UAE opens consulate in Kerala

The UAE has opened a Consulate General in Kerala, India, and appointed Jamal Al Zaabi Consul-General to Kerala, to further ties between the two countries.

The opening of the second UAE consulate in India comes within the context of bolstering the growing relations between the two countries, UAE Ministry of Foreign Affairs and International Co-operation said.

"I am delighted to announce the opening of the new UAE consulate in the Indian state of Kerala. It represents an important achievement and a new boost for bilateral relations between the two friendly countries," said Under-Secretary at the UAE Ministry of Foreign Affairs and International Co-operation, Mohammed Mer Al Raisi, in a ceremony in the presence of Kerala Governor P Sathasivam, Kerala Chief Minister Pinarayi Vijayan, Assistant Under-Secretary for Consular Affairs at the UAE Ministry of Foreign Affairs and International Cooperation Ahmed Elham Al Dhaheri, Ambassador of the UAE to India Dr. Ahmed Abdulrahman Al Banna, a delegation from the Ministry of Interior and a group of notable political figures and businessmen from the UAE and India.

The opening of the consulate in Kerala is aimed at furthering co-operation and partnership between the two countries in the business sector and trade and economic cooperation as well as at the level of social and cultural exchange, he added.  

In collaboration with the interior ministry, the consulate will provide visa services for UAE citizens visiting Kerala and southern India, as well as residents of Kerala in particular, Al Dhaheri said, and noted this would further facilitate and speed up the entry of Indian workers to the UAE via e-gates at the country's points of entry.

Kerala, he said, is a global business and trade hub and an integral part of the fast-expanding partnership between the UAE and India. This achievement would enable the two countries to continue to build strong relations in Kerala, an important economic partner of the UAE, he added.

"We have a lot in common, from trade and investment to workforce. A large number of workers, who come to the UAE every year to realise their job ambitions and improve their living standards in our country, hail from Kerala, UAE Consul-General to Kerala Jamal Al Zaabi said.

The new consulate will play an effective role in bolstering ties with India through enhanced trade relations and increased cultural exchange and cooperation between the UAE and Kerala, he added.

The UAE Consulate General in Kerala will support the partnership between the two countries in the government, business and social sectors, consular services, diplomatic documents as well as resources for trade and exchange between them.

Non-Competition clauses in U.A.E Labour law

U.A.E Labour law permits non-competition clauses to be included in a contract of employment as a way of protecting a business, and while they are legitimate, such post-termination restrictions can be difficult to enforce.

 Article 127 of UAE Labour Law specifically states that where an employee performs a role which allows him to become familiar with confidential information, the employer may put in place an agreement with provisions that prevent an employee from working with a competing business. But there are limitations. Any non-compete clauses must be reasonable and must only limit conduct in a way that is necessary to protect legitimate business and legal interests. The clauses must be limited in duration, geographical scope and the nature of the restriction. Restrictions of more than six months are unlikely to be upheld and the employer would have to prove that they have been disadvantaged in some way.

A non-competition agreement may be signed before or during the term of the employment, but as per the law, it will only come into effect on termination of the employment contract. The employers may include a clause in the labour contract or sign an additional agreement banning the employees from working for competitors for a certain period.

In order to apply non-competition clause certain conditions, have to be fulfilled. The agreement shall be, as far as time, place and nature of work are concerned, limited to what is necessary to protect the legal interests of the employer. If the job assigned to the employee allows him to know the secrets and know-how of the employer’s business dealings, then the employer may impose non-competition clause

To impose a non-competition clause against an employee, the non-competition agreement signed between the parties is to be restricted as per the provisions mentioned in the UAE Civil Code and the labour law. Such a stipulation shall not be valid unless it is clearly restricted to certain time, place and type of work, in a sufficiently determined manner so as to constitute a real protection of the legitimate employer’s interests. If the employer terminates the employee or the employee terminates the contract due to a reason that is ascribed to the employer’s fault, then the non-competition conditions shall not be applied against the employee.

