MECOMED HR Group MENA Employment Law Update · 2017-08-08 · squirepattonboggs.com 3 Today’s...

MECOMED HR Group

MENA Employment Law Update

Presented by Sarah Lawrence,

Partner & Head of Employment

18 May 2017

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Today’s update

Overview

Nationalisation requirements across the GCC

Redundancy laws across the GCC

Key changes in KSA for 2017

New requirements for terminating KSA nationals

Nitaqat

Increase in immigration fees for expatriates/Amnesty for those in breach

Maternity law changes in the UAE

Forecast changes to the Oman Labour Law

Changes to the sponsorship system in Qatar

Changes on the horizon in Morocco, Algeria and Egypt


Nationalisation

What is nationalisation and where does it apply?

“Emiratisation” quotas

• 2% in companies employing 50 or more workers

• 4% in banking sector firms

• 5% in insurance sector firms

Benefits for companies in compliance?

Recent changes to Emiratisation requirements?

• Health & Safety Officers

• Data processing positions

• Classification of companies

What is Tawteen and who is affected?

Emiratisation Partners Club


Redundancy across the GCC

Redundancy – a valid

reason for termination?

Bahrain

• Articles 110 and 111 of the Labour Law

• Specific compensation

• Notification to MOL

Qatar

• No provisions in the Qatar Labour Law

• Compensation/reinstatement

UAE

• No provisions in the Labour Law

• Case law

• Compensation

KSA

• Article 74 of the Labour Law

• Compensation

• Protection for KSA nationals Oman

• No provisions in the Labour Law

• Closure likely to be viewed as a fair reason for termination

• Minimum compensation is 3 months’ pay

Kuwait

• Article 50 – redundancy is recognised for a full closure

• Notice periods are a minimum of 3 months for monthly paid employees


Focus on Saudi Arabia – key changes (1)

Are there restrictions on terminating Saudi nationals?

KSA Labour Law changes

Redundancy as a ground for termination in KSA

Full closure versus individual terminations

What constitutes a collective dismissal requiring prior

approval from the labour authorities?

Terminating the employment of a group of KSA nationals

No fault termination i.e. redundancy

Where the employer terminates more than 1% of the KSA national

population of the workforce or more than 10 KSA nationals within a

one year period



What are the notification requirements?

What information should the

company provide to the local

labour office?

What considerations will be

taken into account?

What are the possible

outcomes?

Supporting financial information to

justify the proposed terminations

The company’s financial position Further information may be

requested

Confirmation of (i) the no of

employees to be dismissed; (ii)

their names; (iii) a description of

their position; and (iv) any individual

reasons

Whether the termination of KSA

nationals could be avoided by

instead terminating the non-KSA

nationals carrying out similar roles

The notification may be accepted

outright and/or the labour office

may require the company to

assist with putting in place a plan

to reduce the impact for the

Saudi nationals affected

Full details of the non-Saudi

nationals of the same grade not

affected

Suitable alternative employment Alternative solutions could be

proposed/negotiated to save jobs

Full details of any measures which

the company has taken to avoid the

terminations

Whether a compromise/settlement

can be reached between the parties

The notification could be rejected

outright – classifying the

dismissals as unlawful



Practical impact?

Ensure you have clear and evidentially sound financial

reasons for:

• the terminations overall; and

• to justify any selection of Saudi nationals over expatriates

Factor in potential delays whilst awaiting approvals from the

labour office

Penalties for breach?

• The company is likely to be suspended from accessing services

provided by the MOL for up to 720 days

• Limits the company’s ability to obtain or renew work permits


Focus on Saudi Arabia – Nitaqat (1)

Changes to Nitaqat

Activities Size Platinum Dark

green

Medium

green

Light

green

Yellow Red

Information

technology

Small (b) 100% 55% 37% 27% 19% 10%

Medium (a) 100% 63% 45% 35% 28% 18%

Medium (b) 100% 66% 48% 38% 31% 18%

Medium (c) 100% 69% 51% 41% 34% 18%

Large 100% 72% 54% 44% 37% 21%

Huge 100% 75% 57% 47% 40% 21%

Pharmaceuticals Small (b) 100% 28% 19% 15% 9% 7%

Medium (a) 100% 31% 24% 20% 15% 12%

Medium (b) 100% 33% 29% 23% 18% 12%

Medium (c) 100% 33% 29% 23% 18% 12%

Large 100% 33% 29% 23% 18% 12%

Huge 100% 33% 29% 23% 18% 12%


Focus on Saudi Arabia – Nitaqat (2)

Classification of Entities in

KSA

Small B (6 – 49)

Medium A (50 –

99)

Medium B (100 –

199)

Medium C (200 –

499)

Large (500 – 2999)

Huge (More than

3000)


Focus on Saudi Arabia – other developments


Focus on the UAE – Maternity leave

• 45 days’ fully paid leave (employees with 12 months’ service)

• Half pay for those with less than 12 months’ service

• 100 days’ unpaid

Current position

• 3 months’ fully-paid leave

• Applicable for all government employees across the UAE

• Effective from March 2017

Change for public sector

• set up by Sheikha Fatima bint Mubarak, President of the Supreme Council for Motherhood and Childhood

• to review and revise the existing maternity leave provisions in the Labour Law

• DIFC and ADGM – 60 days’ paid leave

Committee for change


Focus on Oman

New Oman Labour Law likely?

