ILO Evaluates UAE Labour Policies to Boost Competitiveness
The ILO’s assessment reflects the UAE's ongoing efforts to modernise its labour framework as part of broader economic reforms aimed at improving the nation’s global competitiveness. Central to this review is the ILO’s focus on the introduction of new laws and regulations that affect expatriates, the primary workforce demographic in the UAE. The country’s large migrant worker base has historically faced challenges related to labour rights, wages, and working conditions, which have drawn significant international scrutiny.
Among the most notable recent reforms is the implementation of the new Labour Law in 2022, which introduced key changes, such as the abolition of the sponsorship (kafala) system, a move seen as critical in improving worker mobility. This reform allows foreign workers greater freedom to switch jobs and employers without needing permission from their previous sponsors. Another significant development is the introduction of new laws that regulate temporary and part-time work, which are seen as important for diversifying the workforce and increasing flexibility in the labour market.
The ILO’s report also highlights the efforts made by the UAE to strengthen worker protections, including the establishment of wage protection systems, improvements in accommodation standards, and increased penalties for employer non-compliance with the new regulations. While these changes mark substantial progress, the report suggests there are still areas that require further improvement, particularly in the enforcement of these laws and the provision of social protections for low-income workers.
Another focus of the ILO’s assessment was the UAE’s push to improve the welfare of its national workforce. Emiratisation, or the policy aimed at increasing the employment of UAE nationals in the private sector, has been a central pillar of the government’s labour policy. The ILO’s evaluation notes that while significant strides have been made in increasing the proportion of Emiratis in various sectors, challenges remain in overcoming barriers such as skill gaps, workplace culture, and competition from expatriate labour. These factors have made it difficult for Emiratis to secure jobs in sectors traditionally dominated by foreign workers.
The review also examined the UAE’s efforts to maintain economic resilience in light of global challenges, including fluctuating oil prices, the COVID-19 pandemic, and the rise of automation. In particular, the ILO commended the UAE for its ability to adapt swiftly to the changing global landscape. Policies aimed at diversifying the economy, such as those that promote digital innovation, green technologies, and entrepreneurship, are seen as essential in preparing the workforce for the future.
Another key element discussed in the ILO’s report is the UAE’s commitment to enhancing its legal and regulatory frameworks to promote gender equality in the workplace. The country has made significant strides in recent years, with more women entering the workforce and holding positions of leadership. The ILO's review acknowledges the improvements but also calls for continued action in ensuring equal pay, representation, and protection from discrimination for female workers.
The labour market reforms introduced by the UAE have also been praised for their alignment with the country’s Vision 2030 plan, which focuses on developing a diversified, competitive economy while ensuring social stability. As the UAE continues to implement these reforms, experts believe that the labour market will play an increasingly pivotal role in the nation’s long-term economic success.
However, the ILO’s report does not overlook the challenges that still exist. Despite the significant progress made in the labour sector, migrant workers in the UAE continue to face challenges, especially in terms of their treatment by some employers and the adequacy of their living conditions. Human rights organisations have raised concerns about the continued exploitation of low-paid foreign workers, particularly in construction, domestic work, and the service sector. The ILO’s review recommends that the UAE continues to address these issues by strengthening its labour inspection systems and offering more robust legal support to workers who experience exploitation or abuse.
The findings of the ILO are significant not just for the UAE but also for the broader Gulf region, where similar labour market challenges persist. As the UAE strives to position itself as a regional leader in labour market reform, its experience will be closely monitored by other countries in the Gulf Cooperation Council (GCC), which have been facing similar pressures related to workforce diversification, improving worker rights, and balancing economic competitiveness with social justice.
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