The Importance of Compliance with Emiratization Systems in the Private Sector

Emirati citizen is the basic unit for building and developing society in the United Arab Emirates; therefore, the state is always keen to raise the status of the citizen by paying attention to all fields that work to develop Emirati cadres, so we find that the UAE is always seeking to pay attention to the field of education in all its stages, including university education. Moreover, the UAE did not ignore training fields that qualify citizens for practical life and make them benefit from national cadres, whether through government work or private sector jobs, so we find constant care to the issuance of legislations that regulate employment processes, which aims to clarify the obligations and rights of both the Emirati citizen and the employer, by working to implement what the UAE Human Resources Competitiveness Council is doing through the “Nafis/ compete” program, which implements national initiatives that aim to support citizens in the private sector and raise their competitiveness globally. The program also aims to employ seventy-five thousand Emirati citizens in the private sector during the next five years, and this is achieved in accordance with adherence to Emiratization systems in the private sector and the decisions issued in this regard. From this point of view, dear reader, the focus of our article will be on the decision of the Ministry of Human Resources and Emiratization no. 663 of 2022, in order to clarify all the important points regarding the importance of the private sector compliance with the Emiratization systems in the UAE.

Ministry of Human Resources and Emiratization issued a resolution regarding compliance with the Emiratization systems

On 18 December 2022, the Ministry of Human Resources and Emiratization issued Ministerial resolution no. 663 of 2022 regarding compliance with Emiratization systems in the private sector, which defines commitment controls with Emiratization systems, job advertisements, employer obligations upon hiring a citizen, and enabling the citizen to perform its work and obligations by providing a place and the appropriate tools, in addition to the relevant fines and penalties. ?

- Defining controls, obligations, fines and penalties

- Prohibiting Establishments from referring to government policies or their benefits in Emiratization jobs advertisements.

- Preventing any misleading advertisements that do not represent available and real job opportunities or in non-skilled professional levels.

- Expanding in the Emiratization process requires controlling all aspects of such important national file, defining the duties and obligations of all parties, and enacting the necessary laws to control the recently observed abuses, which the ministry is working on by monitoring what is happening on the scene, identifying the necessary remedies and ensuring that all parties compliance with them. "

The Ministerial Resolution prohibits establishments when announcing Emiratization jobs by any means, to refer to government Emiratization policies or their benefits without prior permission from the Ministry. The same also prohibits any misleading advertisements that do not represent available and real job opportunities or in unskilled professional levels, or include support benefits and Government incentives related to citizens in the private sector with such advertisements.

The resolution required the employer to enable the citizen to perform his/ her work by providing the workplace and the necessary tools, while providing the minimum training and qualification tools. It also prohibited reducing the citizen's wages under the pretext of benefiting from government support programs, and the resolution considered granting the citizen a lower wage than his/ her counterparts as a circumvention of the legislation regulating for Emiratization.

The resolution also obligated the employer, upon hiring a citizen, to obtain a work permit for him/ her from the Ministry, conclude a contract and pay wages according to the regulations, to register the citizen and pay monthly contributions to the pension and social security/ insurance system in accordance with the legislation regulating that within a month from the date of issuance of the work permit, and to cancel the citizen’s work permit immediately after the end of the contractual relationship, and report any change to the employment contract that affects the conditions of benefiting from the benefits of the "Nafis/ compete" program.

On the other hand, the resolution specified the citizen's obligations when joining a private sector establishment, which is represented in the necessity of his/ her commitment to the relevant decrees, laws, resolutions related to the "Nafis/ compete" program, and all the obligations contained in the employment contract signed by the him/ her. The citizen also undertakes to inform the Ministry regarding any violating practice.

Definition

The Ministerial Resolution also specified the false Emiratization as employing a citizen falsely by having a work permit issued to him/ her and registering the citizen in the establishment for a purpose other than the one intended for its issuance and concluding an employment contract which basic elements lack proof of the real contractual relationship in order to circumvent the laws and ministerial resolutions that regulate the work of the citizen in the private sector, or to benefit illegally from Government support systems and incentives related to employment or training.

