Sunday, August 21, 2005

80,000 companies flouting emiratisation laws says Labour Ministry :: GN


About 80,000 companies in the UAE are in violation of the government's emiratisation policies and labour laws according to a recently published report. A senior official also said that many companies that appear to work along the lines of the Labour Ministry's new company categorisations only exist on paper. The official, who did not wish to be identified, was responding to a report published yesterday by the Arabic daily, Al Ittihad, which listed the numbers of companies in the newly implemented categorisation system.

Companies are categorised by their application of emiratisation policies and labour laws. Category A pays the least transaction fees, Category C, the most.
Category A firms are full compliance with emiratization rules. Categories are further explained here.

According to the labour ministry database, there are 440,000 companies registered in the UAE. About 81.5 per cent of those companies, some 359,000, are in category A. But the official said many of those companies had closed down. "The only reason why they were put in category A was because they have no employees and so they've got no fines, and no problems with emiratisation or the nationality quota rules," he said. He could not say how many such companies were in category A, but he said the majority of category A companies employed less than four people and so were exempt from mixed-nationality guidelines or emiratisation policies.

"They don't represent most of the companies employing expatriates," he said. Statistics indicate that only 18 per cent of expatriates, 450,000 people, work for category A companies, out of a registered expatriate labour force of 2.5 million. The official said the real number was "probably 10 per cent less than that". He said most companies were actually in category C, some 44,000.
It's not just about employing nationals, but also about uni-nationality workforces:

Category C companies have 75 per cent or more of its workforce from one nationality, or have violated emiratisation policies, or have employed workers with violations against them.

"The least amount of companies are in category B," he said. There are about 36,000 companies in this category.

The official said the Ministry would not reconsider forcing some companies to have a mixed-nationality workforce or to employ UAE nationals. Company representatives have repeatedly said that for most, it is impossible to reach category A. One complained that cafeterias, cleaning and construction companies, relying on low-skilled workers, would never make it to category A.

But the official said it was "their problem to deal with".

"Most sectors don't have to emiratise, they just have to have a mixed nationality workforce.

"An Indian cafeteria can employ some Pakistanis," he said.
UPDATE: Today's KT defines categories A, B, and C here.



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