MECOMED HR Group MENA Employment Law Update · 2017-08-08 · squirepattonboggs.com 3 Today’s...
Transcript of 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
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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
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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
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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
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Focus on Saudi Arabia – key changes (2)
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
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Focus on Saudi Arabia – key changes (3)
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
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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%
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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)
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Focus on Saudi Arabia – other developments
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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
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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
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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
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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
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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.
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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.
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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
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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)
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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)
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Any Questions…..?
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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.