Workmen Compensation As Per UAE Labour Law

Workmen's compensation, as per the UAE labour law, plays a significant role in safeguarding employees' interests by providing financial support and medical assistance in the event of work-related injuries or illnesses. Understanding the importance of workmen's compensation not only ensures compliance with legal requirements but also demonstrates an organisation's commitment to employee welfare.

This article offers a comprehensive guide to workmen's compensation as per the UAE labour law, covering all the relevant aspects such as the legal framework, eligibility, benefits, inclusions, exclusions, and the factors affecting the insurance premium.

Legal Framework for Workmen's Compensation

The legal framework for workmen's compensation in the UAE is primarily based on the UAE Labour Law, specifically Federal Law No. 8 of 1980, which governs labour relations and outlines employers' and employees' rights and obligations.

The Ministry of Human Resources and Emiratisation (MOHRE) is the government body responsible for overseeing and enforcing the UAE Labour Law. It ensures that employers and employees comply with the law's provisions, including workmen's compensation.

The MOHRE also provides guidance, resolves disputes between employers and employees, and imposes penalties in case of non-compliance. In the context of workmen's compensation, the MOHRE's role includes facilitating dispute resolutions, monitoring employer compliance, and promoting a safe and supportive work environment.

Let’s understand the workmen's compensation as per UAE labour law - Federal Law No. 8 of 1980:

This law provides comprehensive regulations regarding employment contracts, working hours, wages, leaves, termination, and workmen's compensation, among other aspects of labour relations. It ensures the protection of employees' rights and sets forth the requirements and responsibilities of employers in case of work-related injuries, illnesses, or disabilities.

Several articles within the UAE Labour Law address workmen's compensation, with the most relevant provisions being:

Article 144: Specifies the employer's responsibility to pay for medical expenses incurred by the employee in case of occupational injuries or diseases
Article 145: If an employee cannot perform their duties due to work-related illness, injury, or disease, the employer is obligated to pay them an allowance equal to their full salary for the entire duration of their treatment or for a period of six months (whichever is shorter). If the recovery period extends beyond six months, the allowance will be reduced to half for the subsequent six months or until the employee fully recovers, is declared disabled, or passes away (whichever happens first).
Article 146: Describes the compensation that an employer must provide in case of permanent total or partial disability resulting from a work-related injury or disease.

What is Workmen's Comp. Insurance as per UAE Labour Law?

Workmen's Compensation Insurance, as per the UAE labour law, is a policy that employers can get to cover their financial obligations and liabilities arising from work-related injuries or occupational diseases sustained by their employees. This type of insurance helps employers comply with the legal requirements of Federal Law No. 8 of 1980, which governs labour relations in the UAE.

Apart from the legal requirement, having workmen's compensation insurance also shows an employer's commitment to employee welfare and helps create a safe and supportive work environment.

Generally, workmen's compensation insurance covers medical expenses, lost wages, and, in some cases, disability benefits or death benefits for the employee's family to ensure that employees can receive adequate support during their recovery.

With the help of workmen's compensation insurance, employers can transfer the risk of financial losses resulting from work-related accidents to the insurance provider, thus providing financial protection to their business.

Inclusions and Exclusions of Workmen Compensation Insurance

Inclusions
Exclusions

Let’s take a look at the prominent inclusions of workmen's compensation insurance as per labour law:

> Work-Related Death: Compensation is limited to 24 months' wages, with a minimum amount of AED 18,000 and a maximum of AED 35,000.

> Permanent Total Disability: If an employee cannot perform their duty due to work-related injury for a period exceeding 12 months, the compensation shall be equal to the amount payable. Some examples of permanent total disability include loss of both arms, loss of eyes, complete paralysis, and more.'

> Permanent Partial Disability: Permanent Partial Disability (PPD) occurs when an employee has a lasting impairment from a work-related injury or illness but can still work with limitations. Compensation is a percentage of the death benefit, depending on the injury. Examples include losing a finger or an eye.

> Temporary Total Disability: Temporary Total Disability (TTD) is when an employee can't work due to a work-related injury or illness but is expected to recover. Employers must pay full wages for 6 months, then half wages for the next 6 months or until the employee recovers, is declared disabled, or dies.

> Medical Expenses: Workmen's compensation insurance also includes medical expenses for treatment of occupational injury or diseases - this may include expenses such as diagnostic tests, x-rays, medicines, rehabilitation equipment, and so on. The cover is provided with a specified amount per person per accident.

> Repatriation Expenses: Repatriation expenses refer to the costs incurred in returning an employee to their home country following a work-related injury, illness, or, in unfortunate cases, death. Under this, the cover is provided to a specified amount per person, like AED 10,000 – AED 25,000 per person.

Listed below are some key exclusions of workmen's compensation insurance:

> Injuries that are intentionally self-inflicted by the employee, such as suicide attempts or deliberate self-harm

> If the employee's injury or illness is a result of being under the influence of alcohol or drugs (excluding those prescribed by a doctor).

