Introduction
The purpose of this paper is to discuss the history of Emirates Telecommunication Corporation (Etisalat), assess the main functions of the company, consider the mission, vision, goal, and values of the company, and analyze how the company maintains its employment contracts. In addition, the paper focuses on determining the implications of the UAE labor law for hiring new expatriate employees as well as examining the benefits of having a trade union for both the employer and employees of the Emirates Telecommunication Corporation (Etisalat).
An Overview of the History of the Company
In 1976, the Emirates Telecommunication Corporation (Etisalat) was formed as a joint-stock company between International-Aeradio-Limited (an England- based corporation) and local collaborators; however, in 1983, the ownership was restructured as the UAE government took over sixty percent share of the corporation, whilst the residual forty percent remained publicly traded; afterward, in 1991, the UAE-central-government enacted Federal Law No 1.
This law granted the Abu Dhabi-based company an entitlement to offer telecom-services within the UAE and also among other nations; in addition, it granted the company an entitlement to release credentials of owning, importing, producing, exploiting and running telecom tools; as a result, Etisalat got both authoritarian and controlling permission that completed the monopoly of the telecom-giant in the Emirates.
For preserving the nation’s monetary progress, the legislation contained clauses for the advancement of the telecom sector in the UAE; conversely, amplifying exchange-lines from 36002 in 1976 to 73701 in 1998 signified the expansion of the Emirates Telecommunication Corporation; in addition, in 2001, after PTCL initiated the cellular-operations, it began business outside of Islamabad under the name of Ufone.
Later, Ufone turned into a segment of Etisalat following the privatization of PTCL and now Etisalat is considered as the Middle East’s largest operator and the GCC’s third-largest corporation; in addition, it is the biggest-contributor apart from the oil-sector to advancement agendas of the government and obtained various awards from across the country for its nationalization-plan (Etisalat 1).
Main Functions of Emirates Telecommunications Corporation
According to Bloomberg Businessweek (1), Etisalat offers telecommunications-services, media-services, related-equipment, and associated covenant and consultancy-services globally; however, the key function of Etisalat is to proffer portable and fixed-line voice and data-services, TV-services, and Internet and roaming-services; moreover, it proffers cable-infrastructure-solutions, planning, designing, civil-works, maintenance, project-management, directory-services, and specialized coaching courses in areas of telecom, IT, business, finance, and HRM.
Other functions of the company include proffering financial-clearing and settlement-services in order to deal with settlement of GSM-roaming-records and net-settlement of financial-accounts amid customers or roaming-partners, submarine-cable-installation, and repairing services; on the other hand, it proffers SIM-cards, payment-solutions, smart-cards, and data-management-services and owns and administers real estate properties including office-buildings, telecom structures, shelters, transmitters and additional structures (Bloomberg Businessweek 1).
In addition, according to Etisalat (1), the Emirates Telecommunication Corporation provides e-business facilities, customer service facilities, management facilities, and mobile messaging facilities and serves individuals, corporations, telecom businesses, internet service providers, content providers, and mobile operators; on the other hand, Etisalat is supported by e-Company, Ebtikar, Emirates Data Clearing House, Emirates Internet-Exchange, Etisalat Academy, Etisalat University College, UAE-Lab, etc.
Etisalat (1) suggests that the company has a market value of about $20 billion and yearly turnover of over $8.7 billion with operations in 17 nations throughout the Middle East, Africa, and Asia and with an estimated two million user and 53000 employees; moreover, its satellite network provides services over two thirds of the earth’s surface. The following table shows its functions in different countries along with certain information –
Table 1: The functions in different countries. Source: Self-generated from Etisalat (1).
Mission, Vision, and Goal
The mission statement of the company is to work jointly as a team for gratifying clients in the telecom and IT industry in a gracious and competent way and its vision and goal is to create a planet where abilities of individuals are not restricted by remoteness, and where individuals could easily remain close to their beloved ones
Values of the Company
Etisalat (1) suggests that the core values of the company are to conduct ethical business, to conform to its corporate social responsibilities, to construct communities and to improve livelihoods and objectives for the future; as a result, the company is vigilant about cultures, traditions, and lifestyles in all the markets in which it operates.
