Out-Law Analysis | 19 Jun 2015 | 2:15 pm | 3 min. read
This year's protests were by employees of Arabian Construction Company (ACC), who said that their overtime pay had been stopped. The 2013 action related to claims of unfair pay and benefits.
Construction is vital to the UAE economy and its workers underpin the sector. However the UAE employment regime which governs them is not always as developed as it could be given the importance of the construction sector to the economy.
What does the law say?
The employment relationship between construction workers and their employers is governed by the UAE Labour Law, No 8 of 1980. Strikes in the UAE are less common than in other jurisdictions because strikers and unions do not receive legal protection. In fact, the UAE Labour Law expressly prohibits strike action and strike or union action can potentially amount to criminal behaviour under the UAE and Dubai Penal Codes.
In practice the penalty for employees who lead or take part in strikes generally amounts to temporary suspension from duty. For more serious or repeated offences there is a risk of deportation to the employee's home country.
Protection of workers' rights in the UAE
Despite the lack of legal protection for strikes and union action the UAE has been one of the leaders in the region in developing and protecting workers' rights. The following measures provide workers with protection in relation to particular aspects of the employment relationship:
Wage Protection System (WPS)
The WPS was introduced in the UAE in 2009 to govern and regulate the payment of employee's salaries. Although it applies to all companies registered in the mainland area it has had the most significant impact on the construction sector and its 'blue collar' workers.
Employers are required to pay their employees salaries electronically via the WPS to enable the local authorities to monitor the salary payments. This assists the local authorities in ensuring employees' salaries are paid on a regular basis in accordance with the contractual arrangements.
UAE Labour Law
The UAE Labour Law sets out minimum standards of employment with regards to all aspects of the employment relationship and provides protection for employers as well as employees. The UAE Labour Law deals with health and safety, annual leave, sickness absence, termination payments and the right to not be arbitrarily or unfairly dismissed. All employment relationships within the construction sector are subject to the UAE Labour Law.
Visa cancellation process
The vast majority of expatriate employees will be sponsored by their local employers for the purposes of obtaining a residence visa. When the employment relationship comes to an end employees are required to cancel their residence visas. Upon doing so, employees will sign a visa cancellation form confirming they have been paid sums they are entitled to receive. The document is generally signed before a Ministry of Labour official. At this stage, if the worker is unhappy with the calculation of the final termination payment, an official complaint can be raised.
It is unlawful for employers to withhold an employee's passport. This restricts the employer from maintaining absolute control over an employee's movements.
Recruitment and visa costs
It is unlawful for an employer to pass recruitment or visa fees onto its employees. The circumstances in which an employer may deduct money from an employee's salary are limited within the UAE Labour Law.
Perhaps the most significant risk to construction companies in respect of strike action is the risk of damage to their reputation. With Dubai winning Expo 2020, Qatar planning the World Cup 2022 and many other exciting projects planned within the region, the local construction sector is more transparent that it has ever been before. This increases the importance of construction companies managing employees appropriately and in accordance with the law.
Ultimately, the attitude of employers in response to strike action is of fundamental importance. Following the recent strike action ACC immediately stated that it would not penalise any of its employees who took part in the strike and that it would review the issues identified by the workers.
So long as basic employment rights are protected in accordance with the law and local employers respond to employee grievances in a positive and conciliatory manner, the UAE employment regime is in a healthy position to accommodate and develop the rights of its growing population of construction workers.
Luke Tapp is an employment law specialist at Pinsent Masons, the law firm behind Out-Law.com. Pinsent Masons is running a seminar on employment law in the Middle East in London on 14 July and Aberdeen on 16 July.