In­sur­ance scheme is a win­ner for ev­ery­one

The re­forms an­nounced this week are good for em­ploy­ees and em­ploy­ers alike

The National - News - - OPINION -

In one de­ci­sive move on Wed­nes­day night, the UAE Cabi­net sent two pow­er­ful mes­sages, mark­ing a sea-change in what is ex­pected of both work­ers and em­ploy­ers in the coun­try’s pri­vate sec­tor. Sheikh Mo­hammed bin Rashid, Vice Pres­i­dent and Ruler of Dubai, an­nounced the ap­proval of new leg­is­la­tion that re­placed the re­quire­ment for em­ploy­ers to pro­vide a Dh3,000 bank guar­an­tee for each worker they hire with a labour in­sur­ance sys­tem based on wel­fare. Firstly, it means that Dh14 bil­lion will be re­leased back to em­ploy­ers, pro­vid­ing a stim­u­lus for the econ­omy. It is ex­pected that this cap­i­tal will now be used by busi­nesses to in­vest in fu­ture growth. The move also low­ers the cost of do­ing busi­ness, mak­ing the UAE more com­pet­i­tive. The de­ci­sion high­lights the im­por­tance of ef­fi­ciency and re­flects the Gov­ern­ment’s be­lief that busi­ness own­ers should no longer be bur­dened with un­nec­es­sary or out­dated pro­cesses when a bet­ter op­tion can be made avail­able.

In this case it is a sim­ple yet ef­fec­tive sys­tem that also pro­vides peace of mind to roughly 466,000 labour­ers – those most af­fected by this move – who are far from home in pur­suit of greater pros­per­ity. The new sys­tem pro­vides up to Dh20,000 of cover for their end of ser­vice ben­e­fits, va­ca­tion and over­time al­lowances, un­paid wages, re­turn air tick­ets and work in­juries. It means that what­ever hap­pens dur­ing the course of their em­ploy­ment in the Emi­rates, their own needs will be met and backed up by the full weight of the law. This is the key point: bring­ing that weight to bear, in reality, and on the ground.

In the past, that has not al­ways been the case, even with the Gov­ern­ment not shy­ing away from tack­ling is­sues con­cern­ing wages, med­i­cal ex­penses and work­ers stranded in the coun­try after their em­ploy­ers ab­sented them­selves of all re­spon­si­bil­i­ties to­wards them. How­ever, it has not al­ways been easy to mon­i­tor abuses in a fast-grow­ing econ­omy and na­tion. The new in­sur­ance sys­tem is an el­e­gant so­lu­tion to the en­force­ment is­sue. It will be in­ex­pen­sive for em­ploy­ers to adopt, with each pol­icy cost­ing Dh60 per worker, per year. Com­pared to a Dh3,000 bank guar­an­tee, that’s not much at all to pay to en­sure that some­one’s dreams of a bet­ter life do not take a turn for the worse. The Gov­ern­ment has been re­form­ing the labour mar­ket for many years now, in­clud­ing the Wages Pro­tec­tion Scheme, which over­sees and reg­u­lates the pay­ment of salaries to all em­ploy­ees.

Whether it’s boom or down­turn, such changes en­sure that both work­ers’ and em­ploy­ers’ rights are con­sid­ered within the UAE’s rapid growth tra­jec­tory, un­der­pinned by the vi­sion to es­tab­lish the UAE among the world’s most suc­cess­ful coun­tries. Sheikh Mo­hammed him­self said on Wed­nes­day that “a strong econ­omy drives us as a na­tion to be among the first and best”. He high­lighted that re­main­ing ag­ile and flex­i­ble to­wards the needs of all pri­vate sec­tor stake­hold­ers, who will drive fu­ture growth in the UAE, is an­other sign of how this goal is be­ing met.

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