It focuses on enhancing associations, building friendships, and staying updated with rapid technological changes; in addition, its CSR program focuses on environment and health and shares the optimism of the communities as well as assisting to surmount troubles, which hamper advancement; conversely, its ethical practices include initiatives in the areas of humanitarian support and sustainable improvement
How the Company Maintains Employment Contracts
The management of the companies have the opportunity to recruit employees for a limited or unlimited period (Article 38); however, the terms and conditions are fixed for the staff in the former case, but it would not exceed four years period, and the rule of the employment contract will impose for the second situation. The aim of the government to consider this system because the UAE should require a lot of employees to complete both public and private projects; therefore, both employers and employees need to incorporate suitable provisions to execute the projects successfully.
The employers can terminate at the end of the contract period or can renew the agreement; however, according to article 120 of the UAE labor law, the employers can terminate contract for the violation often specific reasons, such as, false identity or documents, end of probationary period, error causing substantial material loss, violation of safety policy and so on.
In addition, the employers can terminate contract for many other reasons, for example, the employees fail to carry out fundamental duties, reveal any secrets of the establishment, court orders, found drunk or under the influence of drug, commit an assault on the employer, and absent without lawful excuse ((Ministry of Law 36).
In this situation, the employers will have not to pay if employers terminate contract under article 120, but employers will be liable to pay compensation in accordance with the terms and conditions of the employment agreement and basis of wage for remaining period of contract; on the other hand, parties must give 1 month notice to terminate by mutual agreement.
However, Etisalat Telecommunication Corporation follows all the provisions of the UAE labor law to maintain relationship with the employees, for instance, Etisalat has terminated 3% of employees from engineering and sales divisions to reduce operating costs and increase profit margin of the company; therefore, it hired a consulting company to estimate the impact on the parties.
In addition, Etisalat will assess the importance of the dismissal and give sufficient compensation because the UAE labor law has included rights for the employees to take action against the employers for arbitrary termination (unjustified reason); however, this company gives the opportunity to the employees to leave the job with and without permission by mentioning a specific deadline in the agreement. At the same time, Etisalat incorporates some particular criteria in the employment contracts, such as –
- Basic wage and fixed allowance or performance;
- Start and end date (renewable);
- characteristics of the job;
- Duration (limited or unlimited term)
- Other terms and conditions of the company;
- Termination policy and so on
According to the annual report 2011 of this company, Etisalat strictly maintains the employment contracts and provides many other facilities to the staff, for example, best-performing workers were rewarded with promotions, certificates and wage increments to increase employee satisfaction rate.
Implications of UAE Labour Law for Hiring New Expatriate Employees
Bupa (2) reported that Abu Dhabi is famous to the expatriate employees as they get the chance to develop their economic position and live in an excellent cultural environment. However, Bupa (2) stated that foreign employees could enter without difficulty and get work permit along with job confirmation though they need to find a job before arriving; also, they have the scope to work in both oil and non-oil sectors.
According to the UAE Labour Law, the employers will complete the process to give work permit by which foreign employees can get a visa for three years; moreover, the new expatriate can open a bank account for their convenience, but they must have to provide residence permit, no objection certificate, and other essential documents.
Most importantly, this Law has incorporated many issues to develop a relationship and to minimize the disputes between employers and employees, for instance, provisions of employment contracts for the employees of limited and unlimited period, remuneration, leave, termination policy, training agreement, work permit, and other facilities ((Ministry of Law 6). At the same time, this law will help the expatriate employees to enjoy their rights while the workers can take action illegal action of the employers, for example, they can sue within one year if the employers fail to obey legal provisions or terms of the employment contracts (Ministry of Law 8).