Wage protection decree in U.A.E, ensures employees’ full salaries on time

Abu Dhabi: The Ministry of Human Resources and Emiratisation will start implementing the newly launched wages protection decree on 3rd October 2016. The decree, launched by Saqr Ghobash, the Minister for Human Resources and Emiratisation, ensures employees’ full payment of their salaries on time.

Maher Al Obed, Assistant Undersecretary for the Inspections Sector, said: “The decree fairly contributes towards labour market stability as it safeguards employees while keeping business owners interests, salaries paid on time is a major contribution towards labour rights protection which is highly recognised by the UAE.”

“We value such decisions as it promotes labour relations which in turn secures a balanced labour market productivity, and eventually turns out with positive outcomes for both labourers and employers,” he said.

The decree highlights companies employing over 100 workers. Such companies must pay wages within a period not exceeding 10 days from the registered payday in the (WPS) wages protection system, if they fail, the ministry will stop granting them any additional work permits starting from the 16th day of delay.

“Two main scenarios should be considered in this matter, firstly, salary delays occur usually if the company fails to pay wages a month from the due date, the second, which refers to completely refraining wages, starts after entering into the second month, however, the decree shall refer to each case in a different matter,” Al Obed said.

According to the decree, if a company delays wages a month from the due date, which means the company has entered into refrainment period, the ministry shall inform the judicial authorities and other related parties to take all necessary punitive measures against the violating company, additionally, the ministry halts other companies owned by the same employer, plus forbid any upcoming projects foreseen by the same owner.

Furthermore, if a company continues to refrain wages, the ministry shall take necessary measures to use the company’s bank guarantee, then slapped by a downgrade to a third category company, plus enable their workers' mobility options to other companies.

“If the company fails to pay wages for 60 days from the due date, then administrative fines shall follow, in addition to registered fines for failing to pay wages a month from the due date, as stated above in the first scenario,” Al Obed added.

Administrative fines reach Dh5000 per worker’s delayed wage pay, stretching a maximum of Dh50,000 dirhams in events which include multiple workers protesting about deferred wages past 60 days.

Fortunately, the ministry lifts bans on violating companies allowing them to apply for new work permits only if they promptly paid deferred wages during the first late month, while the ban lasts for 60 days if companies fail to fund wages for more than two months.

According to the decree, companies that pay refrained salaries yet record such violations repetitively shall face a doubled duration ban.

On the other hand, if the ministry notes salary delays or refrains by a company that employs less than 100 employees, the current regulations shall apply, which includes work permits ban to fines to court referrals, however, only if the company fails to pay wages within 60 days. If the company repeats such violations over the span of one year, then, in this case, the ministry shall apply penalties declared for companies hiring over 100 workers.

The decree clearly states that the ministry shall not proceed with any transactions with companies that did not register in the (WPS), in addition, owners of these companies would be kept aside until the registration in the (WPS) is completed

UAE bankruptcy law effective from 2017

In a media round table, the UAE’s Ministry of Finance (MoF) today shared details of the federal bankruptcy law which was recently approved by the UAE Cabinet on September 4.

The federal bankruptcy law falls under the directives of His Highness Sheikh Khalifa bin Zayed Al Nahyan, UAE President, and His Highness Sheikh Mohammad bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, and Ruler of Dubai.

The new law works on identifying different ways to avoid bankruptcy cases and liquidation of the debtors’ funds, a comprehensive financial restructuring outside the scope of the court, composition procedures and the possibility to get new loans under terms set by the law.

Regulations will also prevent individuals from bypassing the law as there are a number of punishments, including a five-year prison sentence, as well as fines up to Dh1 million, the Ministry said in a media statement today.

The final draft of the law, which is considered an important addition to the UAE legislative system, was reviewed by Obaid Humaid Al Tayer, Minister of State for Financial Affairs.

The bankruptcy law sets up a new regulatory body the “Committee of Financial Restructuring”.

The UAE Cabinet will decide on the number of members and entities that will represent the committee, and will administer the committee’s law and its procedures.

