Look after your labour force to keep authorities on side

Alex McGeoch, head of employment, Hadef Al Dhahiri and Associates, outlines some of the potential problems for contractors in managing workforce headcounts in the UAE and suggests ways in which they can stay on the right side of the Ministry of Labour.

Contracting companies face a common problem – how to ensure that the company always has in place a sufficient number of employees with the requisite skills and experience to carry out the work in hand.

To some extent this is a difficulty for all businesses. But because of the particular characteristics of the industry – large payrolls, variable levels of activity, project deadlines and penalties – contractors are likely to spend more time than most employers dealing with recruitment issues.

And in Gulf countries, where hiring expatriate personnel involves elaborate and time-consuming bureaucratic procedures, the difficulty for contractors in


achieving their staffing objectives, is compounded.

In the UAE itself, it is fair to say that during recent years employment law and policy have been in a state of almost constant development.

The changes introduced by the government are aimed at both enhancing the work opportunities for the citizens of this country and also improving the lot of the ordinary employee.

As such they are to be welcomed.

Nevertheless these initiatives have presented employers in the UAE – in particular contracting companies and other labour-intensive concerns – with considerable challenges in terms of their ability to maintain appropriate staffing levels and ensure continuing legal compliance.

So, can contractors make life easier for themselves? The answer is yes, if a few simple guidelines are followed.

The prudent contractor should plan ahead its labour force requirements for its next project.

The willingness of the Ministry of Labour (MOL) to approve a company�s employee recruitment applications largely depends on whether the total headcount applied for is within the applicant company�s allocated expatriate employee quota.

This quota may well need alteration from time to time, but by careful consideration of the company�s immediate and future commitments, the contractor should be able to make an accurate assessment of its staff requirements during the relevant trading period.

Having done this, the contractor should immediately notify MOL of these requirements, giving them

enough information to enable its officials to determine whether the staff requirements are realistic or not.

A main concern of MOL is to eliminate the practice of illegal labour utilisation – that is the recruitment and unauthorised ‘renting out� of workers to industry.

The contractor also needs to make certain that it has adequate accommodation in which to house the workforce – a point upon which MOL officials will want to be satisfied before allocating staffing quotas.

Size and quality of the proposed accommodation will be important factors in persuading MOL officials that the company should be allocated a fair employee quota.

For a contractor seeking speedy recruitment application approvals it is also critically important to maintain a clean sheet, for compliance purposes.

Every contractor should faithfully observe its financial obligations towards its workforce.

This means paying them on time, paying all earned bonuses and overtime and meeting end of service gratuity commitments promptly and without unwarranted deductions.

Compliance also entails always keeping employee records in good order (wage payments, annual leave and sick leave), and meticulously observing safety regulations and reporting accidents without delay.

In addition, the company should be achieving its emiratisation targets.

The objective of this is to achieve the highest possible MOL employer classification.

If an ‘A� rating proves elusive (perhaps because of difficulty in obtaining sufficient numbers of qualified Emirati staff), then the company should aim to achieve – and retain – a ‘B� classification.

The reward for achieving class ‘A� status with MOL will be total exemption from certain MOL transaction fees and substantial fee reductions in other cases.

Achieving ‘A� status should also ensure that the company�s MOL transactions are fast-tracked.

Companies in category ‘B� pay MOL fees at the standard rate and are entitled to have their transactions processed – but only with ‘reasonable� speed.

For an employer to slip down to category ‘C� classification (the consequence of repeated or flagrant non-compliance) is very serious.

Not only will penal MOL transaction rates be imposed but the processing of company applications will be subject to delay and even outright refusal.

Moreover, unless the company improves its compliance record, it could even be struck off MOL�s register of employers.

If a contractor follows these guidelines, it should remain in good standing with MOL.

This will increase the chances of securing allocation of the required staff quotas and ensure that subsequent requests for employment visas will be processed in a timely fashion.

Given the government�s emiratisation programme, it is also important for the contractor to have a good relationship with Tanmia.

This will demonstrate the company�s support for the emiratisation scheme and ensure that it has the pick of young qualified Emirati nationals.

Finally, the process of change is unlikely to cease.

Even now, MOL committees are finalising important amendments to the Labour Law which are likely to have considerable impact on contractors.

It is possible that accommodation for workers will need to meet minimum standards; ‘renting out� may become yet more tightly controlled and,should the new five-day week become statutory for the private sector, overtime payments may also have to be made for Saturday working.


“If a contractor follows these guidelines, it should remain in good standing with MOL [the Ministry of Labour].

This will increase the chances of securing allocation of the required staff quotas and ensure that subsequent requests for employment visas will be processed in a timely fashion.�

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