One of the most important interactions in a healthy economy that supports private sector growth is the one between the employer and the employee. To ensure the security of all parties, laws and regulations need to be enforced to support the partnership. Governments typically create employment rules to regulate this sort of association.
The new UAE labour law, implemented in February 2022, aims to improve employment rights and attract skilled talent to the private sector.
What is the UAE labor law?
Labor law refers to rules and regulations governing the relationship between an employer and the employee. The Ministry of Human Resources and Emiratisation is the key authority overseeing the implementation and enforcement of these laws. Federal Decree law No. 20 of 2023 Amending Certain Provisions of Federal Decree Law No. 33 of 2021 regarding the regulation of employment relationships, known as the ‘UAE Labor law’, governs the employer-employee relations in the private sector.
Key objectives of the UAE labor law
The law aims to achieve the following:
- Ensuring the efficiency of the labor market in the country, which contributes to attracting and maintaining the best competencies and future skills from the workforce. And, henceforth providing an attractive business environment for employers, which helps both parties to participate in achieving the state’s national development goals.
- Regulating labor relations and determining the rights and obligations of the parties in this legal relation in a balanced manner.
- Enhancing the flexibility and sustainability of the labor market in the country by ensuring the protection of the parties to the labor relation, its developments, and the exceptional circumstances that they may face which may affect that relation.
- Supporting and rehabilitating the capabilities and skills of workers in the private sector, in a manner that enhances the efficiency and productivity of the workforce in the labor market in the country.
- Providing protection to both parties to the labor relation and enabling them to obtain their rights within the legal framework.
Types of work
Let’s take a look at the kinds of work it includes:
Full-time: This implies that you are working for one employer for the full daily working hours throughout business days.
Part-time: This indicates you are working for one or multiple employers for a specified number of working hours or days.
Temporary work: This work requires a specific period of time, or which focuses on a specific job and ends by the completion thereof.
Flexible work: This is a work in which hours or working days change according to the volume of work and the economic and operational variables of the employer, including economic or exceptional reasons. The worker may work for the employer for times that change according to work conditions and requirements.
Remote work: This means that full or part of the work is performed outside the workplace.
Job sharing: In this, the tasks and duties are shared and divided amongst employees as agreed. The rules of part-time work apply to these contracts.
Read more: How to pay Involuntary Loss of Employment (ILOE) insurance fine in UAE
Working in the private sector
UAE labor law and employment contract
Federal Decree law No. 20 of 2023 Amending Certain Provisions of Federal Decree Law No. 33 of 2021 Regarding the Regulation of Employment Relationships, known as the ‘UAE Labor law’, governs the employer-employee relations in the private sector. The provisions of the law apply to all businesses, employees and employers in the private sector. The law became effective on February 2, 2022. It repealed the previous Federal Law No. 8 of 1980.
The new law aims to protect both parties in the employment relationship and enables them to obtain their rights in a balanced manner. It covers matters related to working hours, overtime, leaves, vacation and public holidays, employing juveniles, employee records, safety standards, minimum wage, termination of employment, end of service gratuity payments, work injuries, amongst others. The law also outlines various scenarios under which an employment contract may be terminated, including non-compete restrictions and details about fixed-term contracts.
The law introduces several work models such as full-time, part-time, temporary and flexible. It abolishes the ‘unlimited’ type of contracts and admits only limited or fixed-term contracts. It grants new types of leaves and tackles issues related to harassment, bullying, physical violence and psychological abuse against employees.
Also, it prohibits forced labor and discrimination on the basis of gender, race, colour, sex, religion, national or social origin or disability. It also spells out employers’ obligations towards employees.
Private sector working hours
In the private sector, the working hours are: 48 hours a week, or eight hours a day. The number of hours during the holy month of Ramadan are reduced by two. For certain people or economic sectors, the number of hours spent each day could go up or down. These are defined in the Labour Law’s Executive Regulations.
It should be noted that working hours do not include the time spent travelling to and from the place of employment. There are once again some exclusions. After working five consecutive hours, every employee is also entitled to one or more breaks. The breaks must last no more than an hour.
Private sector employers are required to adhere to these regulations and ensure compliance with the Wages Protection System.
Emiratization laws and policies in the private sector
The UAE is implementing a strategic plan to promote Emiratization in the private sector. This includes:
- A comprehensive federal programme called ‘NAFIS’
- Emiratization Programmes and Initiatives in Abu Dhabi – TAMM
- Emirates Nationals Development Programme
The UAE government has been instrumental in updating labor laws and implementing initiatives to enhance workforce participation.
Scope of the law
The law applies to all employees working in the UAE, whether UAE nationals or expatriates. However, it does not apply to:
- Employees and workers of the federal government and the local government entities
- Employees of the armed forces, police and security
- Domestic servants
The Ministry of Human Resources and Emiratisation oversees the implementation of these laws and ensures compliance across various sectors.
Labor claims, labor relations, and advisory call centre
Workers can seek assistance for any labor-related grievances or legal matters by contacting MoHRE’s ‘Labour Claims and Advisory Call Centre’ on the toll-free number 80084.
The UAE has established offices in courts to provide legal support to workers in labour disputes and labour care units have been established across the UAE to provide protection for workers and raise their awareness on their rights.
Workers are exempt from paying litigation fees for claims less than AED100,000. Articles 54 and 56 of the ‘UAE Labour Law’ spell provisions for individual labour disputes and collective labor disputes.
The unemployment insurance scheme provides a financial safety net for Emiratis and residents in both federal and private sectors, offering support during job loss due to employer termination.
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Employment contracts
Types of Employment Contracts
In the UAE, employment contracts are categorized into several types, including full-time, part-time, temporary, and flexible work arrangements. According to the Federal Decree Law No. 33 of 2021, all employment contracts must now be fixed-term, with a maximum duration of three years. This significant shift from indefinite contracts to fixed-term contracts has profound implications for both employers and employees. Fixed-term contracts provide a clear framework for the employment relationship, ensuring that both parties are aware of the contract’s duration and the terms of renewal. This change aims to enhance job security and clarity in the private sector, fostering a more structured and predictable work environment.
Probation Period
The probation period is a critical aspect of employment contracts in the UAE. As stipulated by the Executive Regulations, the probation period cannot exceed six months and is non-extendable. During this period, the employer has the right to terminate the contract without notice, providing an opportunity to assess the employee’s suitability for the role. Conversely, the employee can resign during the probation period with a 14-day notice period. If the employee successfully completes the probation period and continues working for the company, this period will be considered part of their overall service. This provision ensures that both parties have a fair opportunity to evaluate the employment relationship before committing to a long-term contract.
Leaves and holidays
Public Holidays
Public holidays are an integral part of employment contracts in the UAE. It ensures that employees have time to rest and celebrate significant cultural and national events. According to the UAE Labour Law, employees are entitled to a day off during public holidays. That include Eid Al Fitr, Eid Al Adha, Commemoration Day, National Day, and New Year’s Day. Employers are obligated to provide employees with a day off during these holidays. And, employees are entitled to their regular salary during this period. This provision underscores the importance of work-life balance and cultural observance. That ensures that employees in the private sector can enjoy these special days without any financial loss.
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