Legal update

21 January 2016

Author: Sara Khoja


Legal update

Sara Khoja, partner at Clyde & Co in Dubai, gives an overview of legislation and case law HR professionals should be aware of

Saudi Arabia introduces employment regulations
 
The Saudi authorities have issued a range of new penalties relating to breaches of employment law, designed to strengthen the country’s recent reforms in this area.
 
A total of 61 fines cover transgressions such as failing to issue contracts, not maintaining personnel records, retaining employees’ passports and employing male staff in roles reserved for women, such as working in lingerie stores.
 
The new regulations are backed by further amendments to the ‘Ajeer’ system, which covers the documentation of temporary foreign employees. Most significantly, issues that sometimes prevented expat employees from working at clients’ sites in Saudi Arabia have been cleared up under a new ‘B2B’ scheme, which grants them temporary work notices and extends secondment notices to expats working on secondment, though only in the pharmaceutical and construction sectors.
 
The Ajeer system is expected to be extended to cover other sectors and circumstances in the coming years.
 
Qatar’s new immigration law to clarify expat rules
 
A new immigration law set to be implemented in Qatar by the end of 2016 may significantly change the balance of power between businesses and their expat employees, a current flashpoint affecting many companies.
 
The law will add clarity to the system of entry and exit visas: notably, it makes it clear that retaining an employee’s passport is not allowed without their prior consent, and even then must be released on appeal.
 
Employees will still require an exit permit to leave the country, but have gained a right of appeal if they believe they have been wrongly treated.
 
Employers now have 90 days to issue a residence permit after a new staff member enters the country, and they no longer have to issue letters of obligation to transfer residency.
 
Employee rights get a boost in UAE
 
The three new ministerial decrees that promised to shake up employee rights in the UAE have now taken effect, and HR departments and employment lawyers have begun to assess their likely impact.
 
The decrees are broadly seen as increasing labour mobility and clamping down on the use of restrictive clauses and contracts. Their effects start at the onset of employment, where new staff must be issued with a standard contract that contains more detailed information on their rights, and the terms and conditions of their employment.
 
The use of ‘labour bans’, which prevent employees switching companies, has also been outlawed among unskilled employees who have worked for a business for at least six months, as long as they have met all contractual and legal obligations.
 
This is likely to encourage a major uplift in labour mobility, and is backed by changes affecting limited-term contracts, which can now be terminated by either party by invoking a notice period of up to three months. The maximum duration of such contracts has been reduced to two years, and the changes to their enforcement apply retrospectively. The three-month limit for notice periods will also apply to unlimited-term contracts.
 
This will prove challenging for those employers that have retained large numbers of staff on unbreakable fixed-term contracts. It is likely to be hard for them to find ways around the new regulations, and the labour courts are taking an increasingly dim view of restrictive contracts in general.
 
Middle East to focus on health and safety
 
Health and safety is receiving a new focus across the region, particularly in Saudi Arabia, where the tragic Hajj stampede and crane collapse in 2015 have brought the issue to the fore.
 
The Ministry of Labour says it carried out 142,600 inspections in a year and recorded more than 35,000 notices. It has reminded employers of their responsibilities to staff, including the requirement for supervisors with medical training to oversee activities, and has introduced amendments to ensure that salary and compensation are paid to the victims of workplace accidents.