Reasons for Issuing Ministerial Resolution No. 318
The issuance of Resolution No. 318 by the UAE Ministry of Human Resource and Emiratisation (MoHRE) is driven by the imperative to combat illicit practices, particularly residency trade. This unethical practice involves the recruitment of expatriate workers under deceptive terms, leaving them vulnerable without legitimate employment. Such practices not only violate the rights and protections guaranteed by UAE law but also pose significant economic and social challenges to the nation and individuals employed illegally.
Historical Context
Resolution No. 318 addresses the longstanding issue of residency trade, where expatriates go under sponsorship agreements that bypass legal frameworks. This clandestine practice places substantial financial burdens on workers who invest heavily in the hope of securing legitimate livelihoods. Under the guise of legality, these workers often fall victim to exploitation through undisclosed agreements. Employers charge fees for work permits outside official channels, exacerbating economic challenges and societal pressures. This practice not only impacts individual livelihoods, but also strains national resources and undermines the integrity of the labor market in the UAE.
New Legal Framework
Cabinet Resolution No. (318) of 2024 targets establishments that fail to engage in their licensed activities despite registering workers. This resolution is enforced through rigorous inspections conducted by the Ministry to verify genuine employment relationships.
Resolution Framework
Resolution No. 318 establishes stringent measures to rectify these issues. It mandates thorough inspections to ensure that registered workers are genuinely employed in licensed activities. Non-compliant establishments face penalties such as freezing of work permits, administrative fines, and reclassification, aiming to deter illegal practices and promote transparency in employment practices.
Administrative Actions and Penalties
- Freezing of Work Permits: Work permits registered at non-compliant establishments will be frozen.
- Administrative Fines: Fines specified under Cabinet Resolution No. 21 of 2020 will be imposed, and establishments may be reclassified to a lower category.
- Suspension of Ministry Services: All Ministry services to violating establishments will be suspended, except for essential functions like cancelling work permits or registering work interruption complaints, if proven.
- Suspension of Services: Services to individual establishments or those exclusively owned by the violator will be suspended, with exceptions for essential functions.
- Prohibition on Registering New Facilities: Owners of non-compliant establishments will be prohibited from registering new facilities in the Ministry’s systems.
- Prescribed Procedures: Procedures will be implemented for citizens registered under these establishments, aligning with decisions and regulations addressing fictitious resettlement cases.
- Administrative and Penal Measures: Non-compliant establishments will face administrative and penal measures under Federal Decree Law No. (33) of 2021, including fines and penalties for offenses such as employing unauthorized workers, exploiting electronic powers, and violating employment regulations.
- A fine of not less than AED 50,000 and not more than AED 200,000 shall be imposed on:
a) Employing an unauthorized worker.
b) Recruiting or employing a worker and subsequently leaving them without work.
c) Using work permits for purposes other than those for which they were issued.
d) Closing a facility or ceasing its operations without settling workers’ rights.
e) Employing minors in violation of the provisions of this decree law.
f) Agreeing to employ a minor in violation of the provisions of this Decree Law by someone who has guardianship or custody.
- Implementation and Reporting: The Undersecretary of the Ministry of Human Resources issues administrative decisions to enforce these measures. Reports on non-compliant establishments and actions taken are forwarded to relevant authorities, including the Ministry of Economic Affairs, the Federal Authority for Identity and Citizenship, Customs, Port Security, and other pertinent stakeholders. Legal actions are then pursued against violators in accordance with established protocols.
Conclusion
Council of Ministers Decision No. 318 of 2024 represents a definitive step towards fostering a fair and regulated business environment in the UAE. By enforcing compliance with licensed activities and combating residency trade, MoHRE underscores its commitment to protecting workers’ rights, enhancing economic stability, and reinforcing the nation’s legal framework. This resolution aligns with the UAE’s vision for sustainable development and underscores its commitment to ethical business practices on a global scale.
