The UAE government announced new labour laws will be introduced. From 1 January 2011, expatriate skilled and professional workers will no longer be required to obtain clearance from a former employer in order to take up a new position.
Unskilled and semi-skilled workers will still need their employers' consent, but only in the first two years of a job. For lower-level staff, companies will lose the right to stop them from getting another job if the firm fails to meet basic employment standards, for example, by not paying salaries for 60 days.
Under the current system, employers can refuse to issue clearance, or no-objection certificate, forcing expatriate staff to go abroad for six months before taking up a new position. That often makes it all but impossible to secure another job and expatriates from Arab countries, India and Africa are hardest hit, as they require visas to enter the UAE, unlike European and US citizens, who can enter the country visa-free and work, albeit illegally.
Saqr Ghobash, the Minister of Labour, said the move was intended to "improve the labour market and limit any wrong practices".
The government also announced that the retirement age will rise from 60 to 65 and that minimum wages for professional and skilled expatriates will be introduced.
December 24, 2010
Analysis and Forecast: Decreasing Risk
This is a dramatic move by the UAE as it essentially affects over three quarters of the population – the expatriates. The UAE labour laws have been subject of much criticism by international human rights groups as forms of modern slavery. Despite strong opposition from local businesses, the government has proceeded with reforming the current laws and has announced that further reforms are on the way.
This is also good news on the economic front as it makes the UAE labour market more versatile, and attract greater high-level talent. The UAE has struggled in past years to attract enough high-end expertise and in the best of cases, was unable to ensure it stays largely due to the labour laws. The more versatile labour market will contribute to the country’s diversification efforts and the creation of a more experienced work force.