Visa bans and immigrations bans are one of the more confusing topics facing employers and workers in the UAE. Despite a push by the public authorities to codify practice, the application of a ban can still be arbitrary, and subject to the discretion of the officials involved in the process. This article aims to provide some clarity between the differences between the two main types of bans, how they are applied, the and how long they may apply.
The Labor Ban
Historically, an employer was able to prevent an employee from transferring to a new employer for a period of six months by blocking the visa application with the former Ministry of Labor (now the UAE Ministry of Emiratization and Human Resources, or MEHR). This system was substantially liberalized with UAE Cabinet Resolution No 25 of 2010 which removed bans after employment of two years.
In late 2015, the MEHR issued three decrees with the aim to further liberalize the employment ban and reduce the threat of a labor ban on persons with educational certificates (i.e. a legalized and attested high school diploma or greater submitted as part of the visa application process), or who have been employed for more than six months.
This new liberalized system came into effect on 1 January 2016. Although there are still instances where officials create special exemptions or place exceptional bans, and the labor ban has no real impact for hiring in the free zones, a general explanation of the labor ban is explained in Chart #1 and Chart #2 of this Client Alert.
The Immigration Ban
The steps liberalizing the labor ban have not affected the immigration ban. This is a separate ban that is administered by the Immigration and Naturalization Department, part of the Ministry of Interior. These bans apply across the UAE without exception, both inside and outside the free zones.
The differences between the Immigration Ban and the Labor Ban are explained on Chart #3 of this Client Alert.
Free zone-specific Bans
From time to time, some free zones have also applied bans on the transfer of empoyees within companies in the free zones registered within them without the approval of the previous employer. The existence of such bans are often not publicized and the policy is changing from time to time, and from free zone to free zone.
What Employers Need to Know
Multinational companies operating in the UAE typically confront labor bans when hiring new employees or when seeking to stop a resigning employee from joining a competitor.
When hiring, employers can conduct a check to determine whether a perspective employee faces a labor ban, and if so, how it can be lifted. In some instances, the ban cannot be lifted, and the prospective employee cannot be hired.
However, many professional workers can limit their exposure to the ban, as the ban is typically waived if an employee moves to a position with a higher salary (at least AED 5,000 for high school diploma, AED 7,000 for post-secondary diploma, and AED 12,000 for bachelor degrees).
Placing a ban on an employee that is leaving a company should be straightforward when the employee meets any of the elements set out in Chart #1 or Chart #2 below. However, placing a ban when there has been a breach of a non-compete or confidentiality obligation is complicated.
Given the discretion available to officials, companies should consult with professional advisors on a case-by-case basis.
Please click here to view charts.