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UAE Cabinet Resolution No. 25 of 2010 introduces a number of
changes to the job transfer process in the UAE.
The new rules aim to reduce the control that employers have
over employees by liberalising the labour market and bringing it
more in line with the ILO's vision.
Employers must adjust their employment processes to cater for
these new rules.
Expatriates living and working in the UAE, are tied to their
"sponsor", usually and for most practical considerations,
a sponsor is the employer. Many expatriates come to the UAE and
take up jobs only to find that the company wasn't everything it
projected itself to be or other opportunities emerge that offer a
better fit, but they feel that their hands are tied, either because
they are on a fixed term contract or because of the
dual-inconvenience associated with the six-month ban before they
can change jobs and the required No-Objection Certificate (NOC),
that many ex-employers like to withhold.
It is exactly this sort of rigid framework that the new UAE
Cabinet Resolution No. 25 of 2010 (the Resolution) seeks to amend.
However, the Resolution only contains basic details and more
information is required to overhaul the transfer process and bring
the UAE labour market in line with the vision and recommendations
of the International Labour Organisation's (ILO).
What is known is this: As from 1 January 2011, an employee who
has either (i) completed his/her contract that has a fixed term of
at least two years; or (ii) completed at least two years on his/her
unlimited term contract and who gives the requisite notice of
termination, may transfer to a new employer and obtain a new work
permit under the sponsorship of the new employer, upon the amicable
culmination of their employment with the first employer, without
the need of a NOC (i.e. consent from the previous employer) or the
imposition of the previously mandatory six-month ban.
An employee on a fixed term contract that is longer than two
years needs to be careful as this new rule would only apply to an
employee that has completed the relevant fixed term (i.e. they will
not be exempt even if they break the contract after a period of two
years). In fact, such an individual will face a one year ban
according to Article 128 of the UAE Labour Law if he/she breaks
his/her contract prior to the expiry of the fixed term.
Another point to note is that those who are currently serving
their six month ban and who have completed at least two years with
their previous employer without breaking a fixed term contract, may
have their bans lifted as from 1 January 2011.
As with any rule, there are exceptions to the two-pronged
transfer requirements (completion of at least two years and
amicable termination) above. These requirements can be waived in
the following instances:
1) if the employer does not comply with or honour its statutory
and contractual obligations towards the employee; or
2) if the employee is terminated without just cause and a
complaint is filed with the Ministry of Labour and the courts rule
in favour of the employee
The reality of both these exceptions is that it will usually
take more than six months for the courts to even make this sort of
determination.
3) if the employer transfers the employee to another firm that
the employer owns or has a stake in;
4) if the employee is classified in one of the three top classes
of workers, i.e. those who earn above AED5,000, AED7,000 or
AED12,000 and who are usually considered as "skilled and
professional".
In reality, the new system will give employees 30 days once
their contract expires to find a new job and sponsor. This
doesn't seem very different from the "30 day grace
period" that one is given when a residence visa is cancelled,
which is often used for the same purpose.
In terms of fees, the "job switch" fees will no longer
apply with the lifting of the six-month requirement; currently, the
new employer has to pay a fee of AED5,000 to lift the ban. However,
visa sponsorship fees may, in many instances, exhaust the
difference, especially now that the visas will only be issued for a
period of two years instead of three.
The previous formalities for the transfer of sponsorship, with
the compulsory six month ban and requirement of the NOC, gave the
employer the upper hand and limited the employee's free
movement. The new rules aim to reduce the control that employers
have over employees by liberalising the labour market and bringing
it more in line with the ILO's vision. Many of the changes
promulgated by the Resolution are intended to modify the practices
of some employers under the previous sponsorship system and provide
more balanced employee rights. In time, we will witness how these
changes play out and affect the actual freedom of movement in the
UAE.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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