Cabinet approves labour insurance system to replace bank guarantee for workers
As Abu Dhabi addresses ‘very real’ education needs of middle-income families, Anam Rizvi finds parents also want to see value for money
Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai, last night announced legislation had been approved by the Cabinet, which included doing away with bank guarantees for labour recruitment in the private sector.
The value of the insurance policy in the new system covers the workers’ end of service benefits, vacation allowance, overtime allowance, unpaid wages, return air ticket and cases of work injury, in which the insurance coverage amounts to Dh20,000 a person.
The scheme secures workers’ rights in the private sector and reduces the burdens on employers, allowing businesses to recover about Dh14 billion in guarantees, freeing up capital for other purposes such as reinvestment. The Cabinet approved the adoption of a “low-cost insurance” system as an alternative to the monetary guarantee provided by employers, which costs Dh3,000 a worker.
The insurance will now cost Dh60 a year for each worker, the state news agency Wam reported.
The labour insurance system is aimed at supporting businesses and helping to create a more competitive environment. Visas will can also be renewed without the need for leaving the country under the legislation.
Sheikh Mohammed said the change would support the UAE’s goal of remaining in the highest global rankings in the ease of doing business through an attractive economy based on flexibility, openness and in line with changing trends.
The reforms also include no fee, six-month temporary visas to help those who have lost their jobs to find new employment.
It approved 48-hour visas without charge for transit tourists and two-year visas for “talented and outstanding” students to stay after graduation.
The Cabinet also approved granting those who have stayed beyond the expiry of their visas to depart the country voluntarily and without incurring a ban.
A new model of affordable private schools for Abu Dhabi will encourage expatriate families to stay in the UAE and educate their children here, experts say.
The schools, which will involve a collaboration between the public and private sectors, will ask for annual fees between Dh20,000 and Dh30,000, considerably lower than those currently charged.
Natasha Ridge, executive director at the Al Qasimi Foundation for Policy Research, praised the move.
“This will help to increase access to quality schools for expatriates and Emiratis who want to attend,” Ms Ridge said. “It will encourage people to keep their families here and lead to fewer people sending their wives and families home.
“Most expatriates can’t enter the public school system, so the more competition the better.”
Ms Ridge said there was a real need for lower fees in private schools, particularly for middle-class expatriates.
“Our research on private education found that Asian expatriates could be paying up to 50 to 60 per cent of their take-home salaries on school fees, whereas western expatriates were only paying about 10 per cent towards school,” she said.
“There is a greater burden on lower-income earners in the UAE and their companies often do not provide any subsidies for school, whereas for western expatriates schooling is often part of the package.
“People in the lower income bracket are doubly disadvantaged by employment status and a lack of schools available at those levels.”
The plans have been agreed to under the orders of Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, and are based on a proposal by Dr Ali Al Nuaimi, head of the Department of Education and Knowledge.
The launch of the new school model is planned for the beginning of the coming academic year in September.
Judith Finnemore, managing consultant of Focal Point Management Consultancy, said the more expensive schools in the emirate will now have to rethink their policies.
“The new, cheaper schools will provide parents with more reasonably priced options provided they offer an education of exactly the same quality as the more expensive ones,” Ms Finnemore said.
“If this is the case, the latter may have to offer something truly different such as full-service, extended hours or a subject specialism. Or they may have to lower their fees to fill their places.”
The initiative has also been welcomed by parents. R D is an Argentinian mother who pays Dh50,000 a year in tuition for her child in FS1.
“I pay a substantial amount
There is a greater burden on lower-income earners and companies often do not provide subsidies for school NATASHA RIDGE Al Qasimi Foundation
of income on my children’s education because there are no alternatives for expatriates,” she said. “The new schools will provide an affordable option if the schools are academically competitive.”
Naeema Iqtiran, a Pakistani mother in Abu Dhabi, had to withdraw her child from a school as the fees were proving too expensive.
She transferred him to a school where the fees were more reasonable.
“To be honest, the level of education there was not as we expected,” Ms Iqtiran said. “Teachers were not trained properly and the reason might have been that it is a new school and they need more time.”
Her seven-year-old was recently admitted to a third school.
In Abu Dhabi, 93 schools have requested that the education department approve an increase in fees this year, although all of these requests are being reviewed by officials at present.