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UAE expats and citizens alike will be eligible to receive unemployment insurance, a new scheme that aims to protect employees against the risk of job loss.
During a media briefing on Thursday, Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, confirmed that employees who lose their jobs under unforeseen circumstances will receive cash support. The scheme will provide up to 60 per cent of their basic salaries every month for a limited period until they find an alternative.
The mandatory scheme, effective from early 2023, applies to employees of all nationalities in the public and private sectors. Al Awar said, "The new insurance scheme aims to ensure stability in the labour market and encourage more Emiratis to enter the private sector."
It is part of the latest sweeping reforms in the UAE that aim to attract and retain talents, as well as enhance the competitiveness of the country's labour market.
However, investors, domestic workers, employees working under temporary contracts, juveniles under the age of 18, and retirees with pensions or new job opportunities will not qualify for the policy.
Employees will be able to apply for different annual packages through insurance companies to secure themselves against a potential job loss.
The redundancy payment will enable insured workers who suddenly lose their jobs to retrieve 60 per cent of their basic salaries with a maximum amount of Dh20,000 per month.
Al Awar stressed that the mandatory insurance package will cost workers an amount that ranges from Dh40 to Dh100 annually.
However, employees have the option to apply for higher insurance packages.
“Insurance packages will be created to accommodate different range of salaries and match everyone's financial capability. This means that employees with lower salaries can sign up for packages that accommodate their income.”
Al Awar added, “We will not create a system that will add to the financial burden of the employees. The scheme is only designed to provide a safety net for everyone who works in the UAE.”
If the terminated employee did not find another job after a period of time, the cash support will be cut off, noted Al Awar, without specifying the time-frame within which the support will last.
However, employees will be provided with insurance plans that help them financially secure themselves for a longer time.
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Employees can avail the scheme through insurance providers as authorities aim to avoid imposing additional expenses on employers.
“Receiving the support for a specific period encourages employees to stay in the country and remain on the lookout for new opportunities,” added Al Awar.
The ministry will oversee the system’s implementation after legislation that will regulate and detail the scheme are put in place. The legal system will govern the relationship between the insurer and the insurance company.
It falls under the country’s efforts to increase the labour market’s flexibility. "The country is providing a basic benefit to workers, giving them the flexibility to obtain additional benefits from the employers."
“The UAE’s work environment is known for attracting talents from all over the world. This scheme complements the country’s latest legislative reforms, including the new Labour Law, that aims to establish an agile labour market,” said Al Awar.
sherouk@khaleejtimes.com
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