Legal lowdown

22 October 2015
Author: Sarah Lawrence

Legal update: Sarah Lawrence, senior legal consultant at DLA Piper in Dubai, gives an overview of legislation and case law HR professionals should be aware of

Sarah Lawrence, senior legal consultant for DLA Piper in the Middle East, gives an overview of the legal developments HR professionals should be aware of in the region

New Saudi labour laws
 
It’s only been a decade since the last labour law was enacted in the Kingdom of Saudi Arabia (KSA), but a new set of laws – which came into force on 18 October – will affect almost every employer in the country.
 
Aimed at improving the labour market in KSA and reducing unemployment among Saudi nationals, one of the key amendments for HR professionals is the requirement for all employers to develop formal “internal regulations” (ie policies and procedures) and have in place a Ministry of Labour template contract for each employee.
 
Redundancy is now officially recognised in KSA provided a business is either closing down entirely, or is terminating a particular activity. However, it may still be difficult for employers to justify individual or small-scale redundancies (ie selection from a ‘pool’).
 
Other important considerations include an increased focus on the training of Saudi nationals (companies with more than 50 staff must train at least 12% of their KSA national employees), potential rewards for whistleblowers, extensions of maternity, marriage and paternity leave, capped compensation for illegitimate terminations and the requirement to provide all employees with an employment certificate on termination. Further changes are also expected to be made to the constantly evolving Nitaqat system: the percentage of local nationals who must be employed before new visas can be issued for foreigners.
 
New UAE labour laws
 
The UAE intends to enforce new labour laws at the start of 2016 to better regulate the relationship between employers and workers. The provisions require employers to issue clearer and more detailed contracts (particularly for expatriates), and will enable employees to obtain new work permits and remain in the region where they have at least six months’ service. It is understood that the contracts will be based on a Ministry of Labour template, which companies will not be able to amend.
 
The contract requirement poses a dilemma for employers as to whether a company’s own standard employment contract can be relied on going forward, since “no new clauses may be added to the standard contract unless they are consistent and compliant with the ministry’s legal requirements”.
 
Tackling discrimination in the UAE
 
The recent Federal Law preventing discrimination and hatred in the UAE will have significant ramifications for businesses. While the law is, in essence, an attempt to combat religious contempt and intolerance and clamp down on extremism, it creates a general standalone criminal offence of discrimination covering “any distinction, limitation, exception or preference among individuals or communities on the basis of religion, Islamic Madhhab, belief, sect, creed, race, colour or ethnic origin”.
 
Managers must be made aware of the law and its implications, not least because “managers, representatives or agents of a company” could be jointly liable if employees (to their knowledge) commit an offence in the name and on behalf of an organisation. This could particularly affect social media, where comments can easily be attributed to a company. HR professionals are advised to ensure policies are up to date and that employees are made aware of the potentially criminal consequences of their actions.
 
New payroll rules in Qatar
 
Qatar has introduced wage protection rules similar to those in use ‘onshore’ in the UAE, under which employees must be paid via a specific, designated Qatari bank account. There are provisions around prompt payment of wages, with serious sanctions in place for failure to comply.
 
Employers are advised to audit their payroll arrangements and pay particular attention to any staff members who are paid in part or in full via foreign accounts, to ensure that the arrangements are legally compliant.