Sunday, January 2, 2011

The UAE Ministry of Labour divided establishments in to Three Groups- Resolution effective from January 2011

The UAE Ministry of Labour has divided establishments in groups based on the extent of their compliance with labour legislations, systems and standards, cultural diversity approach and on-time payment of salaries, provision of accommodation, and emiratisation quota.
The changes were made by Minister of Labour Saqr Gobash who issued resolution number 1187 of 2010 on regulations and criteria of classification of firms in implementation of the cabinet resolution number 26 of 2010 which was issued on August 11, 2010. Article 10 called for introducing practical and real mechanisms for voluntary Emiratisation.
Gobash said his ministry is keen to create a balanced working environment that stimulates economic growth and facilitates the process of productivity through a sound management of skilled human capital. "Our ethical and legal mandate requires us to strive to explore and roll out mechanisms that embody the sincere commitment of the political leadership to put in place a safe and stable environment and to protect rights of all categories in the communit," he said.
The new system replaces the current cultural diversity-focused classification which has been implemented since 2005.
"The new classification system was designed after consultation with prominent local labour market experts and embraced best practices from experiences of international community and neighboring countries," the minister added.
"While the old system revolved primarily on the cultural diversity mix in firms, the new one allows the firm to move higher on the classification scale giving them slew of rewards based on their commitment to certain standards like emiratisation, wages and housing," he indicated.
He said the new resolution divides companies into three main categories: The first group which tops the scale; The second which includes the current three categories A,B and C and the third one which along with the first are the newcomers.
The resolution ranks the firms if they meet the following conditions:
1. The percentage of workforce should not be less than 20 from the professional levels (1-2-3) of the total manpower.
2. The wage of a worker should not be less than Dh12,000 if he is in level 1, Dh7,000 in 2 and Dh5,000 in 3.
3. Emiratisation percentage should not be under 15 in these levels.
The creation of this first group aims at opening up new professional jobs for Emaratis and avoid 'mock' emiratisation," he said.

For the second group, the resolution arranged firms as A,B and C according to cross-cultural policy. A company is in Group A if it does not commit itself to this policy by at least 25 per cent. A non-compliance of 25 to 50 will place the company in Group B and C if the percentage crosses the 50 mark.
The resolution grants firms until the January 1, 2011 to correct their status.The minister added the resolution introduced a black point and penalty system against offenders which can downgrade firms to a lower group and drop black points after one year.
As for the third group, the resolution indicated that a firm in the second group which accumulates 100 black points will be downgraded to the third group. A company can be placed in this group if it is convicted by a court for recruiting infiltrators, commits trafficking in persons, provides wrong information regarding wages protection system and fails to observe emiratisation policy. Financial fines on any of these irregularities can range between Dh15.000-20,000.