In order to safeguard the rights of the workers employed in the private sector companies and firms within the setting after the COVID-19 pandemic, the UAE government announced a decree-law last year. It is crucial for people working in the UAE to learn about the rules, regulations, and laws of the labours. Because they provide tons of perks to employers. These perks include exemption of legal fees, paternity leave, and more. The government of the Emirates made certain changes in the existing Labour Law and made it a new one altogether. Read on to find out about New Labour LAW UAE including the introduced changes to the old law in 2022.
New Labour Law UAE 2022 – Explained in Detail
In the new Labour Law introduced in February 2022, Discrimination is addressed, and new rules about flexible working & employment types and new leave types are added. Employees of the public and private sectors will benefit a lot from the new rules introduced in the Labour Law UAE.
The impact of the New UAE Labor Law is explained and details are added by the Executive Regulations from the Ministry of Human Resources and Emiratisation of the UAE (MOHRE).
HM Sheikh Mohamed, Dubai’s ruler and the UAE’s Vice President and Prime Minister, on October 7th, 2022 got rid of the three-year cap on the total time of fixed-term employment contracts in the private sector. According to the changes made in the law, employment contracts must cover a set term, agreed on by an employee and employer of a firm, but the law doesn’t define a cap on that time period.
Thanks to the new changes, employment relations will become better in the private sector. But for the public sector, however, cannot be said the same. The amendment will offer more stability which will make it easy for workers and companies to do contractual arrangements lasting for a longer time.
The new changes in labour law have become effective in the UAE. Following are the post-Corona virus pandemic workplace regulations:
- Shorter work weeks
- Flexible working hours
- Updated regulations for temporary/part-time work protecting the rights of an employee
- Equal pay for women and men
- The leaves policy is updated
- Rules of employment termination during the probation period
- A variety of work models
According to the MOHRE (Ministry of Human Resource and Emiratisation), the implementation of the new UAE Labour Law 2022 will help for the success and future growth of the rapidly upgrading workforce in the Emirates. The law not only emphasizes gender equality in the workplace but also attracts fresh talent.
1. New Work Models
The first change made to the law is the introduction of the new work models. The UAE government has added new working models for the workplaces along with full-time employment which is as follows:
- Flexible work: discretion to do some part of the complete work remotely
- Part-time: working for one or more than one employers for a defined set of days or hours
- Temporary work: work to be completed for a certain project or within a specific time duration
It is expected further ministerial or cabinet decisions to define their contractual terms and advantages. Nevertheless, the new Labour Law explains the definition of the working models.
Not only that, but the enactment of this law will offer flexibility for employees looking for different and new work models. It has also offered employers more choices to fulfill their recruitment requirements to hire experienced and skillful people.
2. Introduction of Work Permits
The next change is about the launch of new work permits. The Ministry of Human Resource and Emiratisation has introduced 12 new types of work permits. They differ depending on the work model an employee is hired for and the nature of his/her work. Following are the work permits that you must know:
- Juvenile Work Permit: This permit will let teenagers aged 15 to 18 years work under legal controls and regulations at a facility registered by the ministry.
- Standard Permit: It is for allowing foreign workers from different parts of the world to come into the UAE for employment.
- Residences of the Relatives: This is a work permit for people living at their relatives’ residences in the UAE.
- Temporary Work Permit: It is for people employed on a temporary work model by a company or firm.
- Transfer Work Permit: There is a permit to transfer an ex-pat or non-national employer between establishments registered by Ministry.
- Project Work Permit: This permit is for Ministry-registered establishments that are looking to hire foreign workers for a defined, fixed time-period project.
- Work Permit for Golden Residence Holders: It should be issued at the request of a Ministry-registered entity. This is a work permit for golden residence holders.
- Part-Time Work Permit: This is a permit for people currently working on the part-time work model. According to the permit, employees can work for more than one employer.
- Training and Employment Permit: The permit for students will allow Ministry-registered establishments to train or/and hire a UAE national student while keeping the legal controls and regulations in mind. The student’s age should be 15 and elder.
- National Trainees Work Permit: It is for institutions registered under the Ministry that are willing to educate and give training to UAE citizens depending on their scientific qualifications.
- Work Permit for GCC Citizens/Children: This work permit is for GCC children or citizens. This change allows GCC citizens or children to be employed at Ministry-registered establishments.
- Self-Employment Permit: A self-employment permit enables people to work on their own with no sponsor to look for.
