Menu

MoHRE issues resolution on bank guarantees and employees’ protection insurance scheme

Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, has issued the Ministerial Resolution No. 318 of 2022 regarding bank guarantees and employees’ protection insurance scheme in the private sector.

This decision is in line with the legislative framework that aims to preserve workers’ rights, support the business community, enhance the competitiveness and stability of the UAE’s work environment, and strengthen its reputation as a preferred and safe destination to live, work, and invest.

Aisha Belharfia, Assistant Undersecretary for Labour Affairs at the Ministry of Human Resources and Emiratisation (MOHRE), said, “The UAE’s commitment to guarantee and balance the rights of workers and employers reflect national legislations and highlight the nation’s active role in the main agreements originating from the International Labour Organisation.”

“Offering establishments the option of choosing between providing a bank guarantee or an insurance policy allows them to choose what is most suitable for them and helps reduce operational costs, enabling employers to fulfil their legal obligations towards their workers,” she added.

Under the new resolution, establishments may pursue one of two options – the first, provide a bank guarantee of no less than AED3,000 for each worker, paid through a UAE-based bank, provided that the guarantee is valid for one year, can be automatically renewed and paid at the Ministry of Human Resources and Emiratisation’s demand, without any other restrictions.

The second option entails a 30-month insurance policy, at a value of AED137.50 for each skilled worker, AED180 for each low-skilled worker and AED250 for each worker paid by high-risk establishments that are not registered with the Wages Protection System (WPS).

The insurance coverage amounts to up to AED20,000 and includes the wages of the worker’s last 120 working days, the end-of-service gratuity, the expenses of returning the worker to their home country, and in the event of the worker’s death, the costs of repatriating the body to his home country, and other rights and entitlements that the employer is unable to fulfil, based on a decision by the ministry or the concerned labour court.

The resolution outlines four cases where the employer may submit a request to reclaim the employee’s bank guarantee or the remainder therefrom, including – in the event of cancellation of the employee’s work permit and providing proof of their departure from the country; in case of the employee’s death and providing proof of the body’s repatriation or burial in the UAE; if the employee is transferring to a new employer; or any other case in which the employer provides proof of cancellation of the employee’s work permit and payment of entitlements due to the employee.

The Ministry of Human Resources and Emiratisation reserves the right to refuse to reimburse the bank guarantee to the employer in two cases – if the employer is a party to a collective labour dispute until the employee’s entitlements are settled; or if evidence of due fines against the establishment is proven, or if the establishment’s work permits have been suspended.

Related Posts

LEAVE A COMMENT

Make sure you enter the(*) required information where indicated. HTML code is not allowed