All institutions registered under the UAE labour ministry will, from September this year, start making payment of their workers' wages and salaries through the newly introduced Wages Protection System (WPS). UAE Labour Minister, Saqr Ghobash, has issued a decree enforcing the new system, which involves transfer of salaries through few selected financial institutions, authorised and regulated by the government.
The move, which is in implementation of cabinet decree no. 133/1, is aimed at boosting transparency and stability on the labour market. It also seeks to protect the rights of workers in the country.
The minister and the UAE Central Bank Governor, Sultan bin Nasir Al-Suwaidi, recently launched the WPS, which is based on latest technologies. Under the new system, the employer can choose any registered agent to participate in the WPS. On receiving details about workers wages, the bank or institution, will send this information electronically to WPS. The WPS will send the salary file to the agent for payment, and the agent will then pay the employees. The system will also feed the labour ministry with the necessary data base and information of all salary and wage payments in the private sector to enable the ministry have credible information about wage and salary payment in that sector.
Ghobash said the system will revolutionise the regional labour market. "The WPS reflects the UAE's pioneering position in the region, and will increasingly project the country as a model worth emulating in the area of boosting the rights of workers. It is our ethical and legal responsibilities to always strive to come up with innovative means of implementing our leadership's policies which aim at providing secured and stable environment and at protecting the rights of all segments of the society," he added.
A dedicated WPS Office in the UAE Ministry will ensure that the process is functioning smoothly. The workers will not be subjected to any deductions or charges to get their salaries.
The decree gives deadlines for the various categories of business institutions in the country to fully comply with the new system. According to the decree, institutions with 100 and above employees have three months to comply fully with the new system with the deadline slated for the end of November. Institutions with 15 to 99 employees have six months to complete the process with the deadline for this category set at the end of February 2010, while institutions with 15 or less employees have their deadline set for May 31, 2010.
Shedding more light on the new system, Acting Director General at the UAE Labour Ministry, Humaid bin Deemas, said the WPS is aimed at entrenching transparency and competitiveness on the labour market and cited a number of positive aspects of the system, including saving of money, time and energy, boosting production and employee loyalty. He described the new system as "most appropriate", saying it will save both the employees and their employers the trouble of having to keep huge amount of money at their work places, which put those monies at high risk.
Bin Deemas said his outfit was highly committed to ensuring the full implementation of the new system and to working very closely with all concerned stakeholders in the system with the aim of reaching the best mechanism that would equally protect the interest of all parties.
He said even before the issuance of the new ministerial decree response to the WPS was very positive as the system transferred the wages of about 28,000 workers in June. He attributed the success to the good and hard work of the task force in charge of supervising the system. The task force is made up of two representatives from both the UAE Labour Ministry and the Central Bank.
Regarding penalties, the decree states that institutions which provided false information regarding the wage or salary of its employee will suffer consequences, including court action, in addition to denying that institution the right to have new working permit, which shall remain in force until after the court proceedings.
Any institutions which fail to transfer payment of its employee to the WPS on time will also have its working permit transactions blocked until several days later from the time it made the transfer of full payment of the wages.
A repetition of the two above violations will lead to a more punitive action against the violating institution, which shall forfeit the right to have new working permit until after one month of rectifying the violation. Repeating any violation for the third time will attract two months suspension of processing of new working permit for the violating institution, while a fourth violation will attract three months suspension until the violation is rectified.
The decree mandated the labour ministry to stop issuing new working permit to any institution which violated a complete unit of rules of the new decree and refer those responsible to court to face the consequences of incessant violation of the system. In this case, no working permit would be issued to the company or any of its subsidiaries, or other companies owned by the owner of the violating company, until after the court proceedings or after the errant company had rectified the violation, whichever comes first.
The decree abrogates Ministerial Decree no. 156 of 2003, which, among others, demands from institutions to produce auditor's certificate.