The Resolution also defines the violating establishment as the one that has proven not complying with one of the controls contained in the resolution and any decisions related to false Emiratization or circumvention to achieve a benefit from government support and incentives related to the employment of national cadres. Furthermore, the said resolution defines also the "violating beneficiary" as the citizen who was proven not complying with the controls of Emiratization decisions/ resolutions to attain a benefit by circumventing the real contractual relationship.

What is false Emiratization in the UAE?

The first article of the compliance decision to the Emiratization systems in the private sector stated that false Emiratization is the employment of a citizen falsely by having a work permit issued to him/ her?and registering the citizen to the establishment for a purpose other than the one designated for its issuance, and concluding an employment contract whose formal elements are available, but the same lacks to its basic elements in proving the real contractual relationship (wages, work, dependency) between the parties, in order to circumvent the laws and ministerial resolutions that regulate the work of citizens in the private sector, or for the purpose of benefiting illegally from government support systems and incentives related to employment or training, or with the intention of achieving the required target of the establishment in accordance with the regulating decisions/ resolutions issued by the Ministry.

The same article also made it clear that whoever does so according to the law is called the violating beneficiary or the citizen who has proven not complying with one of the controls contained in such resolution and any related decisions to achieve a benefit from government support and incentives related to the employment or training of national cadres in circumvention of the real contractual relationship (wages, work, dependency) between the parties.

As for the establishment that performs such acts, it is called, according to the same article, the violating establishment, and it is defined as the establishment that has proven not complying with one of the controls contained in such resolution and any related decisions regarding false Emiratization or circumvention to achieve publicity or benefit from government support and incentives related to employment or training national cadres.

What are the prohibitions and controls of posting / advertising Emiratization jobs in the UAE?

Article 2 of the compliance resolution to the Emiratization systems in the private sector established the prohibitions and controls that fall on the shoulders of establishments upon posting/ advertising Emiratization jobs. Such controls included all establishments, including the Nafis/ compete platform, and clarified these controls as follows:

1- Referring to government Emiratization policies or their benefits upon posting/ advertising jobs without obtaining prior permission from the Ministry.

2- Displaying any advertisements about misleading jobs that do not represent an available and real job opportunity or in unskilled professional levels.

3- Including ?government support and incentives benefits related to citizens in the private sector in job advertisements.

What are the employer's obligations according to Emiratization systems in the UAE?

In accordance with what was stipulated in Article 3 of the compliance resolution to the Emiratization systems in the private sector, the employer shall, upon hiring a citizen, enable him/ her to perform their work by providing the citizen with workplace and the tools necessary to complete the work, while providing the minimum training, qualification and empowerment tools in accordance with the UAE Labor Law .

As for compliance with the Emiratization systems, Article 4 of the same resolution stipulates that it is prohibited for the employer to reduce the citizen’s wages as a result of the citizen’s benefit from government support programs. The same article also clarified that it is considered a circumvention of the legislation regulating Emiratization the act of granting the citizen a lower wage than his/ her counterparts who perform the same job tasks or work in the same professions within the establishment.

Article 5 of the resolution obligates the employer, upon hiring a citizen, to do the following:

1- Obtaining a work permit for a citizen from the Ministry.

2- Concluding an employment contract in accordance with the regulations in force in the Ministry.

3- Registering the citizen and paying the monthly contributions to the pension and social security/ insurance system in accordance with the legislation regulating that within a month from the date of issuance of the work permit.

4- Paying the agreed wage according to the wage protection systems approved by the Ministry.

5- Reporting any change to the employment contract that affects the conditions of benefiting from the benefits of the "Nafis/ compete" program.

6- Termination/ cancellation of the citizen's work permit immediately after the end of the contractual relationship.

What are the citizen's obligations according to Emiratization systems in the UAE?

