Early this year, the employment legislations in the country were reshaped. What is listed below is what needs to be known about the main articles of the UAE’s new labour law…
In line with the UAE leadership’s vision to enhance employment rights, attract talent to the country and boost the country’s competitiveness in the global market, the Ministry of Human Resources and Emiratisation has amended the UAE Federal Law No 8 of 1980. These amendments has brought significant changes concerning discrimination laws, termination of employment, ‘non-compete’ clauses and more…
New labour law explained
UAE Federal Law No 8 of 1980 (as amended) (the “Old Law”) was repealed in its entirety on the 2nd of February 2022 and it was replaced with a new Federal Decree Law No 33 of 2021 (the “New Law”) and supplemented by Cabinet Resolution No 1 of 2022 (the “Executive Regulations”). This is the first major change in the UAE labour laws in over 40 years, aligning the UAE with other global labour laws and practices. This new law applies to onshore UAE companies and all non-financial free zones.
Changes to the probationary period
Despite the changes in the law, the maximum six-month probationary period remains. However, employers must give 14 days’ notice to dismiss instead of the previous 7 days.
Meanwhile, employees must also give:
- A 14-day notice to resign if the employee is leaving the UAE
- One month’s notice is required if the employee is leaving to join another employer in the UAE
Changes to the recruitment and employment contracts
In terms of employment contracts, all employees must be employed on a fixed-term employment contract, not exceeding three years in length.
The requirements for the MOHRE/free zone contract remain. However, changes can now be made to the approved template contract and different forms existing depending on the type of visa/work model. The new law looks at new models of work including:
- part-time, for one or more employers
- remote working
- job sharing
Non-compete clauses can be used and can last up to two years in length. The law sets out the circumstances in which post-termination restrictions will be unenforceable including; for example, where will the employer terminate the employment in breach of its legal obligations due to the employee.
Restrictive covenants can be set aside where any of the following occur:
- The parties’ written agreement.
- The new employer or the employee pays up to three months’ compensation to the old employer (subject to the old employer providing their written consent).
- The employee is terminated during their probationary period; or as may be deemed appropriate considering labour market needs.
Employers with 50+ employees must have in place:
- A grievances policy
- A disciplinary sanctions policy
Rates of overtime pay are unaffected, except that the enhanced premium for night work now only applies for hours between 10 pm and 4 am.
Payment of salary
Employees may be paid in currencies other than AED by agreement between the employer and the employee.
Maternity leave and maternity pay
Maternity leave entitlement has been increased to 45 days at 100 per cent pay; plus 15 days at 50 per cent pay.
There is now no minimum qualifying service requirement. This maternity leave is now available to women who suffer from a miscarriage or stillbirth after six months of pregnancy.
An additional 45 days’ unpaid leave is available where the employee suffers from a pregnancy-related illness, and an additional 30 days’ paid leave and 30 days’ unpaid leave is available where the employee’s child has a disability.
Study and compassionate leave
Employees with more than two years’ service are entitled to ten days leave per year to sit for exams. To be eligible, the employee must be studying at a government-approved UAE educational institution.
- Death of a spouse – five days’ leave
- Death of parent, child, sibling, grandchild or grandparent – three days leave
Termination of employment
Dismissal on notice
Employees can be dismissed for any legitimate reason. The expiration of a fixed-term contract is a valid reason for dismissal.
Employees on fixed-term contracts can now be dismissed on notice as normal, with no additional compensation being payable.
Victimisation – where an employee is dismissed for filing a complaint against the employer – is unlawful.
The minimum notice period of 30 days continues. However, a maximum of 90 days notice period has been introduced. For employees leaving while still employed on unlimited term contracts, minimum notice periods apply:
- 30 days for employees with up to five years
- 60 days for employees with between five and 10 years’ service
- 90 days for employees with 10 years’ service or more.
The exhaustive list set out under the Old Labour Law has been maintained, with two further additions:
- Abusing position to obtain personal gains and profits
- Joining another establishment without complying with controls and procedures in place
End-of-service gratuity “ESG”
Employees summarily dismissed now retain their entitlement to ESG, and no reductions apply where an employee resigns. Payment of ESG, together with all other termination payments, must be made within 14 days of the termination date.
Express protections against sexual harassment, bullying and any verbal, physical or psychological violence against employees have been introduced.
Specific protections have been introduced for employees, meaning that they cannot be discriminated against based on:
- Skin colour
- National origin
- Social origin
Positive discrimination in favour of Emiratis is an exempted category.
The UAE courts are now able to levy fines against employers for breaches of the Labour Law. Fines can be doubled by the court for repetition of violations. Fine ranges are:
- AED 20,000-AED 100,000 for providing false information to recruit an expatriate employee
- AED 50,000-AED 200,000 for illegally employing an individual or recruiting an employee without having work to provide
- AED 5,000-AED 1,000,000 for any violation of the UAE Labour Law.