources as a source of revenue, petroleum and natural gas exports still play an important role in the economy, especially in Abu Dhabi. A massive construction boom, an expanding manufacturing base, and a thriving services sector are helping the UAE diversify its economy.
BUSINESS CLIMATE
UAE offers business sector all the advantages of a highly developed economy. The infrastructure and services match the highest international standards, facilitating efficiency, quality and service. Among the benefits are:
• Free enterprise system
• Highly developed transportation infrastructures
• State-of-the-art telecommunications
• Sophisticated financial and services sector
• Top international exhibitions and conference venues
• High quality office and residential accommodation
• Reliable power, utilities etc
• Cheaper fuel costs
• First class hotels, hospitals, schools, shopping malls and cosmopolitan lifestyle
In the Arab world, UAE has the third-largest non-oil GDP, behind Egypt and Morocco.
GOVERNMENT INCENTIVES
UAE enjoys a strategic location and serves as the biggest re-exporting centre in the Middle East. Its low logistical and operational costs and excellent infrastructure, international outlook and liberal government policies are attracting investors in a big way. Activities such as trade, transport, tourism, industry, finance and service have shown steady growth and helped the economy to achieve a high degree of expansion and diversification.
The doing business in the UAE is very attractive due to the following reasons
• No personal income and capital taxes
• No corporate taxation
• 100% repatriation of capital and profits
• No currency restrictions
• Competitive import duties
• Modern efficient communication facilities
• Abundant and inexpensive energy supply
• Simple staff recruitment procedures
• Competitive freight charges
• Competitive real estate costs
• Easy access to both seaports and airports
• 100% Ownership in Free Zones
• Availability of a skilled and experienced workforce
• Efficient recruitment procedures
• High level of administrative support.
TAXATION
There is no personal income tax or corporate tax ( except banks and oil companies ) payable in UAE. Also, there is no taxation on investment income, no taxation on rental income, no wealth taxes, no capital gains tax, no inheritance or gift taxes, no property taxes, no stamp duty, and no consumption taxes in UAE.
However, individual emirates may charge levies on certain products such as liquor and cigarettes and on certain services such as those provided in the hospitality industry.
MONEY AND BANKING
Banking and financial laws in United Arab Emirates are quite strict. Money laundering, illegal transfers of money and criminal activity are well monitored as anywhere in the Western world. The government has put maximum surveillance on money transactions. UAE's first anti-money laundering law was enforced in November 2000
.
FOREIGN TRADE
The United Arab Emirates has been a centre of trade since ancient times, copper, pearls and oil being some of its most precious commercial commodities. Today, trade is still the central cornerstone of the economy, oil and gas exports remaining an important component as far as exports are concerned.
Despite the predominant role played by oil and gas, the numerous free trade zones established in the country are also contributing enormously to the value of exports and the UAE has become the third most important re-export center in the world (after Hong Kong and Singapore). Re-export trade forms a substantial one-third of the entire trading sector in the UAE.
Because of the population increase in UAE, a higher demand for imports to meet re-export requirements and an increasing level of individual expenditure, there have also been rises in both the value of and volume of imports into the country. Low commodity prices caused by fierce competition among Asian countries eager to maintain external markets have also had an upward effect on volume.
COUSTOMS DUTY
The UAE has a friendly customs policy. Import duties are low and there are exemptions. Goods imported and intended for re-export often benefit from exemptions of customs duty as do manufacturers on import of their machinery, raw materials and spare parts used for industrial purposes.
Although each emirate operates customs procedures independently, they meet and discuss federal and AGCC issues under the auspices of the UAE Customs Council. Agreement has been reached between Abu Dhabi, Dubai and Sharjah customs departments for a series of joint measures to be undertaken as part of the process of streamlining customs procedures.
Importers should have an Importer Code allotted by the Customs Department which is given on submitting the application in the prescribed form together with the copy of Trade License. Importers are allowed only to import goods which are related to the activities permitted by the license.
