The "Human Resources and Emiratisation" issues a decision regarding banking guarantee and insurance for workers' rights

Assistant Undersecretary for Labor Affairs of the Ministry of Human Resources and Emiratisation, Aisha Balharfia

The Minister of Human Resources and Emiratisation, Dr. Abdul-Rahman Abdul-Mannan Al-Awar, 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.

Assistant Undersecretary of the Ministry of Human Resources and Emiratisation for Labor Affairs, Aisha Al Harfiya, 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 line with international agreements governing the protection of employment."

She explained that "the approval of the bank guarantee or insurance for the workers provides the facilities with two options that take into account reducing the operational costs, and in a way that enables the facilities to fulfill their legal obligations towards their employees."

The ministerial decision provided facilities with two options;

The first is the payment of 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, 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 is up 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 On a decision issued by the Ministry or the competent labor court.

The decision clarified 4 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. It is proven that his body has been deported or buried inside the country, when the worker transfers to a new employer, and in any other case in which the employer provides evidence of canceling the worker’s work permit and paying 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 the 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.

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