New UAE Labour Law: Rules and implications for employees

The Emirates implemented a new UAE Labour Law on February 2nd of this year. This new federal regulation completely replaces the existing legislation, which had been in effect since 1980. This represents a significant shift in labor relations between workers and employers in both the commercial and governmental sectors.

In this article, we will give you a summary of significant revisions and changes to the new UAE Labour Law. Employers and workers must be informed of the changes to understand their rights and duties. Furthermore, to apply these new rules, both sides must adjust to such criteria.

1. What are the implications of the newest UAE Labor Law?

2. What are the requirements for fixed-term contracts now?

3. How much is the period of probation?

4. What are the changes regarding overtime and rest periods?

5. When is leave applicable under the new law?

6. What changed regarding payment?

7. When is termination eligible now?

8. What are the provisions regarding workplace policies?

9. Where can I find help to understand the new law entirely?

1. What are the implications of the newest UAE Labor Law?

The United Arab Emirates (UAE) has enacted new UAE Labour Law that governs private-sector employment relationships. Federal Decree-Law N. 33 of 2021 went into effect on February 2, 2022, replacing and repealing Federal Law N. 8 of 1980, as modified, in its entirety.

The labor changes to the UAE Labour Law are significant, necessitating updates to current employment contracts as well as changes to rules and procedures regarding future negotiations with new workers. The UAE government intends to release executive rules to give more guidance on the new legislation.

In conjunction with the new UAE Labour Law reforms, the UAE economy is moving all government workers to a Monday–Friday working time (including a half-day on Fridays). While it is not necessary for the private industry, many are preparing to adopt a Monday–Friday timetable to align with the government’s new schedule.

2. What are the requirements for fixed-term contracts now?

That is the most significant reform. Requiring corporations to modify existing employment contracts. The ones that are not fixed-term already. Employers have to place all workers on fixed-term contracts with a limit period of three years.

When it comes to big corporations changing plenty of contracts, the best thing to do is to find an employment lawyer. That will help you make sure you are following all the rules.

According to the UAE Labour Law, if agreed upon, contract terms can be shortened. There is no limit to the number of contracts in fixed-term that an employer may enter into in a row. Companies have until Feb 2023 to transition all staff to fixed-term contracts.

3. How much is the period of probation?

Under the new UAE Labour Law, the maximum probationary term stays at six months. However, the new law imposes specific notification obligations during the probationary period. Employers must now offer a minimum of 14 days of written notice of their intention to terminate an employee’s employment contract if the employee is on probation.

When an employee wishes to quit within his or her probationary period, they can do so following these conditions:

• If you are leaving to work for another company in the UAE, give one month’s notice.
• In case an employee intends to depart the UAE, provide fourteen days’ notice.

Working conditions that are adaptable. The New UAE Labour Law specifically acknowledges flexible work arrangements as a sort of employment relationship that parties can agree on.

4. What are the changes regarding overtime and rest periods?

Managers and supervisors were immune from overtime pay under previous labor laws. The new UAE Labour Law makes no mention of this exception. The Ministry of Human Resources and Emiratizations (MHRE) issues executive rules outlining if and how the exemption would apply under the new labor legislation.

4.1 Rest periods

Employers do not have to establish a Friday rest day under the new UAE Labour Law. It can take place on any weekday if the parties agree.

5. When is leave applicable under the new law?

The first thing you have to know is what changes apply to the leave salary calculation according to the UAE Labour Law.

5.1 Leave for maternity

The new UAE Labour Law extends maternity leave to sixty calendar days, with the first 45 days paid in full and the last fifteen days paid at half pay. Employers cannot by the new UAE labor law decrease an employee’s maternity pay. Including if the worker has not completed one whole year of work at the time of requesting maternity leave.

Additionally, by the UAE Labour Law workers are now eligible for parental leave and pay if they miscarry past six months of pregnancy, have a stillbirth, or endure the loss of a baby after birth.

Workers who give birth to sick or disabled children whose health problems necessitate continuous companionship have the right to an extra 30 calendar days of maternity (with full salary), which can be prolonged for another thirty days (unpaid).

The new UAE Labour Law cuts employees’ nursing leave entitlement from 18 months to 6 months from delivers’ date. Workers can still take leave without payment after exhausting their maternity leave for pregnancy medical conditions. However, the eligibility has been cut from 100 days to 45 days.

5.2 Leave of absence with compassion

In the case that an employee’s spouse or wife dies, the employee is eligible for five days of paid leave. In the case of the death of an employee’s parent, child, sibling, or grandparent, the employee is eligible for three days’ leave under the new UAE Labour Law.

5.3 Take a study break

Workers with more than two years of service who associate with or frequently study at an accredited UAE educational institution have the right to 10 working days of study permit per year. The new UAE Labour Law makes no mention of whether this should be underpayment or can go unpaid. The next executive regulations are likely to offer further clarification on this subject.

5.4 Rollover of annual leave

Employees must spend the annual leave in the calendar year that it accumulates unless the parties agree otherwise. The new UAE Labour Law does not specify how to manage unused leave, and whether it can be considered forfeited.

