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The labor bubble

The labor bubble

The UAE government may prohibit private companies from firing Emiratis arbitrarily.

February 15, 2009 1:31 by

Private companies may soon be prohibited from firing Emiratis unless they violate the labor law, reports Gulf News. The National Human Resource Development and Employment Authority (Tanmia), a government body aimed at safeguarding Emiratis’ jobs, has submitted a proposal to the Ministry of Labor demanding all private companies planning on firing Emiratis due to corporate restructuring, cost-cutting measures or due to mergers to inform the ministry of labor before taking action.

The proposal also states that private companies must exhaust all alternatives before deciding on terminating their contract with an Emirati employee, including relocating the employee to another department, suggesting part-time working hours and salary reductions and providing the employee with training.

Tanmia has also asked the General Pensions and Social Security Authority to protect Emiratis who have been made redundant by providing unemployment insurance.

The UAE, however, is not the only GCC nation trying to protect its citizens from the effects of financial crisis. Kipp reported in January that the Saudi Minister of Labor warned private companies not to fire Saudi nationals due to the credit crisis: “The Ministry of Labor is capable of stopping the retrenchment of Saudi workers if it becomes a phenomenon in violation of the labor regulations,” Ghazi Al-Gosaibi said.

The UAE government, however, readily admits that many of its citizens lack both proper training and the right attitude to succeed in the private sector: “…We have found that 25 percent of the [Emirati] workers lack basic reading and writing skills,” said Dr Khalid Al Khazraji, former undersecretary at the Ministry of Labor and former head of the Tanmia to XPRESS.

“Work attitude is another challenge that the UAE workforce faces while entering the labor market. Emiratis have to be accustomed to the expatriate work culture,” he added.

The global financial meltdown, however, has forced companies to take a Darwinian approach to handling their workforce. With tens of companies on the brink of collapse in the UAE, the government may be aiming to curb an already high rate of unemployment among Emiratis.

A survey by the Ministry of Economy showed that the unemployment rate among UAE citizens is 12.7 percent and 2.6 percent among expatriates (considering the visa requirements of expatriates living in the country, the discrepancy between the unemployment rates is understandable).

Fears that the Emirati unemployment rate may rise further due to the financial crisis may have prompted Tanmia to submit its proposal; indeed, if nationals are further excluded from the private sector, the nation may never meet the Ministry of Labor’s goal of doubling the Emirati workforce to 500,000 by 2020.

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  1. kelendria on February 16, 2009 9:29 am

    Any employee that will not benefit the bottom line should be let go. Using nationality to retain employment is not justifiable.

  2. rex on February 21, 2009 1:23 pm

    What do the authorities think what effect such an instant arbitrary measure of prohibiting companies to fire Emiratis has on the management of companies here ? Will it not be “dont hire Emiratis because we never get rid of them” ?
    This way such protectionism works counterproductive. Even companies who do not hire Emiratis will now think twice before hiring them.


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