UAE Mulls New Labour Law For Private Sector

The United Arab Emirates is considering changes to its labour law to attract more citizens into the private sector, local media reported on Saturday, to lessen the burden of a bloated public sector in case of a fall in oil prices.

Many Emiratis prefer to work in the public sector, where working hours are shorter, holidays longer and pay tends to be higher, while foreign workers, who account for the majority of the oil-rich Gulf state’s population, fill most private sector positions.

To prepare for any future downturn in oil prices and to avert political discontent, leaders in the UAE and other Gulf states are taking steps to rebalance their employment structures.

Labour Minister Saqr Ghobash will present the government with a review of the current labour law “shortly”, the local al-Khaleej newspaper reported on Saturday, citing unnamed sources.

The review would include proposals to bring private and public sector salaries into line, as well as increasing private sector holidays, it said.

“The aim is to reach a compromise that will do justice to Emirati employees and at the same time will satisfy businessmen and company owners, so that Emiratisation be a real addition, rather than seen as a burden or that it becomes too costly,” al-Khaleej reported.

Just over 11 per cent of the UAE’s estimated 8.3 million people are citizens, and most of the rest are foreign workers.

The jobless rate among Emiratis is put officially at 14 per cent. UAE citizens are conferred generous benefits, receiving free government education, health care and assistance in housing.

At a forum earlier this week, the UAE’s prime minister, Sheikh Mohammed bin Rashid al-Maktoum, told hundreds of officials that finding jobs for its citizens was one of the government’s top priorities.

His deputy Sheikh Mansour bin Zayed al-Nahayan said the Ministry of Labour had been tasked with adjusting working hours and days of the private sector to make them more appealing to Emiratis.

While the government can afford to pay high public sector salaries and unemployment benefits and to bear the cost of hiring foreigners while oil prices are high, it knows its finances could be strained in the long term if oil prices fall.