The UAE’s labor market continues to excel in key international competitiveness metrics for 2024, highlighting advancements in various facets of its employment framework.
Top rankings in employment indicators
According to the Ministry of Human Resources and Emiratisation’s ‘Labour Market Observatory,’ the UAE secured the top position globally in four key indicators from the Institute for Management Development World Competitiveness Yearbook 2024. These indicators include the employment rate, absence of labor disputes, low termination compensation costs, and workforce ratio.
Regional and global leadership
In the Arab region, the UAE ranked first in the Global Labour Resilience Index (GLRI) 2024, published by the global consultancy firm Whiteshield. Additionally, it placed second worldwide in workforce growth and absence of bureaucracy, while coming in third for key labor market metrics, such as residency law flexibility and employment growth, as per the World Competitiveness Booklet 2024.
Comprehensive global rankings
The report further indicates that the UAE ranks fourth globally in five areas: long-term unemployment rate, unit labor costs across the economy, expectations index, global expertise index, and labor regulations index. It also holds the fifth position globally for Foreign Skilled Workers and Unemployment Legislation.
Read more: UAE insurance sector profits reach $680.6 million in 2023, reports CBUAE
Ideal work environments
When it comes to ideal work environments, Dubai and Abu Dhabi are ranked third and fourth worldwide, respectively, in the Global Talent Analysis: Talent Mobility Patterns and Preferred Destinations – by TotalJobs2024.
Robust social protection system
The UAE boasts a robust social protection and worker welfare system that offers unemployment protection for 8.4 million employees across both federal and private sectors. This comprehensive framework encompasses all nationalities and economic sectors, delivering extensive support to the workforce. Moreover, the workers’ financial entitlements protection programme secures 98.8 percent of those in the private sector.
Enhancements in health coverage
Starting in 2025, the UAE will also expand its health insurance programme to ensure all workers receive comprehensive health coverage across all sectors. Additionally, a new “Savings System” will be introduced as an optional alternative to the end-of-service bonus, allowing employees more flexibility in managing their financial benefits.
Pioneering worker protection initiatives
Notably, the UAE is the first nation in the region to implement the Midday Break initiative, which prohibits outdoor work under direct sunlight from 12:30 to 3 p.m. during the hottest months, from June 15 to September 15. This initiative has been a vital part of UAE labor regulations for the past 20 years, safeguarding workers from the dangers of extreme heat. This year, 6,000 rest areas with essential services have been established for delivery workers nationwide, in collaboration with delivery companies and supported by government agencies.
Announcement of new decree-law
In August 2024, the UAE government announced the issuance of a federal decree-law that amends specific provisions of the domestic workers’ law and its previous amendments. These changes are designed to enhance the rights of all parties involved in employment relationships and to streamline the resolution of disputes.
Shift in dispute resolution
The amendments to the domestic workers’ law shift disputes from the Court of Appeal to the Court of First Instance. Under the new regulations, all pending applications, disputes, and grievances will be transferred from the Courts of Appeal to the Court of First Instance without any fees, effective from the date the law takes effect. However, this transfer does not apply to cases that have already received a judgment from a judge or are awaiting sentencing in the court system.
Role of the Ministry of Human Resources
The updated domestic workers’ law also specifies that if a disagreement arises between an employer, a domestic worker, or a recruitment agency, and it cannot be resolved amicably, the parties must consult the Ministry of Human Resources and Emiratization. The ministry is empowered to take appropriate measures to settle the dispute in accordance with the law’s executive regulations and effective decisions.
Referral process for unresolved disputes
If an amicable resolution cannot be reached within a specified timeframe, the ministry is required to refer the dispute to the Court of First Instance. This referral must include a memorandum summarizing the dispute, the arguments from both parties, and the ministry’s recommendations.
Authority to resolve claims
Additionally, the ministry can resolve disputes where the total claim amount does not exceed AED50,000. It can also address cases involving non-compliance with a previous amicable settlement decision by the ministry, regardless of the claim amount. In such instances, the ministry’s decision will have the effect of an executive instrument and must be treated as an enforcement order according to standard procedures.
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