Dubai: The new UAE labour rules will drastically cut down the chances of prospective employees getting duped by “intermediaries” since all labour contracts will be direct, involving the individual and the employer, and the labour contracts will automatically be vetted by the Ministry of Labour.

“The employee will have full knowledge about all aspects of the employment terms … this will eradicate any chances of duping or an expectation mismatch,” said Yousuf Ali M.A., managing director of Lulu Group and a member of Abu Dhabi Chamber of Commerce. “As a country with a large multinational expatriate workforce, it is important to have set processes which will safeguard the interests of all stakeholders.

“Today, the entire world is looking towards UAE as a destination for setting up businesses and investments … we have to continuously refine the laws to encompass the changing scenarios and job market.”

The new rules also offer a nod to the fact that a younger workforce will also prefer to operate in a flexible contractual environment.

“What it accomplishes is greater transparency for employers as well, allowing for greater ease in hiring and enabling greater mobility of labour within — as well as across — industries,” said Sameer Lakhani, managing director at the investment firm Global Capital Partners.

“By formalising and unifying contracts, end-of-service and employer-related liabilities will finally be able to move on to the balance sheet given that the nature of these liabilities have now been contractually spelt out.”

Moreover, recruitment policies have been standardised for both term- and non-term contracts.

But there will be a cost that organisations with large workforces will have to bear. This could be particularly true for construction companies, health-care operators, those in manufacturing and even multi-company family businesses.

“Such new rules are bound to increase the cost of compliance with labour laws and, in turn, the cost of labour,” said Shahram Safai, partner at the law firm of Afridi & Angell. “This will, no doubt, be of concern for companies such as construction firms, maid agencies and other labour- intensive industries.

“However, such evolution in labour rules is inevitable as the country marches ahead towards its UAE Vision 2021.”

The new updates could also set the platform for additions at a later date, most notably to “consider allowing a freelance or ‘floating’ workforce,” said Dr Azad Moopen, chairman and managing director of Aster DM Healthcare. “Employers often require people on short contracts — so I think supporting this initiative could have a significant impact.

“The new labour rules especially address some of the problems expat workers can face — such as the inability to fully understand their contract. It also addresses the issue of clauses being added after a worker reaches UAE. The new labour laws address these challenges and appear to seal a gap.”

But there could be consequences for those recruitment agencies who act as intermediaries in bulk hiring. Labour for construction and even nursing candidates have often been victims of unsavoury practices indulged in by middlemen.

With the new rules, there could be downward pressure on the fees these recruitment agencies can impose, according to market sources.

Y. Sudhir Kumar Shetty, president of UAE Exchange, said the new steps are good for the industry and would help the country in attracting the best talent from across the world.

“This is very encouraging to see. It prevents exploitation of workers by their employers. Sometimes job contracts are changed by the employers to suit their requirements. The new rules will put a stop to these irregularities.”

Sayed Humayun Alam, general manager of Al Masaood Automobiles, said that the new labour rules would help the industry attract the right talent.

“It is good for people as well as the economy. The new rules provide an opportunity for people to switch jobs for better prospects and future. Companies can gain from it.”

“The UAE has positioned itself as a market of choice for expatriate talents from all around the world. In addition to the attractive work and living environment, the UAE has continuously strived to review and adjust its labour regulations and practices for the benefit of employees to ensure that attraction and retention of high level of talent,” said Khalid Al Merachlie, Consultant with Towers Watson Middle East.

“Labour reforms have been a continuous process in the UAE and, over the years, through a chain of initiatives, the government of the UAE has been able to raise the labour market transparency. Reforms have brought radical changes across all labour touch points like wages, people movement, etc. The new rules will further reinforce the UAE’s stature as a labour-friendly country,” said Promoth Manghat, CEO, UAE Exchange.