To protect the rights of the worker in the event of bankruptcy or inability to pay his dues

The employer is obligated to cover the worker with insurance of up to 20 thousand dirhams

For workers, the employer has two options, either to maintain the existing insurance system, or to purchase the insurance policy.

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The UAE digital government has confirmed that the employer is obligated to provide insurance coverage for the worker of up to 20,000 dirhams, to protect the worker from any developments that may affect him, such as the bankruptcy of the company or its inability to pay his dues.

She pointed out that this procedure represents an alternative to the procedure that was followed before, which is the deposit of 3000 dirhams for each worker with the Ministry of Human Resources and Emiratisation.

She pointed out that on October 15, 2018, the ministry began implementing the new insurance system for its registered workers, in implementation of the Cabinet's decision regarding the abolition of the mandatory applicable bank guarantee, estimated at 3000 dirhams per month when recruiting a new worker, and replacing it with a low-cost insurance system.

Ministerial Resolution No. 318 of 2022 regarding banking and insurance guarantees on workers’ rights allowed establishments the freedom to choose the means of protection for workers’ rights through one of two options: Paying 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 It is valid from the date of its issuance and for a period of one year, and it is automatically renewed, and paid at the request of the ministry and without any other restrictions. The second option is to pay the worker’s insurance value by purchasing the insurance policy.

She indicated that the business owner can purchase the insurance product through the insurance complex portal (dubins-wpp.ae), noting that this new system is applied to protect the rights of workers in the private sector, in addition to protecting the rights of domestic workers.

On the working mechanism of the labor insurance system, she explained that for workers currently in establishments who are sponsored under the existing bank guarantee system at a value of 3000 dirhams, the employer has two options, either to maintain the existing bank guarantee system, or to purchase the insurance policy according to the new system, and that is only When renewing the worker's work permit and not before that.

As for the new workers, and the recruitment and employment of new workers for the company, the option is to purchase the insurance policy upon obtaining the work permit for two years, or to provide a bank guarantee of 3000 dirhams for each worker, in accordance with the standards and requirements in force in the current banking guarantee system, which will work in parallel With the new insurance system to allow employers to choose the system they want.

And regarding the insurance coverage of labor rights and entitlements, in the event of the company’s bankruptcy, or its inability to pay the worker’s dues, it stressed that the insurance coverage for the rights and labor entitlements of the insured worker amounts to 20,000 dirhams, and the document covers any labor entitlements contained in Federal Decree-Law No. (33) For the year 2021 regarding the Law Regulating Labor Relations and its Executive Regulations, in addition to the labor rights arising in accordance with Federal Law No. (10) of 2017 regarding domestic workers and its amendments and decisions issued to implement its provisions, for example: wages, with a maximum wage of the last 120 days preceding the last working day of the worker End of service gratuity, worker return expenses, costs of moving the body in case of death, costs related to work injuries and diseases, travel tickets for workers cut off from work, in the event that a report of interruption is registered and the worker is arrested during the insurance coverage period.

As for domestic workers, the document covers the following: unpaid end of service benefits, unpaid wages and a maximum wage of the last 120 days preceding the worker’s last working day, unpaid repatriation costs, costs related to unpaid work injuries and illnesses, transportation costs in the event of death, Travel tickets for workers who are absent from work, in the event that a report of work interruption is registered and the worker is seized during the insurance coverage period, i.e. other unpaid labor financial entitlements mentioned in Federal Law No. (10) of 2017 regarding the organization of labor relations and its amendments and the decisions issued to implement its provisions.

She stated that the coverage limits amount to 20,000 dirhams per claim and for the total of claims during the coverage period. The new insurance system does not cover the worker’s health insurance, knowing that the insurance company’s payment in the event of the employer’s incapacity does not mean releasing the liability of the employer, but rather he will be required to pay all amounts paid by the insurance company. establishments, not auxiliary workers.

It indicated the cases of refunding the bank guarantee, which are the cancellation of the worker’s work permit and proof of his leaving the state, the death of the worker and the submission of evidence that his body was deported or buried within the state, the case of the worker’s transfer to a new employer, and any other case in which the employer proves the cancellation of the worker’s permit and payment of all his dues.

Bank guarantee refund

The UAE digital government reported that the issuance of the insurance policy and the refund of the bank guarantee are requested from the businessmen service centers and the recruitment centers of auxiliary workers, and through the smart application of the Ministry of Human Resources and Emiratisation.

The bank guarantees are refunded to the establishments in the event of canceling the work permit of the worker covered by these guarantees, and thus the termination of the work relationship between the worker and the employer, or in the case of purchasing the insurance policy when renewing the worker’s work permit, provided that the facility has not committed violations related to non-payment of salaries during the last six months Before renewing the expired permit.

The new system is applied to protect the rights of workers in the private sector, in addition to protecting the rights of domestic workers.

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