UAE labour reforms – further positive news for the hiring market
Welcome to the third blog of the continuing labour reform debate. I am writing this in a time of struggling global financial markets and disruption on the streets of London so would like to spread some positive news closer to home amidst the carnage!
We have come a long way since the turn of the year towards a genuinely open labour market where freedom of movement is achievable across nearly all levels of employment.
On Monday Gulf News attributed the following statement to Ali AlShehi, Senior Administrator at the Ministry of Labour:
“We are still imposing the six-month labour ban on employees who quit their jobs before completing two years of service, but the ban can be lifted if the new employer offers the candidate a good position and an appropriate salary.”
An appropriate salary is deemed to be a minimum of Dh5,000 per month for high school graduates, Dh7,000 for diploma holders and Dh12,000 for bachelors degree holders. What constitutes a “good position” is less clear but these directives often contain an element of subjectivity to allow for some equivocation in the event that the reform does not turn out as planned.
There is no mention of when exactly the changes will come into effect, but the statement would appear to lift many of the restrictions currently in place, notably that an employee has to complete a minimum of one year of their two year contract, and also that termination of the role needs to be consensual or at the very least that the parting of ways was deemed amicable.
It is of course worth sparing a thought for the sub Dh5,000 band of employees, thought to amount to nearly 70% of the UAE’s labour population, who will not be affected by the new directive. It remains though, an extremely brave positive move from the MoL in the context of an employment market that remains fragile at best. One of the things that has always driven positive market sentiment in the UAE is vibrant hiring activity. Let’s hope this becomes a call to action for companies to move ahead with their planned headcount growth in the second half of the year.