The photo has been used for illustrative purpose.
Dr Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, (MoHRE) has emphasised that his ministry will continue to support the country’s efforts in achieving global leadership in business and key national objectives, with a primary focus on promoting Emiratisation programmes and empowering national talent.
The minister highlighted that the new classification of companies, which will come into effect on June 1, 2022, and its relevant resolutions meet business owners’ demands and protect workers’ rights while encouraging innovation and promoting the SME sector. In addition, the classification offers rewarding incentives to companies that commit to the prescribed laws and policies on promoting cultural and demographic diversity, in line with society’s values, based on tolerance and equal opportunities for all.
Dr Al Awar provided details about the new classification system, which falls under Cabinet Resolution No.18 of 2022, and relevant ministerial resolutions at a media briefing today at the MoHRE headquarters in Dubai.
He explained that the general policy for developing the labour market is inspired by the ‘Principles of the 50,’ which targets “building the world’s best and most dynamic economy.”
In this context, Dr Al Awar underlined MoHRE’s comprehensive outlook on the business sector, based on four pillars: supporting and empowering national talent and competencies, maintaining the labour market’s attractiveness for global talents and highly qualified people, protecting workers and employees, and providing maximum guarantees for their rights, and enabling and promoting companies’ capabilities to achieve sustainable growth.
Dr Al Awar explained that the new classification of companies splits existing companies into three distinct categories. The classification criteria meet the clients’ demands for simplifying transactions, with top-level governance supported by smart solutions provided by MoHRE’s digital ecosystem. The companies will be categorised using an interactive automated system that facilitates changing a company’s classification transparently, based on the procedures carried out by each company or the transactions undertaken.
The minister noted that the classification provides incentives and exemptions for companies under the national economic priorities and Emiratisation programmes while boosting the priority sectors. It also considers the value system on which any prosperous global economy must be based, namely equality and justice in employment opportunities, alongside promoting tolerance and inclusiveness, without inhibiting employers’ freedom to choose the talents and competencies they wish to recruit. Finally, the classification sets new fees for services in a manner that is practically tied to the choices employers will make.
Dr Al Awar stated that the classification of new companies “depends on the extent of their commitment to the law and wage protection system, workers’ rights protection, and their compliance with the policy of promoting cultural and demographic diversity, along with the resolutions that regulate the labour market”. Most existing companies in the country that fulfil all these commitments will be in the second category.
Companies may also be classified in Tier 3 if they commit other violations stipulated in Ministerial Resolution No. 209 of 2022, including the issuance of a final ruling that the facility committed a crime of human trafficking; used or recruited workers without obtaining work permits; provided incorrect data, documents or information to the ministry; violated obligations on workers’ wages, housing and safety standards; resorted to fake Emiratisation practices; or committed other serious violations.
The classification will be accompanied by updates on service fees for work permits and transfer fees in line with the classifications of companies. Fees will not exceed Dhs250 for Tier 1 companies for two years, while Tier 2 companies will be charged Dhs1,200 for two years. Tier 3 companies will not be able to benefit from any fee rebates, and the fees for issuing or renewing work permits will amount to Dhs3,450 for two years. Activities involving the employment of UAE and Gulf Cooperation Council citizens are exempt from these fees.
Dr Al Awar explained that the new classification achieves a number of vital goals that serve the national economy in conjunction with all other pillars of the legislative system. The new categories will enhance economic diversity and support the development of employment mechanisms to create fair and equal opportunities in the private sector to enhance the values of tolerance and cultural and demographic diversity.
This step is in response to the country’s vision for the next 50 years, and it enhances its position as a global hub for talent, companies and investments. It also supports the goal of developing a knowledge economy based on experience exchange, capacity building, and launching new sectors that align with the future economy and help boost socio-economic development.
Through the decision, MohRE seeks to enhance integration with the local and federal government entities to support policies that boost the labour market’s efficiency and stability. This is the key factor on which company classification criteria and their promotion or demotion have been based.
The decision to raise annual Emiratisation levels in private sector companies is accompanied by unprecedented advantages, including reducing the fees of MoHRE by up to 80 per cent for private sector companies for achievements in hiring and training citizens in partnership with the Nafis programme. In addition, the unemployment insurance system provided through insurance packages will offer a unique model for protection umbrellas through insurance companies’ products that ensure the availability of income for workers during their unemployment until alternative job opportunities are available.