On the other hand, Al Tamimi & Company (9) stated that the highest approved working hours for an adult worker is eight hours per day (exclude break for shift, the time traveling to and from work) though it can be nine hours in some special sectors; in addition, administrative post holders must perform additional hours without overtime (Article 65 & 66).
However, the employers of the organizations must consider labor law at the time of hiring new expatriate employees because this law is applicable both for national and international employees; in addition, the employers have to design terms and conditions of the employment contracts in accordance with this law (Ministry of Law 7 and Al Tamimi & Company 3).
Here, it is important to mention that organizations or employers must have to submit an application to the Ministry; additionally, the employers have to complete certain immigration procedures to get approval from the ministry before attempt to recruit any expatriate employee in this country and (Al Tamimi & Company 4). According to article 13 of the UAE Labour Law, the employers need to provide formal written labor contract (include all terms and conditions) to ensure work permit and give bank guarantee as security for end of services to recruit any expatriate employee (Ministry of Law 9 and Al Tamimi & Company 3).
However, expatriate employees are bound to work in accordance with terms of employment contract and the employers would pay daily, weekly, monthly or yearly basis (basic salary is important when calculating end-of-service gratuity); in addition, employers have to pay other benefits including the cost of living allowance, grant, reward for performance, accommodation and travel allowances (Al Tamimi & Company 7).
To mitigate dispute related with remuneration, employers need to prove that they provide salary, but the employees need to prove non-payment of wages; as a result, it is significant to maintain sufficient records and books otherwise the court would assume that the salary was not paid (Al Tamimi & Company 8). According to t article 74 of this law, all companies including Etisalat must provide annual leave, sick leave and so on; however, workers are entitled to an official holiday with full salary on the subsequent situations –
Al Tamimi & Company (11) further stated that workers have to report about injuries or illness (provide medical certificate) if they would like to obtain sick leave; in such case, they will not get any salary in the probation period, otherwise, they will get full salary for fifteen days in accordance with article 81 of this law.
Benefits of Having A Trade Union For the Employer of Etisalat
It is important to note that Etisalat currently does not have any associations with any trade union. However, there are numerous benefits of trade unions for both the employer and employees of the company; as a result, it is essential for Etisalat to consider those factors. For example, the employers of Etisalat could have the following benefits because of trade union:
- According to ILO (63), trade union ensures that workplaces are safe and assures quick and fair resolution and identification of the troubles; in addition, the union representatives assist to lower accident rates at work and make it easier, better, and more effective for the employer to deal with the workers rather than dealing with them individually
- Linking with trade union develops reliance amid the workers and affords a system for discourse between employees and employers that assists to create confidence and obligation in the workers’ panel that brings noteworthy productivity benefits for companies; moreover, recognising a union also mean that there is a particular point of contact for discussing terms and conditions for workers
- According to Ethical Trading Initiative (1), assuring protected working atmosphere helps to lower stress-related ailing health caused by, for instance, extensive working time, being intimidated or working in deprived quality surroundings; moreover, evidence indicates that unionized workplaces are safer to work on that has the supplementary benefit for employers of considerably lowering the costs of ill-health and mishaps
- It lowers the burden of audits – trade unions are organized to work with employers to recognize and tackle poor working atmosphere and non- compliance with appropriate standards; on the other hand, trade unions help employers to get more benefits than conventional audit and social observance methods, hence lowering reliance on social audit (Ethical Trading Initiative 1)
- It will improve staff retention of Etisalat – trade unions will consult with employers on behalf of the affiliates to uncover solutions to meet business needs, whilst assuring that labors are getting fair treatment; so, by giving workers strength and supporting them when they are discontented, unions considerably develop staff retention and decrease absenteeism
