August 29, 2017

UAE Labour and Immigration Update

The last couple of months have witnessed a number of resolutions being published in the UAE Official Gazette which primarily seek to amend fees, guarantees and violation fines payable to the Ministry of Human Resources and Emiratisation (the Ministry) and amend existing services offered by the Ministry of Interior's Citizenship, Residence and Ports Affairs Department. This article highlights the recent changes and their potential impact.

Changes to Classification of Establishments

As highlighted by Clyde & Co in an article last year, the UAE has had a system of classification in place since 2010 which classifies companies into three categories according to certain criteria, designed to incentivise employers to adhere to existing Emiratisation requirements.  The system of classifications was initially introduced by Cabinet Resolution No. 26 of 2010 (2010 Resolution). 

A new Cabinet Resolution, Resolution No. 11 of 2017 (2017 Resolution), was recently published which seeks to amend certain provisions of the 2010 Resolution, primarily amending the provisions pertaining to the payment of bank guarantees.  Of importance to note are the following key changes:

  • Category Two has from date of inception been subdivided into 3 bands (A, B and C).The 2017 Resolution introduces an additional band – band D.What currently remains unclear is the criteria establishments must satisfy in order to fall into Category Two, Band D and to this extend further regulatory clarification may be needed.
  • As established by the 2010 Resolution, companies are required to pay a bank guarantee sum as part of the visa and work permit application process.This sum varies depending on the company's classification.The 2017 Resolution does not amend the fees payable, but rather confirms the amounts and introduces the amounts payable for companies falling within the new Category Two, Band D.
  • As a welcomed addition, the list of circumstances where companies may be exempt from paying bank guarantees has been extended.In addition to the previous five exemptions, companies falling under any band within Category Two or Category Three are now exempt from paying the applicable bank guarantee where the new employee is classed as a 'skilled' employee.This additional exemption is likely to ease the burden for employers meeting such criteria and drive positive recruitment of skilled employees within the UAE.  

The 2017 Resolution comes into effect six months following its publication and is therefore expected to come into force on 1 December 2017.  

Ministry's New Fees Structure

On the 31 May 2017 new Cabinet Resolution No. 15 of 2017 (2017 Resolution) was published which seeks to amend the fees and fines payable to the Ministry and ultimately repeal the previous fees and fines published pursuant to Cabinet Resolution No. 40 of 2014 (2014 Resolution).    

Fees payable to the Ministry for their services have been amended.  The fees table has been extended to include the newly introduced Band D within Category Two (as discussed above). Certain fees and categories have been split to the extent that different fees have been allocated to employees considered 'skilled' and those 'with limited skill', which consequently will result in employers potentially paying different amounts depending on which category they fall under and whether the employee to which the service pertains to is considered to be 'skilled' or 'with limited skill'.  Other changes include a reduction to some of the fees, an increase to others and removal of some services altogether, such as services for individuals over the age of 65 years.

The 2017 Resolution also changes the fine structure to the extent that some fines have been reduced and capped, some increased, some caps have been removed and additional categories have been introduced.  Of particular interest is that the new resolution introduces a grievance procedure allowing parties subject to an administrative fine to appeal such decision within 10 business days from the date of being notified.  The Ministry will in turn issue their decision within 20 days of the appeal.

The new resolution is set to go through a staggered implementation phase over the coming months, with the new fees for services provided by the Ministry expected to come into effect around the 1 December 2017, being 6 months following the resolution's publication date and some administrative fines expected to come into force this summer.

Update on Immigration Services and Fees

Fees for certain services previously available from the Ministry of Interior have recently been removed pursuant to Cabinet Resolution No. 17 of 2017 which amends Cabinet Resolution No. 22 of 2014.  In particular, services and fees relating to obtaining, renewing, replacing or amending assistant service worker's employee card and obtaining an exit statement for travellers have been abolished.