Emiratisation in the UAE
Companies operating in the UAE need to be mindful of what the current legal framework is and the consequences for non-compliance.
As part of the UAE government’s general strategy to drive forward Emiratisation policies in the private sector and develop a more knowledge-based economy pioneered by UAE nationals, companies operating in the UAE need to be mindful of what the current legal framework is and the consequences for non-compliance.
Initiatives targeted at increasing the number of UAE nationals in the UAE workforce has been a key focus of the UAE’s Vision 2021. As recent as October 2019, Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Ruler of the Emirate of Dubai, pledged at a Cabinet meeting an array of proposals focused on expanding and fortifying the theme of Emiratisation, including:
- the creation of 20,000 new jobs for UAE nationals over the next three years in the banking, aviation, communication, insurance and property sectors;
- the approval of a AED 300 million fund to train 18,000 UAE national job-seekers in new skills;
- “Managerial” positions in the Government sector to be reserved for UAE nationals. Equally, UAE nationals will have priority for 160 designated job titles in the private sector (these titles have yet to be released);
- stating companies that fail to meet Emiratisation rates to date be required to financially contribute to support the Emiratisation programme; and
- 8,000 UAE national graduates to undertake a six to 12 month placement in public or private sector on a Dh10,000 monthly wage – 40% of which will be paid for by the Government.
These initiatives serve to underscore the continued investment placed on Emiratisation in the UAE and ensuring adequate representation of UAE nationals across the public and private spectrum.
However, the proposals above should not be read in isolation. Historically, there have been a number of rules that have been introduced over the years by the Ministry of Human Resources and Emiratisation (the “MOHRE”) as well as other sector-specific authorities (notably within the banking and insurance sectors). A snapshot of the rules and regulations already in place include:
- measures to encourage voluntary Emiratisation by classifying employers registered with the MOHRE according to a specific criteria (including compliance with the UAE Labour Law, wages protection system, cross-cultural diversity initiatives, Emiratisation policies, etc.) with employers being categorised and ranked into bands, with those in the lower band attracting higher administrative fees and restrictions on the ability to recruit foreign nationals, as compared to those in the higher band;
- job-specific roles being reserved for UAE nationals, including the functions of PRO, HR officer, Health and Safety officer and data entry clerks, depending upon the size and industry of the employer concerned. These reserved roles are, of course, separate from the 160 designated roles referred to above; and
- Enrollment into the “Tawteen” scheme in order to facilitate and promote Emiratisation and provide those enrolled companies with privileges and benefits if specific Emiratisation targets are met.
Relevantly, the insurance, banking and trade sectors (subject in certain cases to employers in such sectors meeting a specific employee number threshold) have been subject to specific and mandatory quotas with respect to the recruitment of UAE nationals which has evolved over time and been stringently enforced by the applicable authorities.
But whilst the above initiatives and regulations are focused on increasing the flow of UAE nationals into the private sector and/or carving out specific roles for UAE nationals in the public sector, the Government already has in place a robust framework that regulates the employment relationship – making clear the Emiratisation initiatives are very much holistically curated initiatives. For instance, in 2018, the MOHRE introduced a mandatory regime that permits UAE nationals to request to work remotely. In the same year, it also introduced measures regulating the manner and circumstances under which UAE nationals can legitimately be terminated in the private sector, including the penalties for non-compliance.
In closing, Emiratisation remains a hot topic in the UAE and companies are well-advised to ensure that they remain aware of the increasing changing legal landscape so as to avoid incurring penalties for breach. But from a general perspective, these Emiratisation rules and regulations provide a useful tool for companies to diversify – or further diversify – their overall workplace population and facilitate an environment of diverse thinkers and agents for constructive change.