UAE BARQ برق الإمارات – نبضك
Changes to labour law will make the UAE a better place to work and boost the economy, two of the UAE’s major English language dailies agreed.
The National and Gulf News dedicated their editorials today to the news scheme which abolishes the bank guarantee plan for workers.
“Within the next two weeks, the UAE Government is to start the process of refunding bank guarantees paid previously by companies and business owners for every worker and with a guarantee of AED 3,000 being posted for each worker since 2001, the refunds amount to a very significant rebate of AED14 billion,” said Gulf News.
This Dh14 billion rebate, it continued, comes at a time when businesses and companies have been working under difficult economic circumstances to increase their bottom lines and to make their entities grow and prosper. Indeed, the sheer amount of the rebate scheme, in addition to the fact that the AED 3,000 for each employee will be refunded directly to employers, provides a significant boost to economic activity. For larger employers, the refunds mark a significant one-time boost to their revenues, providing an opportunity for re-investment in their entities.
It means new trucks can be bought, new computers installed, software systems upgraded and the professional skills and training needs of employees can be funded. Indeed, for individuals who employ domestic helps, the refunds will be a one-off bonus, and it will be nice to see if indeed a small proportion of that is passed directly on to those helping hands who work hard to make life easier for so many.
The paper concluded by saying: “Overall, aside from the very real fiscal benefits, the employee insurance scheme is modern and reflects a more modern approach to the cost of hiring workers. Certainly, if employers want to continue with the old AED 3,000 bank guarantee scheme, they can still do so with the two schemes operating in tandem.”
The National predicted that changes to labour law will make the UAE a better place to work and boost the economy.
“Balancing the often competing needs of employers and employees is a high-wire act for any government hoping to create the right conditions to stimulate growth. Now, with the introduction of a subtle change to employment law, the UAE’s labour ministry has shown great adaptability by liberating companies from restrictive costs, while enhancing the welfare of workers.
Currently, companies must deposit AED 3,000 as a bank guarantee for every worker they take on, to ensure that employees will receive at least some compensation if their employer goes out of business. This is an essential social safety net, especially for blue-collar workers who are the most vulnerable when companies fail,” the paper noted.
Anything that lifts a financial burden from employers is a welcome boost for the economy. The return of the AED14 billion to the companies who contributed to the old system also represents a windfall to be reinvested in future growth. But it is the estimated half a million blue-collar workers in the UAE who will benefit most.
Instead of the AED 3,000 maximum payment under the old scheme, they now stand to receive up to AED 20,000 if things go wrong. This is a far more realistic sum that improves their long-term financial security and, in the process, better acknowledges their often unsung contribution to the nation’s economic success.
On October 15th the UAE will become a better place to do business, and a better place to work – two vital components of any successful economic formula, the paper said.
