Labour ministry to crack down on bogus firms

DUBAI — The Labour Ministry will ban companies, which have no business transactions and were basically created to trade in visas and also slap a one-year ban on employees of such 'bogus' firms who fail to report on the dubious nature of their employers within a maximum period of three months, a senior official has disclosed.

By A Staff Reporter

Published: Sat 19 Aug 2006, 9:28 AM

Last updated: Sat 4 Apr 2015, 6:14 PM

The ban includes no issue of new work permits, cancellation of work permits already issued and not processing any other transactions the offending companies may apply for finalising, Humaid bin Demas, Assistant Undersecretary of the Ministry, noted. He termed the penalty as strictest punishment served on such type of companies flouting the law. All affiliated establishments of these erring firms will be blacklisted as well, he added with emphasis. Blacklisting all the establishments of the erring sponsor is the most effective way to combat the menace of visa scam and rackets, he said.

The ministry will not deal with the sponsor who is found to have bogus establishment, and any person who applies for the setting up of a new establishment will not be allowed or issued a permit unless he rectifies the irregularities and the status of his employees, Bin Demas explained.

He further revealed that as many as 50,000 establishments found to be either bogus or insolvent are operating on expired licences. A staggering 80 per cent of these companies are virtually non-functional with most of their employees having already left the country for good, he said.

Most of the expired licenses belong to insolvent, fictitious establishments or companies basically created to trade in visas, he pointed out. Labour cards of their employees were not renewed by insolvent companies, he said. All this has resulted in a large number of employees found to be breaching the law,

He, however, admitted that the number of jobless workers is rising dramatically. Ninety per cent of the expired work permits belong to unemployed workers. One could say that jobless workers are holding all these expired work permits.

He warned regarding the serious consequences of leaving the expatriate workers without jobs after bringing them into the country. Such offences would have adverse effects at all levels, affecting maintenance of public order and security.

The agencies and bodies concerned have noticed that many problems were created by these floating workers, who know that their establishments are fictitious, but remain jobless with the hope of remaining as long a time as possible in the UAE with the aim of getting a genuine job opportunity and until then would turn to working illegally.

Bin Demas called on the private companies to adhere to the laws saying that when the expatriate employee is brought into the country, he is hired to work through an official and legal residency visa. Therefore work is the objective that substantiates his legal stay in the country and not staying in the country unemployed or violating the law.

The official called on all employees who enter the country to report against such visa racketeers. The present procedures have paid off and yielded fruit, he said citing an example of 200,000 establishments found to be active and in compliance with the rules set by the Ministry.

He also spoke at length on the online procedures for finalising companies' transactions. The ministry had provided many facilities such as renewal of labour cards, which has become very easy and is done in a short time, he recalled.

The applicant can apply for renewal of labour card online, and at the typing offices in which the filling in of the application form takes only five minutes without need to approach the ministry.

He, however, called on the sponsors to rectify the status of their establishments and not to leave offending employees at large. Trading in visas or opening new establishments to trade in the same will be strictly dealt with when reported, he warned

The Ministry will carry out inspections on companies, and in case fictitious firms were found the Ministry will not hesitate in enforcing all the penalties stated in the law. Both the erring establishment and the employee will be penalised, he added.

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