Sunday, December 12, 2010

New labour rule will not end current Labour card validity

Private sector employees holding a valid three-year labour card will not be compelled to rectify or adjust their status when the recent ministry decision becomes effective, a senior official said.

Humaid bin Deemas, acting Director-General of Ministry of Labour (MoL) told that the recent ministry decision on cutting the labour card validity from three to two years would not affect the actual holders of valid labour cards.“Starting January 2011, only workers with expired cards will be obliged to renew by applying for the two-year labour card. New applicants will also fall under the new decision upon issuance of their labour cards. Actual holders of valid cards will keep them until their expiry. Moreover, from now till January, things will go on as usual as far as applying for the three-year labour card is concerned.”

Benefits of the new rule

The move to reduce the validity of the labour card to two years has come following a thorough study and analysis based on successful labour practices in other countries. “If you look elsewhere, like for example the Gulf countries, you will see that labour cards are usually issued with a validity of a year or two years maximum. The contractual relationship resulting from such a relatively short period has proved to pay off for both parties’ interests,” Humaid said.

The Labour Ministry’s senior official said it is a good and acceptable idea which enhances and regulates the movement and flexibility within the labour market. “In a recent survey we did, we found that about 70 per cent of employers have to cancel labour cards and cut short the employment of workers, who were originally hired for three years. The cancellation would come before a solid two-year period has passed. According to our statistics, employers would save more than Dh600 million annually.”

This would be rewarding to workers too as the new decision will help them feel more free and flexible to change their work if they are not satisfied. They won’t have to wait for three years before moving on to a new job.
Humaid shrugged off the possibility that the new decision would result in a rush of applicants at the service counters of the ministry.

“We have adequate procedures and a mechanism put into place to help implement new policies and decisions taken by the ministry. Discarding the paper work has been one advantage for a smooth processing of transactions. The e-system allows the employer to check on his establishment’s status and other data pertaining to his employees online and fill in applications likewise. Many other services are available online, including the follow-up on fines resulting from violation of the labour law.”

Meanwhile, a spokesman of the Abu Dhabi-based EMKE Group welcomed the decision saying it will streamline the manpower market as well as reduce the financial burden on local companies at a time when the global economies are facing tough times.

The spokesman said: “We also agree with the fact that some employees do not complete the full term of their employment, which is three years. So we have to make new recruitments and apply for new labour cards, visas, health insurances and other relevant paperwork. With this change in the law, the market is ought to streamline further.”
Hassan Mirza, owner of a transport company in Abu Dhabi, also welcomed the new decision to reduce the life of the labour card for all employees in the private sector as, he added, it will result in cost cutting for local companies.
He said: “We pay for our workers’ health insurance, labour card and residence permit. We have been paying fees for a period of three years for each worker. There were cases when our employees did not complete even one year with us, and the money for the two years goes in waste. It was a huge financial lose for us. The new law reduces the financial burden on companies that have more than 50 employees