On 2 February 2022 a new UAE labour law came into effect. It is the UAE Federal Decree-Law No 33 of 2021 on the Regulation of Labour Relations. The new law replaced Federal Law No. (8) of 1980.
The new UAE Labour Law is the most comprehensive and significant change to the country’s labour laws since 1980. It is designed to align UAE labour legislation with international best practices on various fronts, such as the formal establishment of atypical or flexible working arrangements and the introduction of statutory obligations relating to anti-discrimination, equal pay and, protection from bullying and sexual harassment.
The summarised below the most significant changes:
1. New employment contracts should be drafted: Deadline – February 1, 2023
All private sector employers must replace the current employment contracts with the Ministry of Human Resources and Emiratisation (MOHRE) with new employment contracts that are in line with the changes as stated in new law, within a maximum period of one year from the date of the law’s implementation so that the date February 01, 2023 becomes the deadline for making these changes.
2. No more unlimited contract
Under Article (8) of the new law, titled ‘Employment contract’, Clause 3 states: “The Employment Contract shall be concluded for a definite period of time, which does not exceed three years. The employment contract may be extended or renewed once or more than once, for an equal or a shorter term.”
This will effectively impact the duration for which employment contracts are signed, i.e. the new law has abolished unlimited contracts in general, replacing them with work contracts of fixed term for a period of three years, renewable.
3. New types of leaves – mourning leaves, study leaves and more
It was decided to give the worker some special leave days based on new rules.
These are:
1. a mourning leave of five days in the event of the death of the husband or wife,
2. a mourning leave of three days in the event of the death of a father, mother, grandfather, grandmother, sons, brother, sister, grandchildren, starting from the date of death,
3. a parental leave of five days, which is the leave granted to spend time with the family for the worker who has a new-born within a period of six months of the child being born and to be used intermittently or continuously,
4. a studying leave of ten days for the worker who has to take exams provided that he completes two years working with the same employer.
The new law also provides a longer maternity leave to women, with 45 days with full pay and the next 15 days with half pay, along with other articles also providing details of how an employee can avail of sick leaves and unpaid leaves.
4. Prohibiting discrimination, forced labour, harassment, bullying
The new law strengthens the principle of equal opportunities, emphasises equal access to jobs and enjoyment of their rights. It also prohibits all forms of discrimination, bullying, violence, harassment, coercion, and threats in the work environment.
The employer may not use any means that would force the worker or threaten him with any punishment to work for him or force him to do work or provide a service against his will. It also prohibited sexual harassment, bullying, or practising any verbal, physical or psychological violence on the employee by the employer, his superiors at work, his colleagues or those working with him.
5. Equal pay for equal work for both men and women
Apart from articles prohibiting discrimination based on race, colour, sex, religion, national origin or social origin, Article 4 on ‘Equality; non-discrimination’ also specifies the right of women to equal treatment.
All provisions regulating the employment of workers without discrimination shall apply to working women, with an emphasis on granting women the same wage as men if they perform the same work or other work of equal value.
6. New models of work announced
The new models of work that will enhance the ease of business and the flexibility of the labour market became permited. These include full-time, part-time, temporary or flexible work.
These allow employers to meet their labour needs and benefit from their energies and productivity at the lowest operational costs through part-time work, temporary work and flexible work in parallel with providing several options for employers to employ workers whose work contracts have expired and who are in the country through easy and flexible procedures.
7. The chance to have a shorter work week
Another new option that the law provides is the ability to work on a ‘condensed working hours model’.
Speaking about the working hours, an employee, as per Article 65 of the current law, is supposed to work for eight hours per day or 48 hours in a week. But the new law gives an option to the employee – provided that his or her employment contract allows it – to work for 40 hours in a week on a condensed working hours model.
8. Termination Notices
Resignation terms in the probation period have been improved but also strengthened. Within the new fixed term contracts both parties in the contract have to give a minimum of two weeks’ notice. Once a person, as per the current law, is hired on a probation basis, the employer was expressly entitled to dismiss the employee during or at the end of the probation period without notice. As per the new law, the employer wishing to dismiss the employee during probationary period must give a 14 days’ notice.
However for the employee it’s a little more complicated, if employee is resigning to leave the UAE, then two weeks’ notice is just fine, though if employee gets home and decides to come back within three months of leaving then you’re a new employer will have to compensate the old employer for the fees paid to hire such employee.
The same goes if employee wants to stay in country; a new employer has to compensate the old employer, however, in this instance the employee has to give 30 days’ notice within their probation period. If employee decides to not give notice and abscond from the UAE, he/she will have a mandatory ban of one year for any new work permits.
9. Non-competition clause
Article 10 of the new law, which regulates the non-compete clause of contracts, also brings certain changes made to the earlier law, further strengthening the rights of an employer.
Though the earlier law, through Article 127, restrains an employee from working for a prospective employer that carries out a business which competes with his or her former employer’s business, it was not mandatory for the former employer to restrain the employee by executing a ‘Non-Compete Agreement’. But the employer, as per the new law, shall be statutorily bound to, if it intends to protect its business interests, execute a Non-Compete Agreement with the employee.
The agreement would be required to consist of the following factors:
a) An ascertained duration which shall not be more than two years during which the employee shall not work for a prospective employer which competes with the former employer;
b) The geography within which the employee shall be restrained from taking up an employment; and
c) The types of works which the employee shall not be allowed to take up for the ascertained period of time in order to shield the business interests of the former employer.
Above all, the former employer shall, subject to whether the employee had access to information which is regarded as sensitive, execute a Non-Compete Agreement with the latter.