The MOHRE’s next executive regulations intend to give greater information on this subject. Workers are eligible for remuneration instead of unused leave following termination of employment depending only on their basic wage.

5.5 Leave for job search

Furthermore, according to the new UAE Labour Law employees now have the right to 1 day of unpaid absence every week throughout their notice period to hunt for new work.

6. What changed regarding payment?

When it comes to dealing with money, it is always best to count on someone who understands the deal. Labor attorneys in Dubai can help you keep track of the new payment regulations.

6.1 Salary payment currency

Employers are free to pay employees in whatever currencies set upon by the participants in the contract of employment. The next executive rules will offer further clarity on how this clause under the new UAE Labour Law operates in practice for firms who pay employees under the existing WPS – Wages Protection System.

6.2 End-of-service bonus

Previously, an EOGS (end-of-service gratuity) for a resigning worker was reduced based on the length of service.

• No EOSG if the worker has less than a year of service
• One-third EOSG if the worker completes up to 3 years’ service.
• Two-thirds EOSG if the worker completes 3 to 5 years’ service.
• 100 percent EOSG if the worker completes more than 5 years’ service.

Workers who have done at least a year of employment will be eligible to complete end of service gratuity when they retire under the new law.

6.3 Payment of end-of-service benefits

According to new UAE Labour Law employees must receive their termination entitlements within fourteen days of their termination date. There was no officially specified deadline ahead of the new law.

6.4 Equal pay and discrimination

The UAE Labour Law protects workers against employment discrimination based on race, color, gender, religion, nationality, social origin, or disabilities. Pregnancy and maternity are not protected characteristics.

Nonetheless, employers are forbidden from terminating (or threatening to terminate) a worker’s employment due to pregnancy or on maternity leave.

Furthermore, the legislation states that men and women should be paid equally for doing the same job. This was initially by Federal Decree N. 6 of 2020, but it is now reinforced by the new UAE Labour law.

7. When is termination eligible now?

It is important to know exactly what the UAE Labour Law states. Additionally, in case you feel it is not being followed, you can file a complaint about labour issues to fix this.

7.1 Reasons for termination

Under the new UAE Labour law, redundancy terminatiSon is an acceptable reason for terminating an employment contract. Redundancy was not under previous legislation.

Additional reasons for “for-cause” termination exist, such as when an employee: Exploits his or her authority for gain or personal benefit, or begins employment for another company without following the necessary regulations and procedures.

7.2 Suspension

Corporations may suspend workers for up to 30 days while conducting a disciplinary inquiry, with one-half pay. If an employee is subsequently exonerated of misconduct, he or she is eligible for repayment for any withheld wages by the new UAE Labour Law.

7.3 Notice periods for contract termination

The minimum notice time for terminating an employment contract is still 30 days, but the highest notice period is now 90 days. The new UAE Labour Law also mandates minimum grace periods for terminating existing unlimited contracts before the implementation of new fixed-term contracts.

In this case, the employer has to provide at least 30 days’ notice if the worker has been with the company for less than 5 years; 60 days’ notice if the worker has been with the company for more than 5 years but less than 10 years; and ninety days’ notice if the worker has been with the company for more than 10 years.

7.4 Covenants with restrictions

Under the new UAE Labour Law, the maximum post-termination limited duration for non-compete agreements is two years.

8. What are the provisions regarding workplace policies?

The new UAE labour Law regulation also includes aspects that employers may wish to consider, even when they are not in employment agreements, such as:

8.1 Bullying and sexual harassment

Employees are now have protection from workplace harassment and discrimination under the new UAE Labour Law. Article 14 specifically outlaws “sexual harassment, bullying, or any verbal, bodily, or psychological assault” against an employee.

8.2 Internal work procedures (Handbook)

Article N. 13 of the newest legislation outlines a variety of employer responsibilities, including the necessity that firms follow internal work regulations. There is no more information so far. As a result, the next executive rules will lay out the structure and offer greater information on this obligation.

8.3 Retaining employment records

Business owners must preserve all employment data must for at least two years following a termination of employment, according to the new UAE Labour Law.

Employers will face significant adjustments as a result of the new UAE Labour Law. Employers should consider establishing plans for implementing these new changes during the coming year.

9. Where can I find help to understand the new law entirely?

The UAE Labour Law is intended to foster better working relationships between companies and employees. Furthermore, businesses can benefit from assurances that safeguard their interests as well as the interests of their workers. You may have a piece of mind knowing that you are by these regulations if you use our legal services.

As the contemporary world changes, so do new employment opportunities. The pandemic has compelled businesses to develop new, more adaptable, and productive work methods. As a result, the 2022 Labour regulations intend to improve working conditions for both employers and employees. Connect Legal is aware of the region’s shifting job situation.

Do you require our assistance in comprehending these legislative changes? Do you find it difficult to meet these requirements? If you have any queries concerning the new Labour Law, please submit them to contact@connectlegal.ae and a member of our staff will get back to you. You can also call us at +971 43 316 688.

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