UK: Managing A Workforce In The GCC: An Overview

Last Updated: 3 June 2013
Article by Sara Khoja and Rebecca Ford

On 7th May, Clyde and Co's MENA employment group in collaboration with lawyers from ASAR in Bahrain and Kuwait, as well as from Jihad Al Taie in Oman, held a half day seminar on the intricacies of Managing a Workforce in the GCC. The session provided a strategic overview of the employment and workforce management aspects of operating in each of the six GCC countries and the basic resources needed to face the challenge of adhering to varying labour laws in each of the GCC countries.

The session was chaired by Sara Khoja (who also covered KSA), with Rebecca Ford covering the UAE, Steven Brown covering Bahrain, Alessandra Zingales covering Oman, Antonio Michaelides covering Qatar and, Ahmed Zekaria covering Kuwait. Each of the speakers focused on a particular country in the GCC and on aspects that they regarded as either topical or important from a practical perspective in that jurisdiction based on their own practical experience. There were also a number of common threads running through the afternoon and, in particular, the Q&A session at the end. 

Attendees were provided with materials that gave an extensive overview of the labour laws in the UAE, Bahrain, Saudi Arabia, Oman, Qatar, and Kuwait and in addition to the individual, country-specific presentations and Q&A session with the panel. The speakers also sought to give strategic and practical guidance on issues such as operating common policies and workforce nationalisation which are likely to be the topics of future seminars in this series. 

Over 50 people attended the event at the JW Marriott Marquis Hotel, Sheikh Zayed Road, Business Bay, Dubai, which (based on initial feedback from attendees) delivered in its promise of providing an in-depth, practical, regional analysis of key aspects of the labour laws of each of the GCC countries. 

Speaker Overview 

United Arab Emirates (UAE)

Rebecca Ford, Partner, Clyde & Co 

Rebecca discussed in some detail the employment of foreign nationals and the issues and considerations associated with dual contracts where employers operate onshore as well as in the free zones. She also discussed the differences in immigration and visa/work permit requirements when employing onshore in the UAE and in the DIFC. Rebecca then looked at the risks and issues that may arise when terminating local contracts, offering her own views as to what employers should be considering in such circumstances, and concluded with a brief overview of the recent amendments to the DIFC employment law and DFSA Rulebook in relation to bonuses. 

Kingdom of Bahrain (Bahrain)

Steven Ray Brown, Associate, ASAR - Al Ruwayeh & Partners 

Steven focused predominantly on the new Bahraini labour law which came into force in the autumn of last year, looking in particular at its implementation and how this has affected and is expected to affect the legal landscape in the short, mid and long-term. He discussed certain of the key changes made to the old law and the implications this had for those already operating in Bahrain and those seeking to operate in Bahrain in future. Steven also discussed the relationship between end of service gratuity and social security for nationals and workforce representation.  

Kingdom of Saudi Arabia (KSA)

Sara Khoja, Partner, Clyde & Co 

Sara focussed in great detail on saudiazation, the Nitiqat system and the consequences of this for both expatriate workers and KSA-nationals. Following on from this, she also addressed the recent immigration crack down which ultimately led to an amnesty as a result of many illegal workers not going to work for fear of being caught by the authorities. Sara completed her jurisdiction review of KSA by answering some of the common questions in relation to contracts for expatriate workers (i.e. duration, content, form) and end of service gratuity and also highlighted certain labour law reforms currently proposed. These will be the subject of a separate client bulletin in the near future. 

Sultanate of Oman (Oman)

Alessandra Zingales, Legal Adviser, Jihad Al Taie

Alessandra compared Oman to certain of the other GCC jurisdictions given that, in comparison, the proportion of expatriate workers is much lower and discussed how the Omanisation policy actually helps to maintain this position. She went on to talk about the recent change to the working week and the decree that has made Friday and Saturday the weekend as well as the fact that there are proposals currently to make public holidays the same for private and public sector employees. She ended by discussing the processes involved in setting up business in Oman and the impact of certain free trade agreements.  

Qatar

Antonio Michaelides, Associate, Clyde & Co 

Antonio focused on a number of issues that have received attention in Qatar recently, including exit permits and how to deal with employees with outstanding debts on termination, in particular the impact of this on terminating employment and the consequences for the employer (for example, regarding the maintenance of sponsorship and payment of end of service entitlements). Antonio also discussed the difference in position between the state of Qatar and the QFC in relation to end of service gratuity entitlement and discrimination in employment, before looking at the recent proposal to require employers to pay a health insurance premium for an employee and his family despite there having never been such a requirement previously.  

Kuwait

Ahmed Zakaria, Partner, ASAR - Al Ruwayeh & Partners 

Ahmed discussed recent nationalization drives in Kuwait and explained the difficulty faced by companies in the private sector in attaining the required proportion given that the majority of Kuwaiti nationals seek employment in the public sector. Ahmed discussed whether changes such as those proposed in Oman with regards making public holidays the same for the public and private sector could help change the situation but doubted they would. Ahmed also looked at the current position with end of service gratuity and how this is affected by the current social security system laws and proposed amendments to this.

Going forward, the MENA Clyde and Co Employment Group will be providing further seminars on employment issues in the GCC such as operating common company policies and dealing with workforce nationalization. 

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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