Introduction
For the last few decades, socioeconomic and political developments in UAE have made the country one of the leading destinations for expatriates in the Gulf region. These developments have been made possible by the boom in the oil industry. Expansion in oil and service industries has resulted in huge infrastructure developments calling for expatriate labor to supplement the Emirati’s skills. With the arrival of expatriates, the UAE’s population has risen drastically. According to government reports, expatriates make up to 80% of the country’s total population. Just like Qatar and Oman, the country is faced with numerous human resource challenges.
To secure its future stability, the country must enhance the skills of its citizens, promote their employment opportunities, and retain its expatriates. Currently, the country has formulated and implemented some reform efforts to tackle the challenges. In this regard, this paper focuses on the country’s new Emiratisation schemes, pension plans for expatriate workers, and proposed amendments to the employment law.
New schemes to encourage Emiratisation
Emiratisation is an initiative supported by the government of the United Arab Emirates to tackle the imbalance in the employment of the local population about that of expatriates. The imbalance has been evidenced in the private sector where 93% of the total workforces are expatriates (Khondker 2009, p. 4). Over the last decade, several labor market policies have been developed and implemented to encourage the employment of the natives through Emiratision programs.
These programs are aimed at increasing the number of natives in employment sectors. As compared to education and training initiatives, Emiratisation programs would ensure that the number of natives in the employment sectors is increased within a shorter period. However, in the last few years, it has been noted that not all Emiratisation goals have been realized. Therefore, new schemes have been developed and implemented to enhance Emiratisation. Some of these plans include the Khalifa fund, the Seha Emiratisation drive, the Absher initiative, and Etihad Emiratisation programs (Balakrishnan 2011, p. 34). Through these programs, the government aims to increase the number of natives employed in the private sector.
Through the Khalifa fund scheme, the government has provided another boost to Emiratisation empowerment. According to Ahmad Al Tayer, who is in charge of the Human Resource Development Committee in the banking and financial sector, the program will eventually increase the number of native employees in the private sector. Ever since its launch, the scheme has been the best nationwide initiative for the empowerment of Emiratisation in the private sector.
After the launch of the Khalifa fund, UAE has taken the issue of the absorption of the Emiratis as an imperative nationwide act for everyone. The fund program offers subsidies to private firms. Through this, the firms are encouraged to employ and retain the skilled and unskilled native labor force while providing incentives that will enable the wages to be the same as those offered in the public sector.
Another current Emiratisation scheme being implemented is the Absher initiative. Sheikh Mohammed, who is the current vice president of the United Arab Emirates, started the initiative. Apart from this initiative, the vice president has participated in prioritizing the creation of job opportunities for the local Emirati people. The Absher initiative is one of the vice president’s initiatives aimed at enhancing Emiratisation empowerment specifically in the private sector.
The program is based on four major pillars. These pillars are expanding employment opportunities, increasing training and rehabilitation of the local workforce, and encouraging the private sector to employ more workers that are native. In general, through this program, Emiratisation and its schemes have become the top priority in the Country’s government.
Pension plan for expatriate workers
Globalization has enabled employees to seek better jobs, make the most of their skills, and earn good salaries from across the world. However, expatriates experience challenges in acquiring equal rights as the native employees. Similarly, the hosting country loses a lot of revenue when these expatriates transfer a bulk of their salaries to their native countries. In UAE, these challenges have been ongoing for the last few years. Currently, the country is rolling out some ambitious pension schemes aimed at addressing these issues. In the end, the initiative would enhance the country’s economic situation. Equally, through the program, the expatriates would benefit from the scheme.
Expatriates would contribute regularly to the pension fund program that is more secure and guarantees them returns. These schemes are beneficial, unlike the funds the expatriates send back to their native countries, which are often mismanaged by their relatives.
From the year 2010, there have been plans to reform expatriate pension schemes in UAE. These plans are aimed at daunting expatriates from transferring a bulk of their wages back to their native countries. On 8 February 2013, The Wealth Builder Plan was made public by the country’s national bank and other international companies. Notably, the plan will allow foreign employees and their employers to remit some of their funds into a range of investment funds. In the end, other financial institutions in the country are expected to adopt the plan. Unlike in the other Asian economic giants such as Singapore, it should be noted that in UAE the government has distanced itself from offering the pension schemes
Proposed amendments to the employment law
The UAE employment law controls employment relations in the country (Terterov 2006, p. 45). This law applies to all employees in the country regardless of their nationality. However, the law excludes a few categories of people such as DIFC’s employees. Notably, the labor law stipulates that employers who employ unemployed locals should make known to the labor department in writing within 15 days after the date of employment.
Similarly, the law requires the nationals of UAE working in the private sector to be qualified for the same social security as those working in the government. Likewise, the law mandates companies that have employed more than 100 as exhibited in the ministry of labor database to appoint UAE nationals in the positions of government relation officers to act as a link between the company and the Ministry of Labor. In general, the labor market law is intended to increase the share of nationals in target sectors through education and training sectors.
Currently, several changes have been made to the law and more plans are underway to implement some amendments to the law. In one of the proposed amendment clauses, DIFC requires employers to adopt DIFC Employment laws. Through this, the employers will be required to make clear how the lawful position related to the DIFC Employment Law applies to their workers. The chief aim of this amendment clause is to eliminate a requirement that necessitated employers to satisfy the minimum international employment standards. In the past, the minimum international employment standards have generated some heated debates as the standards vary from one country to another.
Equally, another amendment clause seeks to abolish a prerequisite that requires employees to be given documented declarations related to their employment at the onset of their employment. Instead, the new clause seeks to mandate the employers to provide their employees with written contracts way before the onset of their employment. Similarly, through another amendment clause, a clause that required an employer to dispatch an employee’s wage within seven days after the termination of his or her employment will be abolished. The new clause will increase the dispatching period to 14 days. If an employer fails to abide by this regulation, he or she will be penalized. Similarly, the new amendment clause will allow employees to seek extra compensation from their bosses.
Additional amendment clauses being worked on include working time, leave, maternity rights, time off work, non-discrimination, and termination of employment clauses. All these amendments try to tackle some of the discrepancies in UAE’s employment law and attempt to outline precision on certain facets of the law.
Conclusion
In conclusion, there is a great need to involve the local nationals in the job market since they are part of the development in their country. This will reduce the overdependence on the government and increase the standards of living for the Emiratis. Similarly, these initiatives will also reduce the disparity between the private sector’s employment of expatriates and the locals. Therefore, the government should aim at providing an environment that is profitable to both private and the public sectors to prevent conflict of interest.
References
Balakrishnan, S 2011, Etihad contributing to the UAE vision through emiratisation. Emerald Group Publishing Ltd. Bingley.
Khondker, H 2009, Social change in the United Arab Emirates challenges of migration and Emiratisation. Middle East Institute. Singapore.
Terterov, M 2006, Doing Business with the United Arab Emirates. Blue Ibex. Dubai.