In accordance with Customs Ordinance, Customs duty is calculated on CIF value (cost, insurance and freight) at the rate of 5%. Imports of all intoxicating liquors will be subjected to a 50% customs duty on their CIF value. Import of Tobacco Products is 100% of the CIF Value. CIF value will normally be calculated by reference to the commercial invoices covering the relative shipment, but Customs is not bound to accept the figures shown therein and may set an estimated value on the goods, which shall be final, as far as duty is concerned. Deduction on invoices for agency commissions and internal settlements between suppliers and importer/agent are dutiable and will be added back for calculation of duty.
DOUBLE TAXATION AVOIDANCE
To prevent the incidences of double taxation on income such as business profits, dividends, interest and approved royalties that are derived in one country and remitted to another country, UAE has also entered into agreements for the Avoidance of Double Taxation with 47 countries to-date.
UAE has entered Double Taxation Avoidance Agreements with the following countries till date;
Egypt, Algeria, Yemen, Tunisia, Morocco, Sudan, Syria, Lebanon, Mozambique, Pakistan, India, Srilanka, Philippine, Korea, Singapore, Indonesia ,Thailand, Malaysia, China, Newzealand, Ukraine, Belarus, Holland, Bulgaria, Turkmenistan, Armenia, Tajikistan, Mongoli, Azerbaijan ,Austria, Poland, Germany, Finland ,Italy
Czech Republic, France, Belgium, Romania, Turkey, Luxembourg, Spain, Malta, Bosnia, Herzegovina, Seychelles, Mauritius, Canada, Uzbekistan
FOREIGN EXCHANGE CONTROLS
The UAE dirham is freely convertible and there are no restrictions on the repatriation of capital or transfer of profit.
IMMIGRATION REQUIREMENTS
Except for citizens of the Gulf Cooperation Council ( Qatar, Kuwait, Saudi Arabia, Bahrain, Oman, and the UAE ) who do not require a visa and citizens of the following countries who are automatically entitled to visit visa on entry (i.e., citizens from United Kingdom, France, Italy, Germany, the Netherlands, Belgium, Luxembourg, Switzerland, Austria, Sweden, Norway, Denmark, Portugal, Ireland, Greece, Cyprus, Finland, Malta, Spain, Monaco, Vatican, Iceland, Andorra, San Marino, Liechtenstein, United States, Canada, Australia, New Zealand, Japan, Brunei, Singapore, Malaysia and Hong Kong ), all other visitors who wish to visit UAE must obtain a visit visa in advance through a sponsor.
The sponsor can be a travel agency, a hotel, a company or department with which one is doing business in the UAE, or an individual ( e.g., a relative or friend who is a resident in UAE. )
There are several types of visas ( like the tourist visa, transit visa, visit visa, multiple entry visa and residence visa etc.) and these primarily depend on the purpose of entry into the UAE. Investors in UAE ( except in offshore jurisdictions ) are eligible to get investor/residence visas in UAE.
Employment
UAE LABOUR LAW
Administered by the Federal Ministry of Labour and Social Affairs, Labour Law in the UAE is liberally based on the International Labour Organization’s model. UAE Law No. 8 of 1980, as amended by Law No. 12 of 1986 (the Labour Law), governs most aspects of employer-employee relations. In addition, there are several ministerial orders and Cabinet decisions which provide regulations pertaining to the Labour Law.
The Labour Law is applicable to all employees working in the UAE with the exception of those employed in public or government bodies, the armed forces, police and the security services, private and domestic help and those employed in agricultural industry subject to certain conditions. Free Zones have its own employment regulations.
The Labour Law is protective of the employees in general and overrides conflicting contractual provisions agreed under another jurisdiction, unless they are beneficial to the employee.
Trade unions do not exist. In the case of a dispute between employer and employee, or in the interpretation of the Labour Law, the Ministry of Labour and Social Affairs will initially act as an adjudicator. If a party wishes to appeal any such decision, it can take its case to court. Strikes and lockouts are forbidden.
The maximum working hours permissible under the Labour Law is 8 hours per day or 48 hours per week.
Salaries and employee packages tend to vary from industry to industry although there is no minimum or maximum salary requirement in UAE. Pay packages in UAE are divided into a basic salary and other allowances
LANGUAGE
The Arabic Language is the one to be used in all records, contracts, files, statements and other documents as may be provided for in this Law or in any orders or regulations issued in implementation of the provisions hereof. The use of Arabic shall also be compulsory in instructions and circulars issued by the employer to his employees. If a foreign language besides the Arabic language is used, the Arabic language shall prevail over other texts.
