DUBAI, UAE – The Ministry of Human Resources and Emiratization (MoHRE) of UAE announced on Tuesday that an ‘Unemployment Insurance Scheme’ for employees of the federal government and the private sector has come into force.
The Decree-Law on Unemployment Insurance Scheme stipulates that the insured will be compensated with a cash amount for a specific period of time if they lost their job until they find another employment opportunity, subject to terms and conditions.
The new system provides, “Social security scheme that ensures the sustainability of a decent life for Emiratis and resident employees during their unemployment period, while reducing business risks,” the ministry said.
“It also aims to enhance the competitiveness of UAE nationals, boost the attractiveness of the UAE’s job market for the best international and national talents and contribute to building a competitive knowledge-based economy that is among the best globally,” the ministry added.
The compensation will be paid monthly, calculated at 60 percent of the employee’s subscription salary and subject to a maximum of AED20,000 per month, for not more than three months from the date of their unemployment.
Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratization, said, “The decree reflects the government’s approach in developing the business environment and enhancing the UAE’s position as a preferred destination to work and live, which is confirmed by global indices.”
He said, “The UAE prioritizes preserving human dignity and this decree enhances the legislative environment to safeguard the rights of all employees in the country – Emiratis and residents alike and provides them with the best means of care at all levels.”
The minister said, “This contributes to enhancing the stability and prosperity of society, which is among the top priorities of our wise leadership.”
The terms and conditions of the new law apply to all employees in the federal government and the private sector in the UAE, except for investors (owners of the establishments in which they work), domestic helpers, part-time employees, juveniles under the age of 18, and retirees who receive a retirement pension and have joined a new job.
The law stipulates that to be eligible for compensation, the employee must have been insured for no less than 12 continuous months, calculated from the date of subscription in the insurance system.
In addition, the beneficiary shall not have been dismissed from their work for disciplinary reasons, as outlined in the provisions of the Law on Regulating Labor Relations and the Human Resources Law in the Federal Government and any relevant legislation in force.
The compensation claim should not be through fraud or deception.
If it is found that the establishment in which the employee works is not real, the penalties stipulated in the Law on Regulating Labor Relations and any other legislation in force in the country shall apply to the establishment as well as the insured.
Lastly, the compensation shall be suspended once the employee joins another job.
The insured may agree on additional benefits with the service providers – the insurance companies licensed by Central Bank of the UAE and fulfill the conditions for providing unemployment insurance, which are issued by the UAE Cabinet after consultations with the CBUAE.
Also, service providers may include other government entities assigned by the UAE Cabinet to provide unemployment insurance services.
The compensation to which the insured is entitled under this Decree-Law shall not influence any other compensation or entitlements outlined under any other legislation in force in the UAE.