The basic rules for working in the UAE

From the Australian publication "Business Spectator" 14 April '09
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The arrest and imprisonment without charge of several Australian businessmen working in Dubai should be the catalyst for shaking Australians out of their ignorance of Arab business culture.

It should help put an end to the stereotypical view that a job in the United Arab Emirates (UAE) as a ticket to a cushy, highly paid, tax-free position in a business environment not that different to home.

This distorted view of the UAE is perpetuated by recruitment consultants and by the custom of expatriates in senior positions hiring mates from the old boy's club.

Foreign Minister Stephen Smith highlighted the Australian ignorance of Arab culture in a recent interview on the ABC's Lateline. Smith was interviewed following his direct intervention in the cases of two Australians employed by the Dubai government-owned property company Nakheel. Matthew Joyce and Marcus Lee have been in jail since January.

The Minister said he is trying to upgrade the diplomatic relations between Australia and the UAE to reflect the increased commercial links and also see what can be done to inform Australians about the very different legal and judicial systems that apply in Muslim countries.

The travel advisory for UAE issued by the Department of Foreign Affairs and Trade has been recently updated to highlight that an individual can be arrested and held indefinitely without charge while an investigation proceeds.

Without commenting on the circumstances surrounding the cases involving Joyce and Lee, it is obvious from discussions with sources in the Gulf region that many expatriates have little or no sensitivity toward Arab culture or the requirements for working in the UAE.

A couple of anecdotes sum it up.

There was a swaggering American executive who was employed by a property company in the UAE, but after less than three months didn't like it and decided to change jobs. He was surprised to find that he should have asked permission of his employer before doing so. He walked out on his employer as a protest and was then banned from working in that country for 12 months.
Then there was the arrogant Englishman who parked illegally outside his place of employment in Dubai. When asked to move by an Arab man, the Englishman verbally abused him. The Arab man was very well-connected and the Englishman was out of the country within two days.
In the UAE the contractual relationship between the expatriate employee and a government-owned employer is very different to the contract of employment in Australia.

The employer is effectively the employee's sponsor. The employer's name appears on the employee's work visa. The employer takes responsibility for the actions of the employee and is liable for everything from personal debts to social behaviour.

Until an employee gets a visa they can't do anything. Without a visa an expatriate cannot open a bank account sign a lease, obtain a driver's licence, get a mobile phone or rent a car.
An employee cannot change employment without the certification of the current employer.
The fundamental principle that underpins all relationships for an expatriate in the UAE is employment. Residency is tied to employment.

In fact, an employee who is terminated has a legal obligation to immediately notify the bank. This is to give the bank the opportunity to freeze the employee's accounts and ensure that all debts are paid before departing the country.

Separate to the strict rules of employment and residency are the ways of doing business, which can be hard for an expatriate to get their mind around.

The Australian way of running property development projects with verbal decisions at board meetings backed up by legally recognised board minutes and letters of intent do not apply in emirates such as Dubai.

In Dubai, all contracts have to be agreed and signed before proceeding. Variations orders must be signed and received by the client before proceeding. However, it is believed this approach was overlooked during the boom times when 'speed' was the core value of the government owned development companies.

Government-owned companies in the UAE have very powerful internal audit functions that focus on written and signed contractual terms. These internal auditors are being called upon to ensure all existing contracts are properly approved.

The concept of an implied contract does not apply in the UAE. This is particularly the case at a time when those higher up the chain are searching for people to blame for cost overruns, project problems or looking for excuses to stop work.

As Stephen Smith told Lateline, the best advice for Australians planning to work in the UAE is prevention rather than cure – to be aware of the different cultures and the different systems, “and the need for Australians to respect the judicial and legal processes of another country.”