UAE Labour Market: Nationalisation Requirements
The UAE’s workforce is considered one of the most diversified in the world due to a large population of residents coming from almost every corner of the globe. Foreigners significantly outnumber the country’s citizens, contributing to 88.5% of the total inhabitants, according to the reports by the National Bureau of Statistics. The majority of foreigners occupy positions within the private sector, while the government jobs are traditionally dominated by Emiratis. The government’s efforts to increase the participation of the local talent in the private sector are aimed at addressing this imbalance to ensure longer term sustainability and development of the labour market.
The UAE labour law provides for preferential treatment of Emiratis, and the expatriates should only be recruited where there is no national candidate available to fill the vacancy. But the reality is that every year thousands of foreigners are hired for positions which could potentially be offered to Emiratis. This practice is now under the microscope of the UAE’s labour authorities.
Beginnings of the Emiratisation
Nationalisation policies came into effect over a decade ago, implementing quotas for employment of national workers in medium- and large-sized companies within the trading sector, and for businesses operating in the insurance and banking sectors. The quotas—2%, 5% and 4% respectively—are incremental annually.
Then came the resolutions enforcing the employment of Emiratis for secretarial and HR positions, as well as the appointment of a UAE or GCC national for a Public Relations Officer’s role in companies with over 100 employees. In 2010, the Ministry of Labour introduced a company classification system, which also works as an incentive to adopting Emiratisation. The idea is that the higher the company’s category, lower the government fees; the company could even be exempt from paying bank guarantees.
In the beginning of 2016, the Ministry of Labour was transformed into the Ministry of Human Resources and Emiratisation (MOHRE), a step that was considered a sign of the upcoming change in focus and ensuing nationalisation of the UAE’s labour market.
The last quarter of 2016 saw the implementation of regulations, imposing the requirement to hire Emirati nationals for Occupational Health Officer and Safety Officer positions in the construction sector, and for Data Entry Clerk positions in companies with more than 1,000 employees.
The National Program for Emiratisation
But the biggest novelty so far is the introduction of the National Program for Emiratisation that, somewhat unexpectedly, came into force in the end of 2016. This program aims at employing Emiratis in the private sector, and also equips the MOHRE with tools to enforce job seekers' training and professional development. The two main pillars of the program are the labour market testing platform called ‘Tawteen Gate’, and the ‘Emiratisation Partners Club’ initiative.
Tawteen Gate is an electronic portal which allows Emirati job seekers to connect with private sector employers by accessing available job offers. Based on specific criteria, the MOHRE evaluates the candidates and prioritises those actively looking for employment. Applicants are expected to participate in various training programs offered by the Ministry, and must not decline more than three suitable vacancies. According to the MOHRE’s data, over 9,200 Emiratis were registered through the portal as of March 2017, predominantly women with university and high school diplomas.
Employers in the private sector, registered with MOHRE, may be required to advertise job openings through the Tawteen Gate platform if the position they recruit for is picked by the Ministry for nationalisation. The selection is done based on a special algorithm that scans the qualifications and experience of the candidates and matches them with the company’s profile and business activities. Companies will learn whether they are subject to this requirement when they create a job offer application on the Tas’heel system. Other than positions exclusively reserved for Emiratis, no separate list of job positions targeted for Emiratisation currently exists.
The recruitment process involves scheduling interviews and providing interview feedback, including reasons for rejection, if applicable. If the company cannot find a suitable candidate through the database, only then may the company extend a job offer to foreign national candidates.
In the initial phase of the implementation process, only selected companies were affected by the labour market testing process. It is now expected that this requirement will soon be expanded onto all other establishments registered with the MOHRE (i.e.: onshore companies).
Emiratisation Partners Club
The participation in the program triggers not only obligations but also involves some benefits, especially for the larger firms that are being offered a membership in the Emiratisation Partners Club. It is rather a virtual club, not a place for networking, selling or exchanging ideas. Companies are evaluated based on a point system which considers factors, including the employment structure, diversity of business activities, geographical expansion of the firm, training and development initiatives and work environment. Depending on the total number of points, the members are rated as Silver, Gold, and Platinum. The rating, in turn, triggers incentives, such as fast tracking for employment-related transactions, the appointment of a designated account manager and exemption from certain MOHRE classification decrees, among others.
Impact of Emiratisation
The impact of the Emiratisation policies is not expected to be significant for the businesses operating in the UAE when considering the size of the private sector and the country’s population. However, recruiters should definitely gear up for the extended processing time needed to hire a desired foreign candidate and ultimately, for certain positions, possible denial of job offers. In the long term, they should consider changing their recruitment policies. On the other hand, hiring Emiratis is quite straightforward, as the process does not involve submitting any immigration applications and consists of more simplified labour and pensions registration procedures only.
Last but not least, the Emiratisation policies and the labour market testing are currently not enforced in the many of the UAE’s free zones. Considered semi-government bodies, the free zones do not fall under the MOHRE’s direct administration and, although required to follow the federal laws, they are subject to processes, which are different from those applicable on-shore.
Learn more about Marcin Kubarek.