According to the Executive Regulation of the Law, new work permits can be added through a separate decision made in compliance with the Law’s provisions. Ensuring that working models are best suited to the personal & unique circumstances of firms and individuals, is crucial for increasing the labour market’s flexibility.
3. Scope of Employees’ Work
The law has also defined the scope of the work of the employees to make sure they only do the work for which they signed. The Law does not allow the employer to broaden the assigning responsibilities of the employees that are fundamentally different from the work or the scope of the employee’s work that was defined in their contract of employment. If the employer has to broaden the scope, the following conditions should be applicable:
- Revised scope or extra responsibility of work is fulfilled for a maximum of 90 days
- The written consent of the employee to the revised scope or additional responsibility of the work is provided to the emoployer
The new Law makes sure that the employee only does the work only that is designated to him/her in the employment contract. Employers are not responsible for any extra work or duties outside the contract.
4. Employment Contracts
According to the amended law, a restricted fixed-term contract must not last longer than three years. The contract may be extended or renewed for a shorter or similar period of time if both parties agree to it.
The decree-laws provisions apply to the agreements of employment of an indefinite time period in accordance with the Federal Law No (8) of 1980.
Unlimited employment contracts must be changed into fixed-term employment contracts as defined in the modifications made to the Law. These contracts shall be subject to the procedures, limits, and regulations set forth in the decree by the Labour Law within one year after the effective date of the agreement. If required, the Council of Ministers has the authority to prolong them for longer periods of time. It is done in the interest of the public.
The following rulings on probation are effective as given in the new Labour Law:
- The probationary period for an employee in the UAE must not go over six months.
- In case of termination during probation, the employer must give a two-week notice to the employee.
- Employees must serve a 30-day notice period in case of quitting during probation.
- If the employee decides to leave the UAE during the probation period, he/she must serve a 14-day notice period.
- If a worker quits, departs the UAE, and then comes back to start a new job at a new firm within 180 days. In that situation, the old employer is entitled to receive the amount for the purchase of the visa as well as other charges from the new employer.
- In all cases, notice periods must not go over three months.
- Employers are allowed to complete a termination notice during the leave period of the employee. But, the notice period will start upon the return of the employee to work after leave.
- Employees are allowed to cancel their employment contract due to different specific conditions without giving any notice.
- The employer is now allowed to terminate employment contracts without giving any prior notice for the ten reasons mentioned under article 120 of the original labour law. Even in these situations, the employer is required to give the employee his or her due end-of-service benefits.
5. Non-Competition Clause
The new Labour Law of the UAE states that an employer is allowed to include a non-competitive clause in the contract of employment. This is only applicable to employers who have given access to the trade secrets of the company or important and sensitive information about the clients of the employer.
The time of non-competition should not be more than two years from the expiry date of the contract. If a condition as such is specified in terms of type and place of work, and time to the extent necessary to safeguard the legitimate interests of the business, this clause will be effective.
6. Covenant to Never Compete
The new Law defines the time duration and circumstances under which covenant to never compete clauses can be legal and binding. If the following conditions are fulfilled, the employers can trigger the non-compete clause in case of the termination or departure of the employee:
- The time period of the non-compete clause cannot go over two years. This limitation of time period helps to make a better competitive workforce.
- The employee knew the trade secrets of the company or had access to the client information during the duration of employment
If the employer unlawfully terminates the employment contract, non-compete clauses cannot be applicable.
Although the covenant to never compete helps employers safeguard their business secrets and keep skillful employees, they can be seen as anti-competitive if the time duration and conditions are extremely limiting and unreasonable.
7. No Discrimination Clause
The new Labour Law has provided the following protections to boost a no-discrimination environment within businesses and firms operating in the UAE:
- Employers need to protect employees against violence, harassment, and bullying
- Employers must give equal pay to female workers for the same job
The prohibition of discrimination in the workplace on the basis of national origin, gender, religion, and age is one of the most praise able protections of the law. This gives opportunities to the UAE nationals to promote their participation in the country’s labor market.
Companies must assess their current employment policies and guarantee that all requirements under the Law are represented in their employment contracts and internal policies. Employers are also urged to conduct awareness programs and training within the company to inform staff members of their obligations and rights.
Every employee is able to get different leaves as per labour laws and regulations. No changes were introduced to the UAE’s sick leaves law. These leaves to whom changes were made are:
- A maximum of 5 days of paternity leave are allowed which can be taken concurrently or intermittently more than six months after childbirth.
