Officially.. Implementation of a new system of workers' rights and bank guarantees for workers in the UAE

His Excellency Dr. Abdul-Rahman Abdul-Mannan Al-Awar, Minister of Human Resources and Emiratisation, issued Ministerial Resolution No. 318 of 2022 regarding bank guarantee and insurance for workers' rights in the private sector.

The decision comes within the framework of the legislative system aimed at preserving the rights of workers and supporting the practice of business, which will positively reflect on enhancing the competitiveness and stability of the work environment and consolidating the reputation of the state as an ideal and safe destination for living, working and investing. Aisha Belharfia, Assistant Undersecretary for Labor Affairs of the Ministry of Human Resources and Emiratisation, said: "The firm commitment to ensuring the rights of workers and employers in a balanced manner comes as a translation of national legislation and the vision of the UAE and in accordance with international agreements governing the protection of employment."
She added: "Approving the bank guarantee or insurance for the workers provides the facilities with two options that take into account reducing operational costs, and enabling the facilities to fulfill their legal obligations towards their employees." The ministerial decision provided facilities with two options, the first of which is to pay a bank guarantee of no less than 3000 dirhams for each worker, through one of the banks operating in the country, provided that the guarantee is valid from the date of its issuance and for a period of one year, and is automatically renewed, and paid at the request of the ministry and without any other restrictions. The other option is to insure the worker through an insurance policy that extends for 30 months, at a value of 137.50 dirhams for each skilled worker, 180 dirhams for each low-skilled worker, and 250 dirhams paid by the high-risk violating facility that is not committed to the wage protection system for each worker working for it.
The insurance coverage amounts to 20,000 dirhams and includes wages and a maximum wage of the last 120 days preceding the worker’s last working day, end-of-service gratuity, expenses for the worker’s return to his country, the costs of transporting the body of the deceased worker to his country and other rights and entitlements of labor that the employer is unable to fulfill, based on A decision issued by the ministry or the competent labor court.
The decision clarified four cases, under one of which the employer may submit a request to recover the bank guarantee of the worker or the remainder of it if he had chosen to pay the bank guarantee through one of the banks operating in the country. The deportation or burial of his corpse inside the country, upon the worker’s transfer to a new employer, and any other case in which the employer provides proof of cancellation of the worker’s work permit and payment of all his dues. The decision stipulated two cases in which the Ministry has the right to refrain from returning the bank guarantee owed to the employer, which are if the employer is a party to a collective labor dispute until workers’ dues are paid, or if it is proven that there are fines owed by the facility or if it has been suspended from granting work permits.