UAE witnesses increase in the employment rate for 2014

The Ministry of Labour has announced that the labour market in the UAE has witnessed an increase in the employment rate during 2014 by about 10 percent compared to 2013, and the total number of labourers reached 4,417,000, a rate not seen in the market in 44 years.

Humaid Rashid bin Deemas Al Suwaidi , Assistant Under-Secretary of Labour Affairs, said, "The ministry has issued approximately 1,212,000 work permits over last year, which also witnessed the termination of work relations for about 821,000 labourers."

He also pointed out that the overall status of the labour market and its indicators during 2014 confirm the strength and growth of the national economy across its different sectors, especially if employment rates are considered to be a reflection of the requirements of development and the needs of economic sectors for employment, which during the same year witnessed significant mobility among private sector enterprises, especially highly skilled ones.

Al Suwaidi also referred to the fact that the construction sector tops the list of the three major employers, where the number of labours reached about 1,500,000, taking up about 34 percent of total employment.

The business sector followed with about 1,050,000 workers and 24 percent of total employment, then the industrial sector with about 500,000 workers and 12 percent. The three sectors combined account for about 70 percent of total employment in private sector establishments registered with the Ministry of Labour.

Al Suwaidi said that the health sector leads the list of the top three fast growing sectors in employment rates during the previous year by 25.4 percent of the total increase in the number of labourers joining the market during the same year. This is followed by real estate, leasing, and business services sectors by 18.6 percent, then comes hotels, restaurants, transportation, and storage sectors, which were relatively close at 12.3 percent.

Al Suwaidi considers the fact that the health sector leads the list of the fastest growing sectors in employment rates to be an indication of a trend towards a knowledge-based economy and the interest in promoting this sector, due to its significance as a service provider to nationals and residents in the UAE.

The Assistant Under-Secretary also explained that first and second class employment (in terms of skill level) recorded the highest percentage in terms of the increase in the number of workers by 14 percent, while third, fourth, and fifth class employment increased by 9 percent.

He said that the increase in first and second employment classes compared to the other three classes indicates that the labour market is heading towards attracting talent and expertise in specialised and technical professions. This only serves to reflect the need of the private sector for such profession that comes in the context of the focus of the national economy on productive employment, which in turn enhances the knowledge-based economy and the citizen as its focal point.

According to the classification adopted by the Ministry of Labour for employment, first class employment includes specialised occupations which require a high degree of scientific, technical, and executive skills and a university degree at a minimum. Second class employment includes technical occupations which require the availability of "cognitive, scientific and technical" abilities and practical and supervisory skills with a 2-3 years degree from an institute post high-school on average.

Third class employment in terms of skill level requires practical and technical skills that cover the entire scope of the job, and a high-school degree. While the fourth class employment skill level includes occupations which require the availability of practical and technical skills that cover part of the job and in this category individuals need to be prepared and trained for two years on average.

Fifth class employment is considered a limited skill category and includes occupations that require the availability of practical and technical skills related to a small part of the job and can be acquired during training in less than a year.

Al Suwaidi said that the labour market has witnessed significant mobility in the number of labourers who transferred to other facilities during this period after the implementation of the new transfer system in 2011, compared to the period before the implementation of the system. This confirms the positive reflection of the system on transfer flexibility and market stability in the context of the implementation of the Ministry's strategy of an integrated system of standards, policies, regulatory tools, institutional partnership and outstanding services.

Al Suwaidi also explained in this context that the total number of labourers who transferred to other facilities during 2011, before the implementation of the new transfer system, was 105,000 but these cases increased exponentially during the years following 2011 to reach 170,000 by the end of last year, a rate increase of 62.5 percent.

He also said that the rate of increase in the number of labourers listed under first and second class employment who transferred to other facilities during the previous year was 14 percent and the rate of increase in the third, fourth and fifth employment classes was about 7 percent.

The new transfer system is based on two basic requirements. If met, the labourer becomes eligible for a new work permit that immediately authorises him or her to transfer to another facility. First, both parties (employer-employee) must consent to the termination of the work relationship, and second, the employee must have spent at least two years at the previous workplace.

Cases of exemption from the first requirement include employees whose previous employers have violated the terms of their contract. As for exemption from the second requirement, it includes employees who wish to enrol in a first-class employment skill job with a minimum salary of Dh12,000, a second-class employment skill job with a minimum salary of Dh7,000 or a third class employment skill job of a minimum salary of Dh5,000.