UAE Announces New Classification System For Companies Starting 1st June 

Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratization, has highlighted that his ministry would constantly support the nation’s struggle in getting international administration in business and major national purposes, with a major concentration on boosting Emiratization programs and authorizing national skills.

The minister outlined that the new categorization of the corporation, which would come into action on 1st June 2022, and its concerned resolutions complete business people’s requirements and secure employees’ rights while inspiring invention and promoting the small and medium enterprises. “Moreover, the categorization gives rewarding motivations to corporations that engage to the specified rules and guidelines on encouraging cultural and demographic diversification, in line with the values of the society, depending on patience and equal possibilities for all.”

Dr. Al Awar has given information about the categorization system, which comes under Cabinet Resolution No. 18 of 2022, and concerned ministerial resolutions at a media presentation today at the MoHRE headquarters in the Dubai emirate. He stated that the general guidelines for evolving the labor market are encouraged by the Principles of the 50, which targets “Building the world’s best and most vibrant economy.”

In this context, Dr. Al Awar highlighted MoHRE’s wider outlook on the business industry, depending on four pillars –

  1. Supporting and strengthening national skills and capabilities.
  2. Sustaining the labor market’s magnificence for international skills and greatly skilled people.
  3. Securing employees, and giving maximum assurance for their rights.
  4. Making capable and promoting a corporation’s abilities to get stable development.

Dr. Al Awar stated that the new categorization of corporations divides existing corporations into three different classifications. The categories standards complete the customer’s requirements for streamlining transactions, with top-level governance supported by smart solutions, given by MoHRE’s digital ecosystem. The corporations would be classified by utilizing a communicative automated system that streamlines transforming a corporation’s categorization transparently, depending on the processes held by every corporation or the transactions go through.  

The minister remembered that the categorization gives incentives and immunities for corporations under the national economic priorities and Emiratization programs while increasing the priority sectors. This also concerns the value system on which any prosperous international economy should depend, i.e. equality and justice in employment possibilities, apart from encouraging patience and inclusion, without inhibiting workers’ freedom to select the skills and abilities they want to compel. Finally, the categorization sets the new cost for services in a way that is basically connected to the choices workers would make.

Dr. Al Awar said that the categorization of new corporations – is “Based on the extent of their commitment to the rule and salary security system, employees’ rights security, and their adherence to the guidelines of fostering cultural and demographic diversification, along with the resolutions that control the labor market.” Most existing corporations in the nation that complete all these commitments would be in the second class.

A few corporations would be promoted to the first category, and these corporations would experience remarkable reductions in costs depending on their meeting different standards. Furthermore, the categorization of other corporations would come in the third category in terms of non-adherence to the guidelines, rules, and regulations controlling the labor market, he stated.  

First Category 

Dr. Al Awar discussed how corporations can be upgraded to the first category, once they complete around one norm. These comprise –

  1. Increasing their Emiratization rate around three times above the target.
  2. Collaborating with the “Nafis” program to train around 500 people yearly.
  1. Standing a venture held by a young national as per the sanctioned norms in this regard.
  1. Existing one of the employment and training hubs that support executing the employees planning policy by promoting cultural diversification.
  1. Existing active in the targeted sectors and activities decided by the Council of Ministers depending on the suggestion presented by the MoHRE.

Second Category 

Corporations that don’t complete any of these measures, while committing to the rules and guidelines of encouraging cultural and demographic diversification would be automatically categorized in the second category.

Third Category 

The 3rd category would contain all other corporations found by the ministry to violate Federal law No. 22 of 2021 about the entity of labor rapports and its leader regulations, the solutions controlling the labor market, or norms for securing rights, shortage of commitment to promoting cultural and demographic diversification in the labor market.

Dr. Al Awar explained that the new categorization gets several crucial targets that give the national economy an intersection with all other pillars of the legal system. The net classification would improve economy diversification and support the evolvement of employment agencies to make reasonable and comparable possibilities in the private sector to increase the values of patience and cultural and demographic diversification.

This move is responsible for the nation’s desire for the next 50 years, and this improves its status as an international center for skills, corporations, and acquisitions. This also supports the target of evolving a knowledge economy depending on experience exchange, ability forming, and starting new industries that align with the future economy and assist increase socio-economic growth.

Through the decision, MoHRE looks to improve coordination with the local and federal government units to support guidelines that increase the worker market’s productivity and sustainability. It is the major aspect on which corporation categorization criteria and their promotion or demotion are dependent.

The ministry would give a transparent roadmap for corporations functioning in the nation to elevate their class and boost the confidence of investors. This would also act through on its rapport with the private industry to support corporations that have 50 or more employees in their conversion journey, under the new decision on cultural and demographic diversification, within the structure of a transitional tenure that can be utilized to run evolvement functions.

The lawful system regarding the worker market and Emiratization in the United Arab Emirates has seen the implementation of many decisions that assist business evolvement and support the Emiratization of national abilities and the security of employees, through the new federal rule on job-related insurance, moreover the decision to increase the recent Emiratization rates by 2% yearly for proficient jobs in private industries that have 50 or more workers, and total boost rate of 10% by 2026.

Also Read: Digital Capabilities are Key to Resilience of MSMEs in Dubai During Covid

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