GCC IMMIGRATION & EMPLOYMENT ROUND UP - APRIL 2018 - PWC

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PwC Middle East

GCC Immigration & Employment Round Up
April 2018

In brief
Employment law continues to remain a hot topic across the GCC with 2018 already seeing a raft of
new developments, updates and/or changes to the existing legal landscape. Both the UAE and the KSA
remain the dominant and continued change-makers in this sphere.

In detail

United Arab Emirates

The DIFC Employment Law (the “Law”) is currently the subject of a consultation paper which has
proposed a number of significant changes. The DIFC stands as a unique financial free zone in the UAE
in that it is a common law jurisdiction subject to its own legal framework and rules, largely
independent of those applicable to companies operating outside its zone (and which follows a civil law
jurisdiction). The consultation paper – which closed for public comment on 22 March 2018 –
proposes changes which are increasingly more in line with employment laws and protections in the
UK, including an express concept of constructive unfair dismissal, expansion of the “protected
grounds” for discrimination to include age, pregnancy and maternity, remedies and financial penalties
for breach of the Law, whistleblowing protections, recognition of alternative employment structures
(e.g. part-time working and secondment arrangements) and a widening of the territorial reach of the
Law itself. The new Law is intended to come into effect during the summer of 2018.

In keeping with a growing trend of ensuring gender parity within the workplace, the UAE Cabinet
recently approved a draft law on equal wages and salaries for men and women. The draft law – which
has not been published – still needs to be approved at the federal level before it is enacted into law.
Gender equality and parity is a key agenda item for the UAE government. In 2015 the UAE set up the
world-first Gender Balance Council tasked with improving gender imbalance within the workplace,
and last year issued a Gender Balance Guide which provides guidance to employers on practical ways
of creating a gender equal workplace.

Finally, the Ministry of Human Resources and Emiratisation (the “MOHRE”) recently enacted a new
rule permitting eligible employees to take on one or more part-time jobs. A previous system of
part-time work permits existed since 2011 but was rarely utilised on account of the employee
requirement to procure and obtain permission (in the form of a No Objection Certificate “NOC”) from
their first/original employer. The new system has abolished the requirement for a NOC. Generally
therefore, eligible employees have the ability to commence work with a competitor employer in the
UAE (albeit, the MOHRE will notify as part of its pre-approval process all other employers when it
issues the part-time work permit; and the employee himself also has an obligation to inform all such
employers if he takes up another part-time role). Eligible employees include those based in the UAE
and who are classified as “skilled workers” (that is, those who hold have a job title that requires a
university degree certificate or above on their Employment Residence Permit or anyone with a
diploma in any technical or scientific field). The original or first employer still retains ultimate
responsibility for the employee’s salary and other legal/contractual entitlements, with the
second/other part-time employer not shouldering such responsibilities. Certain other requirements
apply to this new rule including hours of work, the type of contract to be executed between the parties

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and the provision of any agreed upon benefits between the employee and the second/other part-time
employer.

In light of the new Law and the removal of the NOC requirement, we recommend that companies:

    (a) undertake an audit check of, and ensure employment contractual documentation include,
        clear and express confidentiality obligations, duties to disclose third party engagement and
        conflicts of interest, and properly reflect working arrangements (including a review of which
        contracts might trigger the option of part-time working).

    (b) introduce a comprehensive part-time working policy.

    (c) put in place structures to restrict employee access to company confidential information.

Saudi Arabia

High on the KSA government agenda and part of its overarching 2030 Vision strategy remains its
Saudization programme, with increasing rules being put into place to ensure Saudi nationals are being
appropriately and adequately staffed in the private sector. The KSA Ministry of Labour has introduced
additional Saudization rules, prohibiting expatriate employment in 12 additional industry
sectors/work areas which are listed below. The prohibition will operate on a phased basis, from
September 2018 onwards.

                      Sector                                    Implementation date

 Automobile and mobile shops                        11 September 2018

 Shop selling home furniture and ready-made         11 September 2018
 office materials

 Sale outlets of ready-made garments                11 September 2018

 Children clothes and men’s supplies                11 September 2018

 Watch shops                                        9 November 2018

 Optical stores                                     9 November 2018

 Electrical and electronics shops                   9 November 2018

 Medical equipment stores                           7 January 2019

 Outlets selling car spare parts                    7 January 2019

 Building material shops                            7 January 2019

 Outlets selling all types of carpets               7 January 2019

 Household utensils shops and pastry shops          7 January 2019

In addition, the KSA authorities had previously confirmed that effective 1 April 2018, they would begin
issuing tourist visas to nationals of select countries, as part of an increased drive to promote its
tourism sector and position itself as a leading Middle Eastern hub for foreign trade and investment.

At current time, no such visas have yet been issued and it remains to be seen when this initiative will
be fully implemented by the KSA authorities.

Qatar

The Qatari government has introduced, as a means of facilitating greater and swifter access to justice,
a law which seeks to establish a new labour dispute resolution committee (the “LDRC”), which is
intended to simplify employment disputes (whether arising under the Qatar Labour Law or the
employment contract) to the confines of a more specialised and bespoke body and reduce the
time-frames for overall employment dispute resolution. It is unclear yet when the LDRC will be
formed but the new law mandates, in the context of employment disputes, the utilization of the LDRC
as part of the overall pre-court process.

