UAE to safeguard jobs of nationals
The United Arab Emirates labour ministry on Wednesday said it would regulate the dismissal of nationals working in the private sector, raising another level of protection around the local workforce as the ravages of the financial crisis cut deep into the Gulf state.
Issued by Saqr Gobash, labour minister, the order threatens to raise concerns among investors in the Arab world’s second-largest economy as the financial crisis forces companies to trim staff levels that ballooned during the six-year petrodollar boom.
Property and financial companies, especially in Dubai, have been shedding staff since the credit crunch triggered a real estate crash in the emirates. The gloom has spread to other previously vibrant sectors, such as tourism, with the recently opened Atlantis hotel cutting staff and Dubai hospitality giant Jumeirah planning redundancies.
Any company wanting to terminate the employment contract of a UAE national must be able to prove that the worker is inefficient or has violated labour laws:
- absenteeism
- arriving to work under the influence of alcohol (if most are Muslim, is this really a problem???)
- stealing from the company
- forging identity documents
- non-performance of basic duties. "The decision is to regulate the termination of Emiratis working in the private sector. It does not deprive the employer of the right to hold Emiratis accountable for their low-performance," said Bin Deemas.
- committing mistakes, which result in substantial material loss for the employer
The economic downturn will not be reason enough to make Emirati staff redundant. Even in cases where Emiratis underperform or their positions are scrapped in a general staff reduction, they must be retained in other roles.
Employers seeking to dismiss locals will have to apply to the labour ministry 30 days in advance of any termination order, Humaid bin Demas, acting director general of the labour ministry, said at the ministry’s Dubai office.
One human resources officer, who declined to be identified because of the sensitivity of the issue, said the move could affect the flexibility of employers and hurt Dubai’s competitiveness. Emiratis already have stronger employment rights than expatriate counterparts, and firing nationals is tricky, say employers.
A corporate headhunter, however, said the policy was a “knee-jerk reaction” by the Government that “could backfire”.
“I have lived in Middle East and Saudi Arabia for over 16 years. where they had passed policies like this that have led to a huge problems in the workforce,” said Jack Montgomery, an independent executive-recruitment consultant based in Dubai. “In Saudi you will find locals not hiring locals because when they do hire them they find it extremely difficult to shift them. “Companies would now avoid hiring Emiratis when once they looked for nationals as a matter of pride and as the face of the organisation.”
Mr Montgomery said companies with a large number Emirati employees – especially banks, where up to half the employees are Emiratis – would be affected the most. “Usually when companies are laying off people it means it is either folding the company or getting rid of those who underperform. So now, where would companies get the money to retrain Emirati staff that they can’t shift to another department? Especially in a time like this it would be difficult.”
The ministry passed the order after studying a proposal from a government body that promotes local employees in the private sector, which highlighted the case earlier this month of 20 nationals made redundant by local conglomerate Al Futtaim Group, which has extensive retail and real estate interests.
Al Futtaim Group had said they were terminated because the company was "restructured in light of the current global financial crisis." In reference to about 20 Emiratis who were made redundant last week by Al Futtaim Group, Mr bin Demas said: “It is our social responsibility to keep all Emiratis in work, and I would like to play down fears that people are losing their jobs because they are not and you can see that by the number of complaints we have had in the last year.” He said the Al Futtaim layoffs were the only cases of Emiratis losing their jobs for economic reasons.“Our concern is the concern of all Emiratis, all companies and expatriates and I would like to move and reassure everyone and calm down talks of hysteria.”
UAE nationals form a tiny proportion of the private sector workforce, preferring the more comfortable public sector, along with “quasi-governmental” companies, which, while nominally private, maintain close links to the government.
But some businessmen are worried the order will make it even harder to discipline and manage local staff. The ministry shrugged off such concerns. “How can 15,000 locals out of a 3m private sector workforce be such an issue?” said Mr bin Demas.The onshore financial sector could be particularly affected, but not the Dubai International Financial Centre, which like other free zones is exempt from such labour legislation.
Under the existing Emiratisation quota system, banks have to recruit nationals at a rate of 4 per cent annually, and insurance companies at 5 per cent. Any commercial company that has more than 50 employees has to recruit UAE nationals at a rate of 2 per cent.
Feddah Lootah, acting director-general at the National Human Resource Development and Employment Authority (Tanmia), said this decision will curb the practice of some companies to exploit the current global financial situation to escape from their Emiratisation responsibilities.
I'm not sure what all the fuss is about. It is somewhat rooted in the "national pride" movement and no one can fault them for trying to protect their own in these shaky times; the EU and the US are talking protectionism too. This law covers 0.5% of the overall work force. Granted, most of the work force are foreigners and the law is intended to benefit the locals. However, it covers only that minority portion of UAE nationals in the private sector and further reduces the count by excluding those employed in the free-zones. It was the result of a complaint by 20 individuals (0.13% of those who are covered). Two of the big property developers Nakheel and Emaar (both "quasi-government" companies) are huge employers of Emiratis, their layoff announcements have been among the most shocking. I'm curious how many of those were Emiratis (who are not covered by this week's law.)
A very miniscule percentage of the overall workforce (0.0006%) have managed to get an entire law dedicated to their cause ... and this Mr bin Demas thinks this will not be a management problem how? Perhaps he is correct in that it is probably not HIS problem. Same guy also says he "would like to play down fears that people are losing their jobs because they are not". There's a LOT of sand in the UAE and his head is firmly buried under a big freakin' pile of it!
Bottom line is the squeaky wheels got greased and some of the big wigs got some mileage out of the media coverage.
In surfing around the net and reading some comments and forums, I was surprised to see the resentment of some locals towards the ex-pats telling all of us to go home and one actually used the word "invasion". There were also apologies from other locals for their country-men's rude attitude. I have personally experienced mostly kind hospitality from of the people here so long as you respect their culture and country (which I try to) and allow them to feel they are superior (OK, whatever).
In general (but by no means absolutely), Emiratis in the workforce are not thought to be the most productive and responsible of employees. They do their job but usually on their own time and terms. They seem to be rather unmotivated as a whole and the government is trying to implement initiatives to raise their level of education, their language skills (English and Arabic!) and their expertise in subjects that matter (Engineering, business) instead the soft sciences (art history, anthrology).
Interestingly, there is a difference between the "have" Emiratis and the "have not" Emiratis. I believe that in the Northern Emirates, many of the locals live a much lower standard than in Dubai and Abu Dhabi. I have not spent much time there so can't really say.
When I first arrived here last year, the Emiratis were described to me as not being able (or willing) to do the menial jobs but not equiped to take over the high level executive-type jobs. Without the expats to wait tables, clean toilets, pump gas and do business here, there would be no modern Dubai. They like to enjoy the fruits of the "new" Dubai (as they should) but they also like to resent those of us here building it for them and with them. You can't really have it both ways.
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