- 45-day fully paid maternity leave
- An extra 45 days of unpaid leave is given in case of illness (child and mother). For this leave, the employee must submit supporting documents
- Extended 15-day half-paid leave
- Mothers who have infants with impairments are allowed to take an additional 30-day paid leave. Up to 30 extra days can be added to the leave without being paid. It is necessary to provide a medical certificate from an appropriate authority attesting to the illness or disability.
National Duty Leave
Private sector UAE national workers in the Emirates have the right to take a full-time leave to complete their national service. To take the leave, they must submit proof of service.
- Three days due to the death of a close family including grandparents, mother, siblings, father, child, etc.
- Five days due to the spouse’s death.
If the employee has worked for the current employer for more than two years, they are eligible for a 10-day study to leave given they are studying in educational institutes registered by the authorities.
9. Workplace Regulation
According to the new Labour Law, businesses having over 50 employees are required to make internal rules and procedures effective that deal with matters linked to the workplace, such as rewards, working hours, promotions, disciplinary sanctions, safety, and health.
Employers must therefore review their current procedures and policies and adjust their framework to comply with the Labour Law’s needs. Additionally, businesses are urged to hold awareness seminars and training programs on the new processes, guidelines, obligations, and rights of their workers.
10. Maximum Work Hours
In accordance with Article 17 (1) of the Federal Decree-Law No. (33) of 2021 on the Regulation of Labour Relations (the “New Employment Law”), the maximum daytime hours and workweek are 8 hours per day and 48 hours per week respectively. Work hours must be cut by two hours during the holy month of Ramadan.
The Federal Decree-Law No. (47) of 2021’s Article 7, Clause 1 also mentions the work rules.
However, Article 7(2) of the New Employment Law also recommends that the Cabinet can decrease or increase the everyday work hours for specific economic categories or sectors of employees in consultation with the relevant enterprise and on the minister’s recommendation.
With several exceptions outlined in the “Executive Regulations of the Labour Law,” commute time is not regarded as part of the working hours.
11. Disciplinary Penalties or Financial Exposure
The new Law also specifies the kinds of disciplinary sanctions that may be imposed for violations of rules and regulations at work, such as:
- Dismissal from a job while safeguarding the worker’s right to an end-of-service gratuity
- Formal written notice
- Promotion denial
- Formal written warning
- Deduction from remuneration
- Deprivation of increment
- Suspension from work
In accordance with the new Labour Law, employers must have a case resolution mechanism and sufficient investigation management operational in the company to permit employees to voice grievances and complaints, end the investigation promptly, and inform the employee of the findings of the conducted investigation as well as the justification for applying penalties.
12. New Unemployment Insurance Scheme
The United Arab Emirates has implemented an unemployment insurance scheme for employees in both the public and private sectors. This new scheme will become effective in 2023 and will pay 60% of the employee’s base pay. In the case of unemployment, insured employees will get up to AED 20,000. Workers who intend to obtain financial assistance until they secure a new job will have access to the scheme.
Employers with temporary employment contracts, domestic workers, investors, minors or people under the age of 18, and pension-eligible retirees cannot receive unemployment insurance advantages. The employee can obtain unemployment insurance coverage by paying a small annual contribution to the plan in order to get the benefits of unemployment insurance.
Employers will be able to attract top talent from across the world since unemployment insurance will have an impact on the entire economy and boost the UAE’s attractiveness as a destination to work and live.
Is This New Labour Law UAE a Good Step?
Thanks to the New UAE Labor Law, the government of the UAE has played a crucial role in safeguarding the rights of employees and employers. This step is also taken to make the workplace more flexible in order to enhance market efficiency.
The introduction of leaves for employers has been a fantastic way to benefit employers so that they can make their minds fresh and do their extra work.
Furthermore, firms must implement a budget and a clear strategy to close any gender pay inequalities in order to comply with the equal pay for an equal work requirement.
In order to guarantee that all employees are aware of the new Law’s provisions, it is crucial that the requirements and principles of the new law are outlined in the entity’s Code of Conduct Policy and Employee Handbook.
The New Labour Law in UAE 2022 will prove to be very helpful to the workers. There are significant changes made to the law that will make UAE a better place for people to work. If you have any questions related to this law or want to find out more about any change, you can visit the official website of MOHRE (Ministry of Human Resources and Emiratisation).
If you are looking to start a business in Dubai, UAE, you can get in touch with RIZ & MONA. We are experienced business consultants working for a long time in Dubai, UAE.