EXEMPTIONS OF LABOUR LAW
The provisions of this Law are not applicable to the following categories:
a) Officials, employees and workers of the Federal Government, Governmental Departments of the Member Emirates of the State, Officials, employees and workers of municipalities as well as other officials, employees and workers, working in Federal and local public Departments and organizations, as well as the officials, employees and workers appointed for Governmental Federal and Local Projects.
b) Members of the Armed Forces of Police and Security.
c) Domestic servants working in Private residences and the like.
d) Workers employed in Agriculture or pastures, other than those persons employed in the agricultural corporations engaged in processing their products or those permanently engaged in operating or repairing mechanical machines required for Agriculture.
EMPLOYMENT OF FOREIGN NATIONALS
Employees who are not UAE nationals may be employed in the United Arab Emirates only after approval of the Labour Department and the obtainment of a work permit in accordance with the procedures decided by Ministry of Labour and Social Affairs.
Work permits may only be granted if the following conditions are fulfilled.
a) That the employee has the professional competence of educational qualifications that are needed by the State.
b) That the employee has lawfully entered the Country and complies with the conditions stipulated by the residence regulations in force in the State.
The Ministry of Labour and Social Affairs may cancel work permits granted to non nationals in any of the following cases:
a) If the employee remains unemployed for a period exceeding three consecutive months.
b) If the employee fails to meet one or more of the conditions on basis of which the permit is granted.
c) If the Ministry is satisfied that a certain national employee is qualified to replace the employee; in this case the employee shall continue to carry out his work until the expiry of his contract of employment or his work permit, whichever occurs earlier.
EMPLOYMENT OF JUVENILE
It is prohibited to employ a juvenile of either sex before he/she completes fifteen years of age.
EMPLOYMENT OF WOMEN
A working woman shall be entitled to the same wage as that of a working man, if she
does the same work.
Women may not be required to work at night. The term "night" means a period of not less than eleven consecutive hours including the period from 10 p.m to 7 a.m.
The following cases shall be excepted from the clause prohibiting women to work at night.
a) In the event where the work in the establishment is stopped due to force majeure.
b) Work in responsible managerial and technical jobs.
c) Work in medical and other services as may be decided by the Minister of Labour and Social Affairs if the working woman does not normally carry out a manual job.
Women may not be employed where jobs are hazardous, harmful or detrimental to health or morals, and in such other jobs as may be decided by the Minister of Labour and Social Affairs after consulting with the competent authorities.
MATERNITY LEAVE
A working woman is entitled to maternity leave with full pay for a period of forty five days including the time before and after delivery, provided that her continuous period of service with the employer should not be less than a year, but if a working woman has not completed the said period, the maternity leave shall be with half pay.
A working woman, on the expiry of the maternity leave, may discontinue work without pay for a maximum period of one hundred consecutive or intermittent days if such absence is due to illness which does not enable her to resume work. Such illness shall be evidenced by a medical certificate issued by a medical authority attested by the competent health authority or endorsed by such authorities to the effect that the illness resulted from pregnancy or delivery.
Leave provided for in the preceding two paragraphs shall not be computed as part of other leaves.
In addition to any prescribed rest period, a working woman nursing her child shall, during the eighteen months following the date of delivery, be entitled to two additional breaks each day for this purpose, neither of which shall exceed half an hour.
These two additional periods shall be considered as working hours and shall not cause any reduction of remuneration.
EMPLOYMENT CONTRACT
The employment contract shall be made in duplicate, on copy to be given to the employee and the other to the employer.
In absence of a written contract all of its conditions may be proved by all legal means of evidence.
The employment contract shall in particular specify the date of its conclusion, the date on which work begins nature and place of work, duration of the contract in the case of contract with limited period and the amount of the remuneration.
PROBATION
The employee may be appointed for a probationary period not to exceed six months, and the employer may terminate the services of the employee during this period without giving a notice or end of service remuneration.
Appointment of the employee on probation basis in the service of one particular employer may not be made more than once. However if the employee passed the probationary period satisfactorily, and remained in service, such period of service shall be computed in the period of his service.
