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Tuesday, October 11, 2022

UAE: Unemployment Insurance Scheme Comes into Force, Provides Coherent Social Security

The UAE’s Ministry of Human Resources and Emiratisation announced on Tuesday that an Unemployment Insurance Scheme for employees of the federal government and the private sector has come into force.

The Decree-Law on Unemployment Insurance Scheme stipulates that the insured will be compensated with a cash amount for a specified period of time if they lost their job until they find another employment opportunity, which is subject to terms and conditions.

The new system provides a “social security scheme that ensures the sustainability of a decent life for Emiratis and resident employees during their unemployment period, while reducing business risks,” the minisry said. “It also aims to enhance the competitiveness of UAE nationals and boost the attractiveness of the UAE’s job market for the best international and national talents and contribute in building a competitive knowledge-based economy that is among the best globally.”

The compensation will be paid monthly, calculated at 60 percent of the employee’s subscription salary and subject to a maximum of AED20,000 per month, for a period of no more than three months from the date of their unemployment.

Dr Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, said: “The decree reflects the UAE government’s approach in developing the business environment and enhancing the UAE’s position as a preferred destination to work and live, which is confirmed by global indices. Reports show the preference of people from all over the world to work and settle in the UAE because of the advantages it provides in terms of security, safety, job benefits, as well as the level of education, health, and quality of life.”

He added: “The UAE prioritises preserving human dignity, and this decree enhances the legislative environment to safeguard the rights of all employees in the country – Emiratis and residents alike and provides them with the best means of care at all levels. This contributes to enhancing the stability and prosperity of society, which is among the top priorities of our wise leadership.”

Terms and Conditions

The terms and conditions of the new law applies to all employees in the federal government and the private sector in the UAE, except for investors (owners of the establishments in which they work), domestic helpers, part-time employees, juveniles under the age of 18, and retirees who receive a retirement pension and have joined a new job.

The law stipulates that to be eligible for compensation, the employee must have been insured for no less than 12 continuous months, calculated from the date of subscription in the insurance system. In addition, the beneficiary shall not have been dismissed from their work for disciplinary reasons, as outlined in the provisions of the Law on Regulating Labour Relations and the Human Resources Law in the Federal Government and any relevant legislation in force. Furthermore, the compensation claim should not be through fraud or deception. If it is found that the establishment in which the employee works is not real, the penalties stipulated in the Law on Regulating Labour Relations and any other legislation in force in the country shall apply to the establishment as well as the insured. Lastly, the compensation shall be suspended once the employee joins another job during the compensation period.

The insured may agree on additional benefits with the service providers – the insurance companies licensed by Central Bank of the UAE and fulfil the conditions for providing unemployment insurance, which are issued by the UAE Cabinet after consulting with the Central Bank of the UAE. Also, service providers may include other government entities assigned by the UAE Cabinet to provide unemployment insurance services.

The compensation to which the insured is entitled to under this Decree-Law shall not influence any other compensation or entitlements outlined under any other legislation in force in the UAE.

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