> If an employee is injured while violating company policies, safety regulations, or applicable laws

> Injuries or illnesses that occur outside the employee's designated working hours or outside the workplace premises

> Workmen's compensation insurance generally does not cover pre-existing conditions or illnesses unless the work-related injury or illness has exacerbated the pre-existing condition.

> Injuries incurred during non-work-related activities such as sports or hobbies

> Injuries or illnesses resulting from acts of war, terrorism, or civil unrest may be excluded from coverage.

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Workers Compensation Insurance

Add-Ons of Workmen Compensation Insurance

Add-ons in workmen's compensation insurance are additional coverages that can be included in a policy to enhance the protection provided to employees. These add-ons can help address specific needs and risks that may not be covered under a standard policy.

Here are some common add-ons for workmen's compensation insurance –

Employer’s Liability

In cases where an employee's injury or death is caused by the employer's negligence, public prosecutors or the deceased employee's family may pursue legal action against the employer for wrongful death or injury. In these situations, a court may award damages that exceed the AED 35,000 maximum coverage provided under the basic workmen compensation (WC) death benefit.

Employer's liability coverage is an add-on to the workmen's compensation insurance policy that protects employers against such court-awarded damages and associated legal defence costs up to the limit specified in the policy.

These limits typically start at AED 500,000 for any single occurrence or for a total of multiple occurrences during the policy period. By including employer's liability coverage in their insurance policy, employers can safeguard their business from the financial burden of potential lawsuits and ensure compliance with legal obligations in cases of work-related injuries or deaths caused by their negligence.

24-Hours Personal Accident Cover

This add-on extends the coverage to provide protection to employees for accidents occurring outside the regular working hours and premises. This coverage typically provides compensation for medical expenses, temporary or permanent disability, and death benefits to the employee's family in the event of a fatality. However, the specific terms and conditions of the 24-hour personal accident cover, including the coverage limits and exclusions, may vary depending on the insurance provider and policy.

Transportation Cover

It provides additional protection to employees during their commute to and from their workplace. This extension of coverage addresses the risks associated with transportation, such as accidents, injuries, or fatalities that may occur while employees are travelling to or from work.

Factors Affecting Workmen Compensation Insurance Premium

Some of the key factors affecting workmen's compensation insurance as per labour law premiums include -

Industry and Nature Of Work: The type of industry and the specific tasks performed by employees impact the premium, as industries with higher risk levels, such as construction or manufacturing, typically have higher premium rates due to the increased likelihood of accidents and injuries.
Number of Employees: The total number of employees to be covered under the policy can affect the premium, as a larger workforce may result in a higher overall premium.
Employee Classification and Wages: Different job roles have different risk levels, which can lead to variations in premium rates. Moreover, the total payroll or wages of the employees also affects the premium, as compensation is typically based on a percentage of the employee's wages.
Workplace Safety Measures: Implementing safety measures, training programs, and risk management practices in the workplace can help reduce the risk of accidents and injuries, potentially leading to lower premium rates.
Coverage Limits and Add-Ons: The extent of coverage provided by the policy, including coverage limits and any additional add-ons, can also affect the premium rates. Higher coverage limits and additional add-ons typically result in higher premiums.
Claims History: The employer's past claims history can influence the premium, as a higher number of claims may indicate a higher risk level, which may lead to higher premium rates.
Policy Term: The duration of the policy can also have an impact on the workmen's compensation insurance premium. In general, the longer the policy term, the more the total premium amount will be since the coverage is provided for a more extended period.

How to Apply for Workmen Compensation Insurance in UAE?

You can easily apply for workmen's compensation insurance via Policybazaar.ae. It is an online platform through which you can apply for insurance and banking products in just a few clicks and find the best plans from the leading providers.

Follow the given steps to apply for workmen's compensation insurance via Policybazaar.ae –

Visit the official website of Policybazaar UAE.
Tap on the ‘Business Insurance’ icon on the home page.
Click on 'Workmen Compensation Insurance' and fill out the lead form.
The lead form may require details like your company's name, your name, email address, contact number, and more.
Hit the 'View Quotes' button, and one of our concerned customer representatives will contact you and help you find the most suitable plan as per your requirements.

Alternatively, you can call our customer care number to get more deets on workmen's compensation insurance.

Refer to the next section of the article ‘Frequently Asked Questions’ to learn more about Workmen's Compensation per UAE labour law.

Frequently Asked Questions (FAQs)

A standard workmen compensation insurance policy in the UAE typically covers medical expenses, wage replacement for temporary or permanent disability, and death benefits for the employee's family in case of a work-related injury, illness, or fatality.

Yes, employers can choose from various add-ons to extend their workmen's compensation insurance coverage. Some popular add-ons include employers' liability, transportation cover, and 24-hour personal accident cover.

Compensation amounts are calculated based on factors such as the nature and severity of the injury or illness, the employee's pre-injury wages, the duration of the disability, and the applicable laws and regulations in the UAE.

The MOHRE plays a crucial role in regulating and overseeing workmen's compensation in the UAE. It ensures that employers comply with the UAE Labour Law, provides guidelines for compensation calculations and requirements, and helps resolve disputes between employers and employees related to workmen compensation claims.

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