The Ministry of Human Resources and Emiratisation (the Ministry) recently announced three key changes to the resolutions regarding Emiratisation which will come into effect from 1 January 2017. The first change requires construction and industrial sector employers, with a workforce of 500 or more persons, to employ an Emirati health and safety officer. The second change requires companies employing 1000 or more employees to register the company on the Ministry's electronic system, Tasheel, and to employ at least two Emirati employees to access that system. Lastly, the third change provides that certain establishments' Emiratisation categories can be upgraded from one classification level to another if they meet certain reduced Emiratisation levels. This article examines these recent changes and their potential impact on UAE employers.

Emiratisation – Overview

The UAE Labour Law (Federal Law No. 8 of 1980, as amended) provides that employment is a right primarily of UAE nationals and, non-nationals should only be recruited if there is no suitably qualified UAE national available. The Emiratisation programme has been in place for over a decade and is set out in a variety of Ministerial decrees and regulations. There are minimum percentages of Emirati staff required within specific sectors and also generally in the private sector. In addition:

  • If an employer employs more than 100 staff, an Emirati or GCC national public relations officer (PRO) must be appointed.
  • All companies wishing to employ new secretaries must contact the National Human Resource Development and Employment Authority (Tanmia) who will nominate UAE nationals for the post.
  • The role of "Human Resources Manager" should be carried out by a UAE national.

In practice, the quota of HR manager and secretary requirements are not rigidly enforced; however, it is advisable for employers to comply with the Emiratisation requirements as practice may change at any point and given the benefits associated with compliance (discussed below).

In contrast, the appointment of a PRO is effectively mandatory as, if an employer does not appoint an Emirati or GCC national PRO; the Ministry may impose administrative penalties (for example, the blocking or freezing visa applications). It is possible to engage a private Emirati or GCC national PRO who holds the relevant PRO ID card to deal with the Ministry and the immigration department on behalf of the employer, as opposed to employing someone directly.

Notably, the Emiratisation requirements do not currently apply in the free zones.

Change 1 – Emirati health & safety officer

On top of the above noted requirements, from 1 January 2017, companies operating in the construction or industrial sectors with 500 or more employees will also be required to employ an Emirati in the role of occupational health and safety officer according to a new resolution (Ministerial Resolution No. 711 of 2016).

In contrast to the PRO appointment requirement, the UAE national must be directly employed by the employer in the health and safety role and the role cannot be fulfilled by a GCC national. Notably, the applicable resolution provides that the Ministry will provide the necessary data and citizen cadres to assume the role of occupational health and safety officer upon request.

Failure to comply with this new requirement will mean that no new work permits will be granted until an Emirati is employed in the occupational health and safety role and the Ministry can also impose penalties under existing regulations.

The new requirement is likely to be strictly enforced as the Ministry has announced an intention to follow up with targeted facilities to ensure compliance with the new ruling.[1] In light of this and given the potential consequences for non-compliance, large construction and industrial sector companies should make sure that they are in a position to comply with this obligation from 1 January 2017.

Change 2 - Emiratis in data processing positions

According to Ministerial Resolution 710 of 2016, from 1 January 2017 companies employing 1000 or more employees will be must register on the Ministry's electronic system, Tasheel, in order to obtain work permits for their employees. The system can only be accessed by UAE national employees who will be responsible for such data entry and the resolution requires at least of two employees to be employed in such position. Furthermore, the Ministry will provide a list of UAE nationals available for such role, if required.

Employers caught by this resolution who fail to comply with the new obligation will not be able to obtain new work permits and may also face sanctions imposed by the Ministry. Such employers should therefore ensure they are in a position to comply with this new requirement by 1 January 2017.

Change 3 – Company classifications

The UAE has had a system of classification in place since 2010, designed to incentivise employers to adhere to existing Emiratisation requirements by virtue of Ministerial Order No. 1187 of 2010, as amended (the 2010 Order). This system sets out three categories that companies can fall under, with category one being the highest and category three the lowest.

Employers strictly observing Emiratisation requirements will fall under category one and there are certain benefits associated with compliance, including lower Ministry and immigration authority fees, being exempt from providing financial guarantees for employees and visas may be easier to obtain. In addition, if a company seeks to contract with a governmental or semi-governmental organisation, the company's compliance with the Emiratisation requirements may be relevant to the award of a contract.

The new Ministerial Decree No. 740 of 2016 amends the 2010 Order by introducing an additional provision whereby, with the Ministry's approval, companies may be upgraded within the bands of Category two (A, B and C) or to a higher category by fulfilling new reduced Emiratisation requirements and benefiting from reduced fees payable to the Ministry for certain professional employees.

From 1 January 2017, companies wishing to take advantage of this decree must fulfil the following conditions:

  • Companies registered with the Abu Dhabi, Dubai, Sharjah and Ajman labour offices must comply with the following:
UAE National employees must:
Conditions: Make up at least 10% of the workforce Make up at least 5% of the workforce Make up at least 3% of the workforce
Comprise a total of at least 25 employees of the total workforce Comprise a total of at least 10 employees of the total workforce Comprise a total of at least 5 employees of the total workforce
Have qualifications falling under professional levels 1-3 Have qualifications falling under professional levels 1-3 Have qualifications falling under professional levels 1-3
Company may be upgraded by up to: Three degrees above their normal classification Two degrees above their normal classification

One degree above their normal classification

  • Companies registered with the Ras Al Khaimah, Umm Al Quwain, Fujairah, Kalba City and Khorfakkan City labour offices must comply with the following

UAE NATIONAL EMPLOYEES MUST:

Conditions: Make up at least 5% of the workforce Make up at least 3% of the workforce Make up at least 2% of the workforce
Comprise a total of at least 10 employees of the total workforce Comprise a total of at least 3 employees of the total workforce Comprise a total of at least 2 employees of the total workforce
Have qualifications falling under professional levels 1-3 Have qualifications falling under professional levels 1-3 Have qualifications falling under professional levels 1-3
Company may be upgraded by up to: Three degrees above their normal classification Two degrees above their normal classification One degree above their normal classification

Companies in violation of the above conditions will be given three months to rectify their position, following which continued breach will result in the company not being granted any benefits pursuant to the decree (until the conditions of the decree are met once again).

As moving up classification levels results in the company being eligible for additional benefits, this may incentivise companies to seek to comply with the conditions set out in the decree.

Emiratisation moving forward

In January 2014, Sheikh Mohammed made several announcements confirming his vision for Emiratisation and tasked the Ministry to increase the rate of UAE nationals' employment in the private sector tenfold by 2021. The above noted regulation is designed to take positive steps towards fulfilling this mission.

Saqr bin Ghobash Saeed Ghobash, the Minister of Human Resources and Emiratisation also stated in interviews in January 2014 that legislative amendments to the UAE labour laws were being considered to enhance the attraction of the private sector to UAE nationals, including potential amendment regarding the working week, working hours and leave entitlements. No such amendments have been announced to date, however, it will be interesting to see if the recent changes lead to further regulation concerning Emiratisation.