new Labour Law Legal advice, Legal Guidence

February 2 of this year, a new Labour Law came into force in the UAE. This new federal decree is a total amendment of the previous law in force since 1980. This is a profound transformation of labour relations between employers and employees in the private and public sectors.

In this article, we will simply show you the main changes made to the Labour Law in the UAE. Employers and employees need to be aware of the changes so that they can know their rights and responsibilities. In addition, both parties must adapt to these requirements to comply with these laws.

  1. Why did the UAE change its Labour Law?
  2. Terms for employment according to sex and age
  3. Are there new requirements for work permits?
  4. What are the new types of employment contracts?
  5. Types of leaves under the new Labour Law
  6. Which sanctions are permitted under the UAE Labour Law?
  7. Termination of workers’ contracts
  8. What are the main changes of the new Labour Law?
  9. Would you like to receive our assistance to understand these law changes?

1. Why did the UAE change its Labour Law?

Since 1980, the Labour Law in the UAE remained unchanged. However, the crisis caused by the pandemic, in addition to the growth of the economy, forced changes in it. Today the UAE is a multicultural territory where foreigners from all over the world come in search of opportunities.

Therefore, this amendment aims to improve working conditions and help the local labour market. At the same time, this amendment aims to provide employers with flexible ways to get workers. We find in this Labour Law a proposal to modernize the market and provide new opportunities for workers and companies.

Moreover, this legal reform provides the opportunity for individuals and businesses to participate in local economic growth. Regardless of ethnicity, religion, race, or sex, investors and employees will be able to tap into the growing domestic market. Furthermore, individuals and companies should not worry about discrimination or similar problems.

2. Terms for employment according to sex and age

The UAE’s authorities created anti-discrimination reforms to ensure optimal conditions for employees. Likewise, the Labour Law allows women to receive the same compensation as their male colleagues. Article 4 of this reform protects employees from any form of employment or wage discrimination.

On the other hand, the new Labour Law prohibits all forms of child exploitation. Therefore, children under the age of 15 cannot perform any kind of work. In addition, those over the age of 15 can only work with their parent’s permission. Teenagers will not work more than 6 hours a day and are prohibited from performing certain tasks.

3. Are there new requirements for work permits?

The reform of the new Labour Law states that no individual can work without a work permit. In addition, those companies that hire workers without this fundamental requirement will be penalized with up to AED 200,000. This applies to those employers who fail to comply with the following terms.

  • Hire an employee who does not hold a work permit issued by the UAE authorities.
  • For those companies that offer a job to workers and then leave them without a job.
  • Companies that hire young people under the age of 15 or without legal permission issued by their parents.
  • Employers who close their businesses for any reason without paying their employees their salary benefits.
  • New employment visa rules in the UAE require that workers leave the country and come back if they change sponsors.

The new Labour Law also states that employers cannot charge their workers for obtaining permission.  Besides, the processes for obtaining, renewing, or canceling this work permit were established by government authorities.

4. What are the new types of employment contracts?

Considering the transformation of the labour market due to the COVID-19 pandemic, the UAE government is encouraging new forms of employment. The new Labour Law allows workers and companies to establish agreements to work with greater flexibility. Whether it is reducing working hours or allowing remote work, these are the new forms of employment:

  • Part-time contracts that allow the employee to work for more than one company.
  • Temporary contracts that are limited to the fulfillment of a specific task by the worker.
  • Finally, flexible type contracts allow the work schedule to change depending on the number of tasks performed.

Under the new Labour Law, companies can use any kind of contract with different workers. Thus, companies can find employees and establish agreements with them according to the needs of both parties. However, since the reform of this employment law, companies cannot agree on unlimited contracts with their workers.

5. Types of leaves under the new Labour Law

The reform of the Labour Law establishes different types of leaves. Furthermore, this law makes it easier for workers and companies to know the legally approved breaks, leaves and wage benefits. In summary, we can find the following types of leaves:

  • General leaves, in which the worker is entitled to a weekly rest day. Moreover, employees will be able to rest on national holidays declared by the government. Besides, if the company needs its employee during leave, workers will receive an additional 50% of their daily salary.
  • Workers who have been working in the company for more than a year are entitled to annual leave. The UAE Labour Law states that the employee will receive the equivalent of the salary of 30 days before the vacation. If you want to know other more explicit conditions about these breaks, we invite you to contact our lawyers for more information.

This Labour Law reform provides paid maternity leave for mothers who have recently given birth. Therefore, the first 45 days of this leave will be paid in full. The following 15 days the worker agreed to the equivalent of half the salary.

