The Ministry of Human Resources and Emiratisation, formerly the Ministry of Labour (the Ministry), has recently issued a string of new ministerial resolutions and decrees designed to address gaps in the employment regulatory framework and reinforce existing legislation affecting employers falling under the Ministry’s jurisdiction.
1) Ministerial Resolution No. 591 of 2016 was issued on 30 May 2016 and obliges employers with more than 50 employees, earning a gross monthly wage of less than AED 2,000 (pursuant to the Wage Protection System), to provide accommodation to those employees. The implementation of this resolution will take effect in two stages. The first phase came into effect on 1 September 2016 and obliges existing employers to comply and provide such accommodation by 1 October 2016 and the second phase will come into effect on 1 January 2017 and oblige all employers to comply.
2) Ministerial Resolution No. 713 of 2016 was issued on 26 June 2016. This new resolution enables students between the ages of 12-18 years to work and train in the private sector. The resolution confirms that students between the ages of 15-18 years may be granted work permits and those between the ages of 12-18 may be granted training permits (with priority being given to UAE nationals) provided written consent is obtained from the individual’s guardian. Previous legislative constraints pertaining to the employment of minors will continue to apply. Whilst the effects of this new resolution remain to be seen, it should provide the opportunity for young individuals to participate in compensated internships and give them exposure to the workplace.
3) Ministerial Decree No. 739 of 2016 with regards to the UAE Wage Protection System will come into effect once it has been published in the official gazette. The new law repeals the previous decree, Ministerial Decree No. 788 of 2009, and in general any provision that is contrary or inconsistent with its articles. It further imposes the following key provisions:
(i) It reconfirms that companies registered with the Ministry must pay their employees’ wages through the Wages Protection System.
(ii) Failure to pay an employee’s salary within 10 days of the due date will amount to late payment and failure to pay an employee’s salary within one month of the due date will amount to a refusal to pay the salary (unless a shorter period is specified under the contract).
(iii) For employers with over 100 employees, where the Ministry discovers that the employer has delayed in paying an employee’s salary, it will:
• for a delay of at least 10 days, issue the employer with a warning which provides that the Ministry will not issue any permits after payment has been delayed for 16 days;
• for a delay of at least 16 days, block the employer’s ability to grant work permits (Late Payment Penalty);
• for a delay of at least 30 days, impose a variety of additional sanctions including informing the judicial authorities and any other relevant authorities to exercise caution when dealing with the employer, refusal to register new licences for the employer, a reduction in the employer’s classification to the third class, an extension of the ban on granting work permits to the remaining establishments of the employer without notification and/or ban on transferring employees to other employers (Refusal Penalty); and
• for a delay of at least 60 days, impose administrative fines on the employer.
(iv) For employers with under 100 employees, the penalties set out above will only be applied where the violation is repeated more than once in the same year.
(v) A Late Payment Penalty (i.e. a block on granting work permits) will be removed immediately upon payment by the employer of the outstanding salary. A Refusal Penalty will however be maintained for two months following payment by the employer of the relevant salary and may be extended for longer periods in the event that the employer repeatedly fails to pay the salary.