Labour Ban and U.A.E Ministerial Decree 766 Rules for Work Permit

Ministerial Decree 766 of 2015 sets out new rules on work permits with result easing of labor bans .Rules and Conditions for granting a permit to a worker for employment by a new employer as per Decree 766

As per Ministerial Decree 766 and effective from January 2016 a new work permit will be issued and hence no labour ban arises in the following circumstances (applicability to each type of contract illustrated in the relevant columns). Clearly the changes provide for a more fluid labour market and greater employee mobility. The circumstances in which labour bans can be issued are so radically.

No	Circumstances	Limited Contract	Un-Limited Contract
1	The contract has expired and not renewed	No Ban
2	Either party unilaterally terminates the employment relationship after the expiry of the first fixed term contract provided that: a)     The terminating party gives notice to the other party as per the MOL Contract; b)     The terminating party continues to honor the contractual obligations for the duration of the notice period; and c)     The terminating party indemnifies the other party in the amount that was agreed to in the MOL Contract. This provision  appears to have been written purely with intention of addressing where an employee resigns during the term of the contract (as otherwise an employee would not be entitled to a new work permit if the employer was in breach of (b) which does not appear to be the intention of the legislation).	No Ban
Our Ban3	Either party unilaterally terminates the employment relationship provided that: a)     The terminating party gives notice to the other party as per the MOL Contract; b)     The terminating party continues to honour the contractual obligations for the duration of the notice period; and c)     The employee has completed a period of no less than six months (if the employee has a high school diploma or higher the 6 month period is waived).		No Ban
4	The parties mutually agree to terminate the contract during the course of its term, provided the employee has completed a period of no less than six months (if the employee has a high school diploma or higher the 6 month period is waived).	No Ban	No Ban
5	Where the employment is terminated by the employer through no fault of the employee; provided the employee has completed a period of no less than six months (again if the employee has a high school diploma or higher the 6 month period is waived).	No Ban	No Ban
6	Where the employer has failed to meet his legal or contractual obligations, including but not limited to when the employer fails to pay the employee’s wages for more than 60 days.	No Ban	No Ban
7	Where the employer is shutting down	No Ban	No Ban
8	Where the labour court provides a final ruling in favor of the employee that attests that is entitled to: ·         Accrued wages for no less than two months of work ·         Arbitrary or early termination compensation, or ·         Any other entitlements that the employer has abstained from granting including end-of-service gratuity.	No Ban	No Ban

The new changes certainly add transparency and clarity for U.A.E Labour Law on issues such as offer letters and termination provisions. The greater workplace mobility provisions are likely to have an immediate impact on the labour market and it will reflect in U.A.E economy

The main beneficiaries of the changes will be blue collar workers and those recruited from aboard by unscrupulous companies offering terms and conditions that are not then honoured in the UAE.