LIMITED AND UNLIMITED CONTRACTS
An employment contract may either be for a limited or an unlimited period. If it is for a limited period, such period shall not exceed four years and the contract may with mutual agreement be renewed one or more times for similar or shorter period/periods.
In the event of renewal of the contract the new period/periods are deemed to be an extension of the original period and shall be added thereto in calculation of the employee's total period of service.
An employment contract is considered a contract for an unlimited period effective from the day of its commencement in any of the following cases:
1. If it is not concluded in writing.
2. If it is made for an unlimited period.
3. If it is made in writing for a limited period and continues to be applied by both parties after lapse of its period without a written agreement between them.
4. If it is concluded for the performance of a specific job for which no period is fixed, or if the job by its nature calls for renewal, and has remained in force despite the completion of work agreed to.
If both parties have continued to apply the contract after the lapse of its original term or completion of work agreed to, without an express agreement, it should be understood that the original contract has been extended under the same conditions except for condition regarding its duration.
RECORDS AND FILES
Each employer employing five or more employees shall abide by the following :
1. He shall keep a special file for each employee, showing his name, profession, age, nationality, place of residence, marital status, effective date of service, pay and whatever changes effected on the pay, penalties invoked against him, injuries and vocational diseases sustained by him, date of service termination and causes of that.
2. He shall prepare a card for each employee and keep it in his personal file. The card is to be divided into three parts, one for annual leaves, the second for sick leaves and the third for other leaves. The employer or whoever acts for him shall record in this card any leaves obtained by the employee, and it shall be referred to this card whenever the employee applies for leave.
Each employer employing fifteen or more employees shall keep in each place of business or branch where he practices business, the following records and documents:
1. Register of wages: In this register names of employees are to be listed showing the dates for joining of service, and fixing the amount of daily, weekly or monthly pay, along with its benefits, or piece-meal pay, or the commission to each one of them, his working days, and the date for his final departure from work.
2. Register of work injuries: All work injuries accidents and vocational diseases sustained by the employees shall be recorded in this register as soon as they are brought to the knowledge of employer.
3. The Regulations of the Work: These regulations shall particularly define the daily working hours, weekly holiday, other holidays, necessary measures and precautions to be taken for avoiding work injuries, and fire hazards. They shall mbe displayed at visible place in the premises of business. Such regulations and any amendments thereof, will not take effect, unless they have been approved by the Labour Department within thirty days from the date they are submitted thereto.
4. Penalties Sheet: It has to be displayed at a visible place in the premises of business, listing the penalties that may be invoked on the defaulting employees, and citing the conditions and cases for putting them into operation. Enforcement of penalties and any amendments thereof should be subject to approval by the Ministry of Labour within thirty day from the date of submitting the same thereto.
REMUNERATION
Remuneration shall be paid on a working day and at the place of work in the lawfully circulating national currency.
Employees engaged on yearly or monthly remuneration shall be paid at least once a month. All other employees shall receive their remuneration at least once every two weeks.
Settlement of the remuneration payable to employees irrespective of its amount or nature shall be evidenced only in writing, by declaration or oath. Any agreement to the contrary shall be null and void even if made before the effective date of this Law.
If the employee has caused the loss, damage or destruction to any tools, machines, equipment or products owned by or kept in custody of the employer, to the extent that involvement of the employee was due to his fault or violation of the employer's instructions, then the employer has the option to cut from the employee's pay the amount required for rectifying error or restoring the item to its original condition, provided that the amount to be deducted shall not exceed five day pay each month.
The employer can apply to the competent court through the concerned Labour Department for authorizing him to deduct more than this amount if the employee is financially sound or has another source of money.
The employer may not transfer an employee from the monthly pay to the daily, weekly, hourly or piece work pay except with the latter's written consent.
WORKING HOURS
The maximum normal working hours for adult employees shall be eight hours per day or forty eight hours per week.
However, working hours for the employees of commercial establishments, hotels, restaurants, watchmen and similar operations may be increased to nine hours per day as determined by the Minister of Labour.
Likewise, working hours per day in respect of hazardous work or work detrimental to health, may be decreased by decision of the Minister of Labour and Social Affairs.