As of 24 April 2018, citizens of 33 approved countries may apply for a joint tourist visa, which allows
them to travel freely between Qatar and Oman. It is issued upon arrival at the airport or border of
Qatar for one month and can be extended for another month. Travellers may apply online for the visa
ahead of time. ​If the visa is granted by Oman, the foreigner must complete the application form with a
stamp on his passport in a form that will allow him to enter Qatar. The visa fee is free of charge if
coming from Qatar provided that there is a seal indicating that it is a joint visa. A sum of OMR 20 will
be charged if the joint visa is granted from Oman, and QR 100 if issued from Qatar. ​The approved
countries eligible for this joint tourist visa are Australia, Austria, Andorra, Brunei, Belgium, Canada,
Denmark, France, Finland, Germany, Greece, Hong Kong, Iceland, Ireland, Italy, Japan,
Liechtenstein, Luxembourg, Malaysia, Monaco, Malaysia, New Zealand, Norway, The Netherlands,
Portugal, San Marino, Spain, South Korea, Singapore, Switzerland, Sweden, United States and United
Kingdom.

Kuwait

The Kuwaiti government has amended the Kuwaiti Labour Law to clarify employee entitlements to
annual leave and pension contributions.

In particular, the amended Law now expressly provides that:

    (a) weekends, public holidays, and sick leave days shall not be counted as part of an employee’s
        30 day annual leave entitlement. The entitlement to such annual leave is contingent upon the
        employee having completed at least six months of service with his employer.

    (b) upon termination, an employee is entitled to a full end-of-service indemnity without
        deductions for the contributions the employer made towards the Public Institution for Social
        Security (PIFSS). It used to be the case that some employers would deduct the amount that
        they had contributed towards social security from their employees' end-of-service payout.

The Kuwaiti authorities have also recently introduced a ban on recruiting nationals from Bangladesh.
The decision to ban Bangladeshi workers is believed to be attributable to irregularities and abuses by
traffickers in work and residency permits for Bangladeshis whose numbers have increased remarkably
following the recent lifting of a ban on their recruitment. The abuses were mainly related to the
employment of domestic helpers despite the existence of strict regulations. The number of
Bangladeshis in Kuwait in 2016 stood at 200,000. The new ban will not affect renewal applications
for Bangladeshi nationals already living in Kuwait.

Furthermore, it has recently been announced by Kuwaiti Ministry of Health that expats in Kuwait
suffering from 22 non-contagious illnesses such as cancer, diabetes, high blood pressure, kidney
failure, and vision/eyesight problems will no longer have the eligibility to obtain a residency visa due
to an increase in pressure on the healthcare industry in Kuwait. The purpose of this recent directive is
to address the imbalanced healthcare costs on expatriates residing in Kuwait. The implementation
date of this rule is not yet clear nor has it been confirmed whether the rule will apply to expats already
working in Kuwait or whether it is aimed solely at new arrivals.

Oman

As of 21 March 2018 expatriates are now required to procure an e-visa prior to their travel to Oman.
Although, as of now, the new airport at Oman has a counter which has been providing the visa on
arrival facility; it has now been confirmed that soon this option will no longer be available. As per the
announcement, it has been made clear that the “on arrival” counter will not be permanent at the New
Muscat International Airport and expats will need to plan well in advance for their trips to Oman. The
counter is expected to be open until the e-visa issue (system glitches) has been resolved and the
applications are getting through smoothly. Business travellers going to Oman need to be mindful
when scheduling meetings on short notice.

Other developments in Oman also include a new labour market test for those employers operating in
the oil and gas sector. Relevantly, employers in Oman will soon require pre-approval from the
Ministry of Oil and Gas before filing labour clearance requests at the Ministry of Manpower to hire
expatriates in the oil and gas sector. The effective date of this new rule has not been announced. Those
companies recruiting foreign workers in the oil and gas sector, including contractors, operators and
service providers, will have to complete the following new steps prior to submitting a labour clearance
request to the Ministry of Manpower:

    (a) advertise job vacancies for between 1-2 weeks in local newspapers, on company websites or in
        specialised job portals in the oil and gas sector.

    (b) provide proof of received job applications and interviews conducted, indicating suitable talent
        was not secured for the position.

Following the above steps, the Ministry of Oil and Gas will review the pre-approval application and
issue a decision. The timing and specific processes/procedures in this regard have yet to be clarified.
According to the Ministry of Oil and Gas announcement, the new requirement will initially apply only
to new labour clearance applications; that being said, it is likely that it will later apply to renewal
applications as well.

The takeaway

Changes to the immigration and employment laws across the GCC countries are likely to
continue. The various GCC governments will seek to develop, open and expand their economies
(moving away from being oil dependent) and cater to the globalised nature of doing business
and the increasing need to adopt, and adapt to, international best practice standards in the
employment context. We will continue to monitor these changes and inform you of any
developments.

PwC Middle East Tax and Legal contacts
Dean Kern​, Dubai                          Jonathan Gibson​, Dubai                                Anir Chatterji, ​Dubai
Middle East Tax and Legal                  Middle East Legal Services Leader                      Senior Manager
Services Leader                            T:+971 (0) 4 304 3424                                  T:+971 (0) 4 304 3922
T: +971 (0) 4 304 3575                     E:​jonathan.s.gibson@pwc.com                           E: ​anir.chatterji@pwc.com
E: ​dean.kern@pwc.com

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