An expatriate worker whose labour card is cancelled may not be retained with the employer unless a new work permit is obtained, according to a circular issued by the Ministry of Labour and Social Affairs.

"If a sponsor cancels the labour card of an employee but later decides to make the worker stay on in the UAE, he (the sponsor) has to apply for a new work permit," said the circular signed by Dr Khalid Al Khazraji, Undersecretary of the ministry.

The move was prompted by the fact that certain employers get the labour cards of their workers cancelled and later reach an agreement with the workers to resume work and drop other cancellation procedures, keeping the residence visa valid.

Since the employment relationship is ended and the workers received their dues and signed clearance, the employers must re-employ them if they decide to keep them, the circular said.

If an employer decides to re-employ a staff whose labour card is cancelled, it must be done within 30 days from the date of cancellation.

The employer must also submit a letter to this effect to the Licensing Department or the Labour Office. The letter must be enclosed with an application for a new labour card along with all documents required, including a new employment contract.

The labour cards section will issue a new card with the same profession based on the visa stamped in the worker's passport, according to the circular which took effect immediately.

Dr Al Khazraji said that the labour market requires reorganisation, stressing that recent ministerial decisions are aimed at this target.

He said the ministry endeavour to improve the performance of departments dealing with labour inspection and labour relations, so that 'new developments' in the labour field could be handled. He emphasised that the ministry alone wouldn't be able to control the labour market, but required the cooperation of the authorities concerned.

Sources said the ministry has decided to severely punish firms that flout labour rules and employment of expatriates. The ministry has previously issued several decisions to limit illegal activities of some firms that flood the market with unwanted employees.

"If a firm does not undertake necessary procedures to cancel the labour permit after the work relations between him and the firm have ended, the firm's activities will be barred until the violation is cleared.

"If a firm does not renew expired cards of its employees, it's activities will be suspended immediately after the grace period for the renewal expires. Again, it will only be able to begin transacting business three months after clearing the violation."

The sources added: "Firms failing to pay their fines will have their work suspended and will only be allowed to resume six months after the violation is cleared. Firms not paying their employees regularly will be closed down and the licence cancelled if the offence is repeated."