During the month of Ramadan, normal working hours shall be reduced by two hours.
Time spent by the employee in transport form his residence to the place of work shall not be included in the working hours.
Daily working hours shall be regulated in a way that no employee shall work over five hours consecutively without break times for rest, food and prayer with a total not less than one hour, provided that such times shall not be counted in working hours.
If circumstances of work necessitate that an employee works more than the normal working hours, the extra time shall be considered overtime, for which the employee shall receive a remuneration equal to that corresponding to his normal working hours plus an extra of at least 25 percent of such remuneration.
If circumstance of work necessitate that an employee works overtime between 9.00 p.m and 4.00 a.m., he shall be entitled to normal working hours pay plus an increase equal to at least 50% of such pay.
Actual overtime may not exceed two hours per day unless work in necessary to prevent substantial loss or serious accident or to eliminate or alleviate its effects.
Friday is the normal weekly holiday for all employees except for those on daily wage bases.
If the employee is required to work on Friday he shall be granted one day off for rest or be paid the basic pay for normal working hours plus 50% increase at least of such pay.
Except for labourers on daily wage an employee may not work on more than two Fridays successively.
LEAVES
Each employee is entitled to an official leave with full pay on the following occasions:
- Hijra New Year.
- Christian New Year.
- Eid Al Fitr
- Eid Al Adha and Waqfa day
- Birthday of the Prophet
- Ascension Day
- National Day
ANNUAL LEAVE
The employee must be granted an annual leave during each year of service which may not be less than:
1. Two days per month in respect of any employee with more than six months and less than one year of service.
2. Thirty days per annum in respect of any employee whose period of service exceeds on year.
In the event of termination of an employee's service he shall be entitled to an annual leave for the fractions of the last year of service.
The employer may at his discretion determine the date for commencement of annual leaves and, when necessary, he may decide to divide the leave in two parts at the most, except in cases of juveniles where vacation may not be divided in parts.
The annual leave period is deemed to include such holidays as prescribed by law or as agreed to, and any other periods of sickness, occurred during this leave and is considered as part thereof.
The employee is entitled to receive cash in lieu of annual leave days not availed by him, if he was dismissed or if he left the service, after the period of notice stipulated by law.
Cash in lieu of leave is calculated on the bases of pay received by the employee at the time of maturity of such leave.
Remuneration due to an employee plus that of the approved leave under this law shall be paid in full by the employer to the employee before the latter's departure on annual leave.
If exigencies of work necessitate that the employee work on holidays or rest days against which he receives full or partial pay he shall be compensated in lieu thereof with increase in pay by 50% of his wage, but if he has not been compensated for the same with a leave, the employer shall pay him an increase to his basic wage equivalent to 150% of the days of work.
SICK LEAVE
If the employee falls sick for reasons other than labour injury he must report his illness within a period of two days at most and the employer must take necessary measures having him medically checked up to ascertain illness.
During the probationary period, the employee is not entitled to any paid sick leave.
If the employee spends over three months after completion of the probationary period, in the continuous service of employer, and falls sick during this period, he becomes entitled to a sick leave not more than 90 days either continuous or intermittent per each year or service, computed as follows:-
A. The first fifteen days with full pay.
B. The next thirty days, with half pay.
C. The subsequent period, without pay.
Pay during sick leave shall not be made if sickness resulted from misbehavior of the employee such as consumption of alcohol or narcotics.
During the annual leave or sick leave provided for hereunder, the employee may not work for another Employer; however, if the employer has established that the employee has done this, he shall have the right to terminate the service of employee without notice, and to deprive him of the leave pay due to him.
Every employee who does not report to duty immediately after expiry of his vacation, he shall be deprived of his pay for the period of absence commencing from the day following to the date on which the leave has expired.
SAFETY
Every employer must provide adequate means of protection for the employee from the hazards of injuries and vocational diseases that may occur during work as well as the hazards of fire and other hazards arising from use of machines and other tools, and he must apply all other means of protection as approved by the Ministry of Labour & Social Affairs.
The employee must use protective equipment and clothing provided to him for such purpose and he must abide by all instructions of the employer aiming at his protection from dangers and must not act in a way that may obstruct the application of said instruction.
