More power to employees under new UAE labour laws, but not enough

A new law that makes it easier for skilled expat workers to switch between jobs in the UAE has been broadly welcomed as a step forward in liberalising the emirate's labour market. But does it go far enough?

The 'Free Transfer Law', which came into effect in January, has essentially shaken up employers' powers over 'no objection certificates' (NOCs) for skilled workers.

Previously, if expat workers wanted to switch jobs before serving three years in their current role, they'd need their employer to sign an NOC, or face a six month ban from working in the UAE. They even had to obtain an NOC if they left their job through no fault of their own; through redundancy, for example.

Now, they can sidestep the need for an NOC if they've served two years, and are leaving by 'mutual consent', which largely means seeing out a notice period and that you haven't been fired for gross misconduct.

Inevitably, NOCs have previously been used by an employer as a way of preventing employees for working in for a competitor organisation in the UAE.

The UAE still lags behind some relaxation of visa laws in other GCC states, so the shake-up was a response to growing scrutiny and criticism, suggests says Neil Crossley, partner in the employment practice at law firm DLA Piper in Dubai.

"The new Free Transfer Law addresses many of these concerns by allowing employees greater flexibility in changing jobs and prevents unscrupulous employers from withholding NOCs arbitrarily," he says.

Bankers still reluctant to move

However, this has been less of an issue in the financial sector, as the majority of expats are usually employed in the freezone of the DIFC, where UAE labour laws don't apply - hence the prolific job hopping during the boom years of 2007-08. However, regional banks operating elsewhere in the emirate could face more of a challenge keeping hold of their foreign workforce.

So far, though, most recruiters in the UAE are reporting few signs of more expat talent looking for pastures new and suggest that the new law doesn't go far enough in liberalising the employment market if the region wants to attract top banking talent.

"NOCs can still be a sticking point - if people haven't served two years and think their employer could withhold it, it impacts the mentality of their job search and makes them more non-committal," says Jonathan Gould, manager, financial services at Morgan McKinley in Dubai. "But really, firms need to think of more innovative ways of retaining expat employees rather than the sponsorship system in if the labour market is really going to mature here."