A new resolution has been passed regarding bank guarantees and employees’ protection insurance scheme for the private sector, by the UAE Ministry of Human Resources and Emiratisation.
The resolution, which was announced on Tuesday, require establishments to provide each worker a bank guarantee of no less than AED3,000, with a validity of one year.
Guarantees will be automatically renewed, WAM said in a statement.
A second option entails a 30-month insurance policy, at a value of AED137.50 for each skilled worker, AED180 for each low-skilled worker and AED250 for each worker paid by high-risk establishments that are not registered with the Wages Protection System (WPS), the statement said.
The insurance coverage worth AED20,000, will cover the worker’s last 120 working days, the end-of-service gratuity, the expenses of returning the worker to their home country, and in the event of the worker’s death, the costs of repatriating the body to his home country.
The insurance will also cover other rights and entitlements that the employer is unable to fulfil, based on a decision by the ministry or the concerned labour court.
“Offering establishments the option of choosing between providing a bank guarantee or an insurance policy allows them to choose what is most suitable for them and helps reduce operational costs, enabling employers to fulfil their legal obligations towards their workers,” Aisha Belharfia, assistant undersecretary for labour affairs at the Ministry of Human Resources and Emiratisation (MOHRE), said.
However, the employer may submit a ‘request to reclaim’ the guarantee depending on four cases.
The first case is based on, the cancellation of the employee’s work permit and providing proof of their departure from the country.
The second case is based on, the employee’s death and providing proof of the body’s repatriation or burial in the UAE.
The third case is based on, if the employer transfers to a new employer.
The fourth case is based on, the employer provides proof of cancellation of the employee’s work permit and payment of entitlements due to the employee.
MOHRE can also reject the request to reclaim of the bank guarantee under two scenarios – if the employer is a party to a collective labour dispute until the employee’s entitlements are settled; or if evidence of due fines against the establishment is proven, or if the establishment’s work permits have been suspended, WAM reported.
The new resolution is part of the UAE government’s efforts to preserve workers’ rights, support the business community, enhance the competitiveness and stability of the UAE’s work environment, and strengthen its reputation as a preferred and safe destination to live, work, and invest.
Follow us on