The employer must appoint one physicians(s) to do full medical checkup at least once each 6 months regularly for his employees who are exposed to the danger of infection with any of the occupational diseases reserved in the schedule attached hereto, and to record the results in his registers and in the personal files of such employees and the cases of occupational diseases must be reported instantly by the doctors to the employers and the Labour Department after these become certain through medical and laboratory analysis.
The employer must provide employees with means of medical care according to the standards decided by the Minister of Labour and Social Affairs in collaboration with the Minister of Health.
Each employer who employs employees in areas that are remote from cities where there is no access to normal means of transportation shall provide employees with the following facilities:
1. Adequate means of transport
2. Adequate accommodation
3. Drinking water
4. Proper foodstuff
5. Medical aid equipment
6. Entertainment and sports amenities.
DISCIPLINARY RULES
Disciplinary penalties which may be imposed by the employer or its agent upon its employees are as follows:
1. Warning.
2. Fine.
3. Suspension from work with reduced pay for a period not exceeding ten days.
4. Forfeiture of deferment of periodic increment in establishments where such increments system is applied.
5. Forfeiture or deferment of promotion in establishments where promotion system is applied.
6. Dismissal from service but reserving right to end of service benefits.
7. Dismissal from service together with forfeiture of all or part of the benefits,
TERMINATION OF EMPLOYMENT CONTRACT
The employment contract is deemed to be terminated in any of the following cases:
In the event of mutual consent by both parties to terminate the contract provided that the employee's consent is made in writing.
On expiry of the period specified in the contract unless the contract is expressly or implicitly extended in accordance with the provisions of this Law.
At the option of either party in unlimited contracts provided that the provisions of this Law regarding warnings and acceptable causes for termination of the contract without abuse are fully complied with.
The employer and employee may terminate the employment contract with unlimited period, for a valid reason at any time after conclusion of the contract by written notice duly given to other party, thirty days at least prior to termination.
The employer may dismiss the employee without notice in the following cases:
1. If the employee adopts a false identity or nationality or if he submits forged documents or certificates.
2. If the employee is appointed under a probationary period and dismissal occurred during or at the end of said period.
3. If he commits an error causing substantial material loss to the employer provided that the latter advises the labour department of the incident within 48 hours from having knowledge of the same.
4. If the employee violates instructions concerning safety of the place of business provided that such instructions are displayed in writing at conspicuous places and in case of an illiterate employee the latter be informed verbally of the same.
5. If he fails to perform his basic duties under the contract of employment and persists in violating them despite formal investigation with him in this respect and warning him of dismissal if the same is repeated.
6. If he divulges any secrets of the establishment where he is employed.
7. If he is awarded final judgment by the competent court in respect of an offence prejudicing honour, honesty or public morals.
8. If during working hours he is found drunk or under the influence of drug.
9. If in the course of his work he commits an assault on the employer, the manager or any of his colleagues.
10. If he absents himself without lawful excuse for more than twenty intermittent days or for more than seven successive day during one year.
The employee may leave the service without notice in the following cases:
a. If the employer does not fulfills his obligations towards the employee as provided for in the contract or in this Law.
b. If the employer of his legal regal representative has committed an act of assault against the employee.
If the employee has been arbitrarily dismissed, the competent court has the jurisdiction to give judgment against the employer for payment of compensation to the employee.
The court shall determine the amount of this compensation, taking into consideration the nature of work sustained by the employee, period of service and after investigation of dismissal circumstances.
The employer shall provide the employee at the end of his service and at the latter's request with an end of service certificate free of charge. Said Certificate shall include date of appointment and date of termination, total period of service, nature of work performed by him and his last pay plus allowances, if any.
Certificates or diplomas, papers and tools belonging to the employee shall be returned to him.
If work assigned to the employee allows to acquaint with the employer's clients or have access to the secrets of his work, the employer may oblige the employee that after termination of the contract he may not compete with him or take part in any business interest competitive to the employer's. Such agreement shall be valid only if the employee has reached the age of 21 years at the time of its being executed and if the agreement is limited with respect to the place, time and nature of work to the extent as is necessary to safeguard the lawful interest of business.