Minister of Manpower

Promises to be more flexible and easier for the labor market to

attract investment

Removal of NOC requirement to change roles?

• Workers who fail to obtain a NOC when leaving their employer are

currently banned from returning to Oman for two years

• Reports of this being exploited – employees being required to give up

their end of service gratuity payments in return for an NOC

• Discussion around a new GCC wide permit


Focus on Qatar (1)

Qatar’s sponsorship (kafala) system:

What were the issues with the system previously?

• previously required all foreign national employees to seek their employer’s

permission to be able to leave the country e.g. to take annual leave or when

changing roles

• Substitute contracts

• Employer approval required to change roles

• Expatriate employees who cancelled their work permits and left Qatar had to

wait 2 years before returning

• the new regulations in theory make it easier for

expatriates to leave the country and change positions


Focus on Qatar (2)

And what are the

key changes?

Expatriates can now

apply to the government for an exit

permit

The employer can object

but the employee effectively

has an appeal route

Employers are

restricted from holding

their employees’ passports

Fixed term contract

completion = ability to

change jobs 7 to 30 days to obtain a residence

permit

2 year ban removed

Employment contracts in

format approved by

MOL

Significant fines or

penalties for failure to comply


Focus on Algeria

Algeria - New Bill of Law to amend the Labour Code?

Recently amended by the Algerian Ministry of Labour to reach 661

Articles

March 2017 – sent for review by the different unions for their opinions

and comments

What are the main aims of the amendments to the Labour Code?

Prevention of illegal employment. For this purpose, the Ministry of Labor proposes

to set up a national commission, with different representation from the ministry

department and sub-commissions

Strengthening the protection of fixed term contracts

Protection against the sexual harassment in the workplace

Articles 53, 54 and 55 of the draft Labor Code concerns individuals with special

needs. The aim is to facilitate their social and professional integration through the

consultation of a medical examiner and requiring employers to create a safe

workplace for people with disabilities.


Focus on Morocco

Employment relationship governed by the Labour Code & CBAs

Labour Law was codified 12 years ago

Works Council or Delegates

2 years ago – discussion with unions/employers regarding modernising the

legislation and in particular: • Severance packages (unions wanting to increase this from 6 months to 12 months)

• Creating Tribunals dedicated to labour and employment matters

• Creating a better framework of CBAs

New constitution in 2011 brought a lot of changes - a lot of legislative forms

were expected but yet to happen

Right to strike – currently no such right – unions pushing for this

Right to access information

July 2016 – new law regarding domestic workers giving them better

protection in relation to working hours, minimum wage etc.


Focus on Egypt

What are the key proposed changes?

New Labour Law changes proposed – draft still in discussion

No significant changes or updates in the labor law or the practice in Egypt during the last few years


Focus on Egypt

New system for salary transfer

For resignations to be effective must be approved by the

competent administrative authority – collective

termination settlements?

Paid study leave for exams

Non-Muslim employees to have the same leave

entitlements

Addressed discrepancy in maternity laws – all

employees now entitled to 3 period of maternity

leave during their employment

Working hours reduced by one hour for pregnant

employees once 6 months’ pregnant

Cannot require pregnant employees to work

overtime (for up to 6 months after they return

to work)

Training paid for by the company can be reclaimed if the

employee leaves

Maximum working hours increased from 10 to 12

hours (including overtime)


Focus on Egypt

Annual leave 15 days for first year of work will go up to 21 days for the second year (30

days if you have 10 years’ service and 45 days for those

50 years’ old + and those with disabilities)

Employer can impose drug/infectious disease tests

at company’s expense

Compensation for an illegitimate termination

reduced from 12 months to 6 months’ pay & reinstatement

cannot be ordered

Fixed term contracts to be for a minimum of 1 year –

problem for temporary/seasonal

employee use?

Employees absent for more than 20 non-consecutive days or 10+ consecutive

days in any 12 month period considered to have resigned (no requirement to obtain a

court order)

Planning to open mediation and conciliation centres and have an appeals department

for labour matters

M&A /Transfer of employees – new law to deal with the

current ambiguity regarding continuation of contracts &

benefits

Employers required to keep employee files for 5 years

post termination (previously one year)


Any Questions…..?


Disclaimer

The information contained in this presentation is for general information

purposes only and should not be construed as giving the ground for any

action or omission in connection with the above material.

This presentation should not be construed as professional advice on legal or

any other matters.

The examples given in this presentation are described with a level of detail

that does not provide for their implementation without additional

comprehensive review with due regard to specific relevant facts and

circumstances.

The application of laws and statutes may vary depending on particular

circumstances.

Squire Patton Boggs does not assume liability for any damage that may be

caused to anyone as a result of any action (or omission) on the basis of the

information contained herein.

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MECOMED HR Group MENA Employment Law Update · 2017-08-08 · squirepattonboggs.com 3 Today’s...

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