- ILO (97) noted that it helps to make better business decisions as unions have a broad perception on matters affecting firms and industry awareness that could be extremely valuable to Etisalat; in addition, updating and consulting with well-informed union representatives could also assist employers to appreciate proper corporate strategies at the right time
- Conversely, a unionized-system will also give Etisalat workforce an influential incentive to stay at work for extended hours and make them work more productively, which would be greatly beneficial for employers; unions also endorse equality and keenly prevent unfairness and assist to endorse equal opportunities at workplace making workplaces more attractive and reducing employer’s time spent on addressing grievances
- When it comes to affording admittance to learning abilities, unions assist employees with to access to education and training, and this is a key priority for unions; conversely, research suggests that unions have steady positive upshot on the degree and variety of training that is offered to employees; consecutively, high-skilled employees bring productivity benefits for employers
- Linking with trade union saves costs, as proper detection of troubles at work could lead to considerable savings, for instance, by lowering the expenses employers confront because of mishaps, ill health, or employee turnover; it also works with employers to recognize efficiencies and cost savings, because both employers and employees possess a shared interest in business success
Benefits of Having A Trade Union For the Employees of Etisalat
It is important to note that the key function of trade union is to assist workers from all spheres; it had been created in order to defend employees from being oppressed and to ascertain that they get proper salaries and working-conditions; in fact, its role is to bargain with employers on behalf of members and negotiate labor-contracts by collective bargaining
As a result, the employees of Etisalat could get a huge number of advantages if the company becomes unionized; for example, Mishel and Walters (1) pointed out that unions can increase salaries of unionized employees by approximately twenty percent and elevate rewards (which comprises both earnings and benefits) by approximately twenty-eight percent; additionally, workers could get the following benefits:
- It diminishes income discriminations as it increases incomes more for low/middle-wage employees than for high-wage employees, for blue-collar than for white-collar employees, and for employees not possessing college-degrees; moreover, strong unions set a pay standard that nonunion employers follow and the impact of unions on nonunion wages is almost as large as the impact on union wages
- In addition, there are many comprehensive benefits for unionized employees, amid which the most interesting one is fringe benefit – unionized employees are more likely to receive paid leave, and about eighteen to twenty-eight percent more likely to get employer-provided health insurance and pension plans; conversely, these employees also get more generous health benefits than non-unionized employees
- Unionized employees get benefit of enhanced pension policy – they are likely to have a guaranteed benefit in retirement, twenty- four percent more likely to be covered by health insurance paid by employers, and their employers contribute twenty- eight percent more in pensions; moreover, they pay eighteen percent lower healthcare deductibles and a small share of the costs for family-coverage
- Mishel and Walters (1) pointed out that unionized employees obtain more holiday time and more total paid leaves, as unions play an essential role both in protecting legislated labor rights, like health and safety, overtime, and medical leave and in implementing those rights in workplace; moreover, these employees are more conversant, and more likely to benefit from social insurance programs
- However, it is notable that modern economies have experienced a fall in trade union power because of a decline in manufacturing and a rise in service sector industries, although service sector jobs tend to be part-time and temporary (for example, like Etisalat), and so unions are needed to protect workers in this kind of jobs. Considering all these factors, it can be said that it would be greatly beneficial for both the employees and employers of Etisalat to connect with unions.
Works Cited
Al Tamimi & Company. Labour Law in the UAE. 2011. Web.
Bloomberg Businessweek. Emirates Telecom Corporation: (ETISALAT:Abu Dhabi). 2012.
Bupa. Expat guide: Abu Dhabi. 2011. Web.
Ethical Trading Initiative. Working with trade unions to improve homeworkers’ conditions: Benefits for retailers and suppliers. 2010. Web.
Etisalat. Annual Report. 2011.
Etisalat. Company Profile. 2012.
Etisalat. Corporate Social Responsibility. 2012.
Etisalat. History. 2012.
ILO. Trade Unions and the Global Crisis. 2011. Web.
Ministry of Law. UAE Labour Law – Federal Law No. (8) Of 1980 Labour Law and Its Amendments. 2012. Web.
Mishel, Lawrence and Walters, Matthew. How Unions Help All Workers. 2003. PDF file. Web.