Any non-national employee who absents himself from work without lawful reasons prior to the end of the contract for a limited period, may not take up employment elsewhere even with the consent of the employer for one year after the date on which he absented himself from duties. And no other employer who is aware of that may employ or keep such employee in his service during such period.
If the non-national employee has notified the employer of his desire to terminate the contract with unlimited period and has absented himself from work before the end of the legal notice period, he may not take up employment elsewhere before the lapse of one year from date of absence from work, even with consent of employer, and no other employer, who is aware of the case may recruit him or keep him in service before the end of such period.
The above provisions are exempt for non-national employee who obtains prior approval of the Minister of Labour and Social Affairs before taking up another employment with the approval of the original employer.
Expenses for repatriation of an employee to his place of origin or any other place agreed upon by both parties shall be borne by the employer. If the employee after the end of his contract takes up employment somewhere else, repatriation expenses upon termination of his service shall be paid by the last employer subject to the provisions in the preceding clauses, and if the employer has failed to repatriate the employee and has not paid the repatriation expenses, the competent authorities shall do this at the employer's expense by way of attachment. If the cause for termination of contract is attributed to the employee, his repatriation will be arranged at his own expense if he has the mean to pay.
END OF SERVICE REMUNERATION
The employee who has completed one year or more in the continuous service, is entitled to the end of service remuneration at the end of his service. Days of absence from work without pay are not included in computing the period of service, and the remuneration is to be calculated as follows :-
1. Twenty one day's pay for each year of the first five years of service.
2. Thirty days pay for each additional year.
Provided that the entire total remuneration shall not exceed two year's pay.
If an employee under a contract with unlimited period has left his work at his own option after a continuous service of not less than one year and not more than three years, he shall be entitled to one third of the end of service gratuity.
If the period of his continued service is more than 3 years and less than 5 years he
becomes entitled to 2/3 of the said gratuity, but if his continued service exceeds 5 years, he becomes entitled to the entire gratuity.
If an employee under a contract with limited period leaves his work at his own option before the end of the contract period he shall not be entitled to end of service gratuity unless the period of his continuous service exceeds five years.
SAVINGS FUND
In any establishment where a saving fund is raised for employees and if the regulations of such fund provide that payments made by the employer to the fund for the account of employee is a legal commitment against the end of service gratuity, the amount of savings or benefits due hereunder shall be paid whichever is greater.
PENSION
In any establishment where a pension or security schemes or similar schemes are maintained, the employee who is entitled to retirement pension may select either this latter or the prescribed gratuity or whichever from both thus is more favourable to him.
WAGES AND PROTECTION SYSTEM
Wages Protection System (WPS) is an electronic salary transfer system that allows institutions to pay workers’ wages via banks, bureaux de change, and financial institutions approved and authorized to provide the service.
The system, developed by the Central Bank of the UAE, allows the Ministry of Labour to create a database that records wage payments in the private sector to guarantee the timely and full payment of agreed-upon wages.
The WPS covers all institutions registered with the Ministry across all sectors and industries and will benefit different categories of labour.
JOINING WPS REQUIRES
1. The company needs to be registered with the Ministry;
2. The company should have a bank account with one of the banks operating in the UAE;
3. The company should enter into contract with any bank, bureau de change or financial institution approved and authorized by the Central Bank of the UAE to provide the service. The two parties shall agree on any service fees and charges.
4. Workers’ wages will be transferred via WPS by the deadlines specified in the Ministerial Resolution No. 788 of 2009.
5. The institution will have to transfer workers' wages via WPS within two weeks of their due date, or on the dates specified in the work contract if wages are paid more frequently than monthly.
6. The employer will be responsible for all expenses incurred upon joining WPS, including bank fees, service provider charges, and all other costs. Employers are not allowed to share any costs with workers' by any means, including deducting from their wages, directly or indirectly
CONSEQUENCES OF FAILING TO JOIN WPS
Institutions failing to transfer workers' wages by the deadlines specified above will be denied the right to have new work permits. This ban will only be lifted in the month following the transfer of workers' wages in full.
Institutions that delay wages’ payment more than one month of the due date will be denied the right to have new work permits, along with all institutions owned by the owner of the violating institution, and to refer all those responsible for the violation to the court, in accordance with Ministerial Resolution No. 788 of 2009.