When joining a private sector establishment, a citizen shall abide by the obligations stipulated in the UAE Labor Law, the decisions issued for its execution and the decisions related to the "Nafis/ compete" program, as well as all the obligations contained in the employment contract signed by him/ her. The citizen also undertakes to inform the Ministry of any practice that violates the provisions of such resolution and the aforementioned decisions, in accordance with the provisions of Article 6 of the compliance resolution to Emiratization systems in the private sector inside the UAE.

What are the fines and penalties relating to Emiratization systems in the UAE?

In accordance with what was indicated in Article 7 of the compliance decision of the Emiratization systems in the private sector in the UAE, all necessary procedures and measures are taken, administrative fines are imposed, and any sanctions and other penalties prescribed in accordance with the Law Regulating Labor Relations and the decisions of the Council of Ministers, and any other legislation in force in the state against the violating establishment and the beneficiary violating any of the provisions of such decision.

What are the mechanisms for collecting the prescribed contribution imposed on ?the non-compliant establishments to the Emiratization rates established in the UAE??

Article 3 of Ministry of Human Resources and Emiratization Decision no. 279 of 2022 regarding the mechanisms for following up Emiratization rates in the private sector and contributions imposed on non-compliant establishments made it clear that such mechanisms are carried out according to the following:

1. Non-compliant establishments with the stipulated Emiratisation shall pay Dh6,000 monthly starting January 2023, for every citizen who has not been employed in accordance with Cabinet Resolution No.(19/ 5m) of 2022 referred to. The amount of the monthly contribution shall increase progressively by Dh 1,000 each year.?

2. The establishment shall be considered non-compliant if the required number of employed citizens is not maintained until the following year. The establishment shall be under obligation to pay the assessed contribution unless the Emiratisation percentage and the required numbers of employed citizens are re-achieved within two months from the date of its decline.

?3. The contribution shall be due at the beginning of the following year for the number of citizens required to be employed to achieve the required Emiratisation rates in accordance with the above-mentioned criteria. The total amount of the contribution for the year in which the required Emiratisation percentage was not achieved shall be paid annually and in one payment.

4. If the establishment fails to pay the assessed contribution referred to in this Article, the following actions shall be taken:

-??????The establishment shall be placed under electronic-follow-up to ensure its compliance with the payment of assessed contributions on the due date.

-??????The issuance and renewal of work permits for the establishment shall be suspended with the establishment owner being notified of the reason for the suspension, and such action shall be done on the day following the due date.

-??????On the third day, the tenth day, and the seventeenth day after the due date, notices and alerts shall be sent to the non-compliant establishment in order to employ citizens and pay the prescribed contribution.

-???????The non-compliant establishment of paying the contributions shall be included in the electronic monitoring and inspection system, one month after the due date.

-??????While continuing to stop granting and renewing the new work permits service for the violating establishment. The issuance and renewal of new work permits for all individual enterprises / establishments or exclusively owned companies shall be stopped, as of two months after the due date.

-???????The establishment shall be reclassified within the third category according to the classification approved by the Ministry, in the event that the establishments fails to comply to the set Emiratization rates for two consecutive years.

-??????In the event that any manipulation is proven on the part of the establishment or submission of incorrect data, the fines stipulated in Cabinet Resolution No. 21 of 2020 AD regarding service fees and administrative fines applied at the Ministry of Human Resources and Emiratization.

How can a grievance procedure be done against the Ministry of Human Resources and Emiratization decisions?

Article 4 of Ministry of Human Resources and Emiratization Resolution no. 279 of 2022 permitted the establishment to file a grievance against any decision issued in its regard in implementation of such resolution before Grievance Committee in the Ministry in accordance with Ministerial Resolution no. 45 of 2022, where the grievance shall be submitted within thirty days from the date of knowledge ?of the decision issued by the Ministry, provided that the application shall be justified and attached thereto all the supporting documents thereof.