UAE: New Classification for Companies on the Way

The UAE’s Human Resources and Emiratisation Minister has announced a new classification for companies is on the way.

It will be introduced on 1 June.

It has been introduced to respond to business owners’ demands.

It will protect employee’ rights and encourage innovation and promote the SME sector.

Companies who pledge to comply with the relevant laws and regulations on Emiratisation will be offered incentives.

The classification has been issued by Cabinet Decision No. 18/2022.

Companies will be split into three distinct categories by an interactive automated system which will enable a company’s classification to be changed transparently, in line with the procedures carried out by each company or transactions.

Companies will have to pay the service fees which correspond to the category they are in.

Companies who are in the first category will benefit from significant fee exemptions.

Companies will be able to be promoted to the first category if they meet at least one standard. These include increasing their Emiratisation rate at least three times above the target, cooperating with the Nafis programme to train at least 500 citizens annually or are a venture owned by a young citizen in line with the relevant approved standards.

They also include them being one of the training and employment centres which support implementing the Workforce Planning Policy by promoting cultural diversity or by being active in the targeted sectors and activities determined by the Cabinet based on a recommendation from the Ministry.

Companies which do not meet any of these criteria but have committed to the law and the cultural and demographic diversity promotion policy will be automatically classified in the second category.

All other companies found by the Ministry to have violated Federal Decree-Law No. 33/2021 and its Implementing Regulations (Cabinet Decision No. 1/2022) or the relevant resolutions regulating the labour market, or standards for protecting labour rights, or lack of commitment to promoting cultural and demographic diversity in the labour market will be categorised in the third category.

They may also be categorised in the third category if they commit other violations under Ministerial Decision No. 209/2022.

This includes issuing a final ruling that the facility committed a human trafficking crime, used or recruited workers without obtaining work permits, provided incorrect data, documents or information to the Ministry, violated obligations on workers’ wages, housing and safety standards, resorted to fake Emiratisation practices or committed other serious violations.

Service fees for work permits and transfer fees will not exceed 250 AED for companies in the first category for two years. The fees will be 1,200 for companies in the second category for two years. Companies in the third category will not be able to benefit from any fee rebates and the fees for issuing or renewing work permits will be 3,450 AED for two years.

Activities involving the employment of UAE and GCC citizens are exempt from these fees. Also reported in Alroeya on 24 May 2022. For full story, click here.

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UAE: Probation Period Explained

Emaratalyoum, 16 May 2022: The UAE’s Human Resources and Emiratisation Ministry has confirmed the employer has the right to appoint any employee for a trial period of up to six months from the date of starting work.

However, there can only be one probation period.

If the employee successfully passes the probation period and continues to work, the trial period will be counted within the period of service.

If the employer wants to terminate the employee’s service during the probation period, they must notify the employee in writing 14 days before the date of termination.

If the employee wants to move on, they must notify the original employer in writing within a month of their desire to terminate the contract.

The new employer has to compensate the original employer with recruitment costs or contracting with the employee, unless otherwise agreed. For full story, click here.

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UAE: Controls for Collecting Personal Information of Customers Clarified

Alroeya, 12 May 2022: The UAE’s Central Bank has clarified the controls for collecting personal information by entities which practice marketing, issuing and managing insurance policies.

The Central Bank has issued a Circular to this effect.

They have issued it to all insurance companies, insurance agents and brokers and banks which market insurance policies operating in the country.

It includes guidelines on the personal information which may be collected for insurance policies.

All insurance companies, insurance agents, brokers and banks which market insurance policies must comply with the guidelines when collecting personal information through application forms, service offers, claim forms, or any other type of document. provided by the customer, whether in writing, electronically, or through call centres.

The Bank clarified the instructions apply to collecting information related to all types of insurance and Takaful products, including life insurance, fundraising, health insurance, property and liability insurance and any other type or category of insurance products.

The personal information collected by the parties involved in the marketing, issuing and/or management of insurance policies should be limited to specific, explicit and legitimate purposes.

The aim is to ensure compliance with the regulatory and legal requirements and provide adequate advice to recommend appropriate insurance products when necessary.

For full story, click here.

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UAE: Penalties for Abstaining from Submitting Documents to Judiciary Clarified

Al Bayan, 10 May 2022: The UAE’s Public Prosecution has clarified the penalties which will be imposed on those who don’t submit documents to the judiciary.

Under Article 317 of Federal Decree-Law No. 31/2021, anyone who is assigned by law to submit a document or anything else which is useful in proving a fact submitted to the judiciary and don’t do so, will be jailed for up to six months.

Alternatively they may be fined up to 5,000 AED.

For full story, click here.

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