  • Sick leaves are permits granted for up to 90 days. The worker will receive his full salary for the first 15 days of his sick leave. The employee will then receive half of their payment if they cannot return within 30 days. Finally, the last 45 days of sick leave workers will not receive their payment.
  • On the other hand, in the event of the death of a spouse, the employee will have five days of compassionate leave. In addition, the employee will have three days of leave for the death of children or siblings. Finally, workers will have five-day leaves for the death of their parents.

6. Which sanctions are permitted under the UAE Labour Law?

Companies can take disciplinary action if their employees breach the contractual obligations. In the case of absence from work, bad behavior, or failures in their performance, employers may grant penalties to their employees.

Some of these measures may include warning letters, suspensions not exceeding 14 days, and wage deductions. It is at the discretion of the employer which is the best disciplinary measure, however, these must be defined in the contract.

Companies can only grant these sanctions to their employees if they committed faults related to their work. Therefore, workers will only receive these penalties in the workplace or by committing mistakes related to their work. The UAE Labour Law states that a company can only take one disciplinary action and not several at the same time.

7. Termination of workers’ contracts

The Labour Law clarifies the terms that legitimize the termination of the employment contract. To know the terms of termination of the employment relationship, we can divide this situation into two categories.

7.1 Grounds for termination of the contract

Below, we clarify the situations in which the employment contract may end:

  • By mutual agreement between the worker and the company.
  • For the death of the employer (In case the contract has been agreed personally)
  • For death or disability of the worker.
  • Bankruptcy, insolvency or closure of the company.
  • If the worker cannot renew his work permit, the contract will end automatically.
  • Companies can finish a work relation on their own if they comply with the stipulations of the Labour and decree-law.

In addition, it is important to note that it is optional for workers and companies to renew a contract after its termination. If the company decides to terminate the contract justifying one of the reasons authorized by law, the employer must notify the employee. This notice must be delivered 90 days before the termination of the contract, and the employee will receive his full salary.

7.2 Can an employer dismiss an employee without prior notification?

Only in the following cases can a company fire its employees without notifying them in advance.

  • If the work permit or the worker’s identification turns out to be false.
  • In case the employee is absent for more than 7 consecutive days without prior notice.
  • When the worker makes repeated mistakes in his working day. The employer must notify its workers of these errors with penalties that serve as a warning.
  • The employee attends his workplace under the influence of drugs or alcohol.
  • By disclosing secrets of your company related to your production processes.
  • If the employee commits a crime and gets a conviction because of it.
  • Workers started a new job relation without complying with the proper legal procedures.

In addition, the UAE Labour Law authorizes workers to leave their workplace without notice. If employers fail to comply with the guarantees of the contract, workers must notify the labour department 14 days in advance. Moreover, if the company exploits the worker or threatens his well-being, the employee has the right to leave.

8. What are the main changes of the new Labour Law?

We have shown you some of the main clauses of the new UAE Labour Law. However, being such a recent reform, many people may wonder what the main changes of this legislation are. It is important to be attentive to the new demands to comply with the requirements of the government authorities.

First of all, we must highlight the importance that the UAE government is giving to new forms of employment. In fact, employers can negotiate with their workers’ contracts that are flexible and that benefit both parties. On the other hand, we must mention that the new Labour Law prohibits the creation of labour contracts without a time limit.

On the other hand, the UAE’s new Labour Law is promoting an anti-discrimination agenda. Thanks to this initiative, people of all national origins, ethnicities and races can work in the country. Women benefit from these changes like never before, as they will receive the same wage benefits as men.

Finally, this reform of the Labour Law clarifies several points that were previously controversial. Workers and companies already know the limitations and guarantees they must enjoy when signing an employment contract. Therefore, the employment relationship of both parties will improve considerably as they both know their rights and duties.

9. Would you like to receive our assistance to understand these law changes?

The UAE’s new Labour Law is designed to help create better working relations between employers and employees. With the growth of the UAE, it becomes necessary to create legislation that helps reduce discrimination in the territory. In addition, companies can enjoy guarantees that protect their interests and those of their employees. With our legal services, you can enjoy the peace of knowing you are in compliance with these laws.

The modern world evolves and with it, new alternatives to work arise. In addition, the pandemic has caused companies to create new, more flexible, and productive work methodologies. Therefore, the new Labour Law aims to create favorable conditions for employers and workers in our emirates. In Connect Legal, we understand the changing employment landscape in the region.

Do you need our help to understand these law changes? Are you having trouble complying with these requirements? If you want to learn more about the new Labour Law, send your questions to contact@connectlegal.ae and our team will reach out to help you.

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Danielle

Danielle
Danielle is Head of Operations at Connect Resources. She also advises & manages the legal work of the company having studied Law at John Moore’s University in Liverpool, United Kingdom. Danielle oversees the processes of the company’s various departments and ensures an overall smooth interconnectedness and operation between each in order for the company to function at its highest potential.

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