The committee is in charge of: overseeing the procedures of financial restructuring outside the scope of the court, appointing experts in the field of financial restructuring, establishing an electronic record of individuals issued against them a bankruptcy ruling, by either imposing restrictions as ordered by the court or the loss of eligibility under the provisions of the law.

The committee is also responsible for organising and sponsoring initiatives that raise awareness among the public on the specification and objectives of the law, submitting periodical reports on the achievements, suggesting amendments to any provision of the law and determining any fees incurred, as well as any other tasks or mandates stated by the law or the UAE Cabinet.

Al Tayer highlighted that the Ministry sought to implement a law that is based on modern legislative and economic principles, while taking into consideration the global developments and changes taking place in the economic and business sectors.

These efforts have led to implementing the bankruptcy law, and distinguishing it from other laws on a regional level as well as in developed countries.

The law was set to match various bankruptcy cases, determine all legal tools to restructure the debtor’s business in accordance with specific terms and conditions as well as a legislative framework.

“Mature economies have proven the need to implement a bankruptcy law in each country that wishes to strengthen its economic status. The bankruptcy law is considered as one of the most important pillars for the local economy, as it provides protection for all parties, in addition to its pivotal role in attracting capital, in a safe and attractive investment environment and providing a protection legislation and legal acts,” Al Tayer added.

The law includes raising credit levels and financial guarantee within its legislative priority to strengthen the confidence among investors and boost the economy by enabling the financially distressed businesses to restructure, and pay their debts and obligations without disrupting the production process in accordance with transparent legal framework.

This makes it the only law which includes those specifications in the Arab region.

Which businesses are covered by the law

The law is implemented on:

-Companies that were established under commercial company laws, as well as the companies that were not established under the commercial company law

-Semi- or fully-owned companies by the federal or the local government where their establishment legislatives are under this law

-Companies and institutions established in free zones and which do not have provisions to regulate composition procedures or restructuring bankruptcy according to the Federal law No. 8 of 2004 concerning financial free zones
Any trader and licensed civil company
Al Tayer added: “We are delighted to adopt the final draft of the bankruptcy law, to encourage entrepreneurs who seek a secure investment environment to direct their investments in the country, while strengthening their trust in the legislative and legal infrastructure in the UAE that implements clear and transparent laws preserving their rights and achieving balance between the creditor and the debtor as well as prioritise creditors with guarantees over the ones without guarantees.

“The bankruptcy law will contribute in supporting the strategic plans adopted by UAE to develop its economic, financial and legislative structure.

"The law will also raise the UAE’s competitiveness levels in international reports, which will support the sustainable economic growth and enhance the national economy, which in return support the sustainable economic growth and promote the national economy on a global level.”

UAE Cabinet approves final draft of federal bankruptcy law

The final draft of the federal bankruptcy law has been approved by the UAE Cabinet, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, said on Sunday.

The legislation aims to "promote our economy’s attractiveness for investments and to facilitate business", according to a tweet from Sheikh Mohammed.

Last week the economy minister said that the law was needed to help owners of small- and medium-sized enterprises weather a slowing economy and rising levels of bad debt.

Sultan Al Mansouri said that he expected the law to be finalised within a matter of months but that it would need to be approved by the Federal National Council before it becomes law.

The law will put a moratorium on sending people to jail for bounced cheques until a restructuring plan for business owners has been agreed with creditors, a senior government official told Over the past two years a number of small business owners in the UAE have fled the country leaving unpaid loans in their wake in fear of being jailed for defaulting on debt and other financial obligations.

For years, observers have urged the government to put in place a raft of legislation to make it easier for SMEs, the lifeblood of the economy, to thrive.

Earlier this year, consultancy firm KPMG recommended in a report on small businesses that the most urgent of those changes is the implementation of a comprehensive bankruptcy law to make it easier for SMEs to cope with insolvency in ways other than fleeing the country.

Abdul Aziz Al Ghurair, the chief executive of Mashreq and head of the UAE Banks Federation, said in November that some small business owners had skipped town, leaving about Dh5 billion of unsettled loans.

In May, however, Mr Al Ghurair said the potential fallout from rising levels of SME bad debt had been contained as banks work with business owners to restructure debt.