Some companies violating labour law do not exist

Dubai: A significant number of companies in the UAE which have committed labour card violations exist only on paper or are engaged mainly in selling work permits and are not viable companies.

Humaid Bin Demas, assistant labour under-secretary, said that there are about 50,000 companies that have violated labour card regulations.

"Around 80 per cent of these companies fall into three categories companies that only exist on paper, companies that mainly sell work permits and businesses that are going through financial crises," said Bin Demas.

Many workers purchasing labour permits from such companies stay in the country illegally after their permit expires. As they stay illegally, they have to survive with low salaries and could claim no rights or compensation if injured.

According to Ministry of Labour statistics, around 90 per cent of the firms violating labour card rules are for people who do not work for the companies sponsoring them.

"This is unacceptable and the ministry is taking serious steps against it such as stopping transactions with companies that have labour card violations," said Bin Demas.

The ministry is currently following a policy of stopping all transactions with the company as well as with all other establishments owned by the same sponsor.

"This policy is proving to be effective [and] there are around 290,000 labour cards that have been cancelled in the last seven months."

Bin Demas said workers who find that their company is not operating have three months to contact the ministry and legalise their presence in the UAE.

Dubai A Cabinet decision issued in 2005 fines companies that delay issuing or renewing labour permits for more than 60 days, up to Dh5,000 from Dh1,000, depending on the company's category.

If a company allows labour permits to expire or fails to obtain them for more than 60 days but less than six months, are fined between Dh3,000 and Dh5,000.

Companies that fail to do this have to pay a Dh5,000 fee each year. Many companies accumulate thousands of dirhams in fines.

However, earlier this year the Ministry granted a grace period that ended in March for companies that have labour card violations to readjust their legal situation at the ministry.

The Ministry also allowed them to pay only Dh 5,000 per expired labour card instead of paying the accumulated fines.