New labour law in UAE

The new UAE Labour Law (Federal Decree-Law No. 33 of 2021), which came into effect as of 2 February 2022 to address changes in the work environment, align UAE labour relations with international best practices and recognise the need for a typical and/or flexible working structures. The New Law will replace Federal Law No. 8 of 1980 entirety, and it is the most significant amendment to UAE labour legislation since the Current Law’s enactment.

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    Scope of Application

    The new labour law provisions will be applicable to all establishments, employers and workers in the UAE private sector. However, there are certain categories of employees who will not be subject to the provisions of the new UAE labour law. They include;

    • Employees working in federal and local government offices
    • Employees of the armed forces, police and security; and
    • Domestic workers

     

    Key changes in UAE Labor law

    We have listed below a comprehensive review of the key changes and a comparison between the previous Labor Law and the New Labor Law.

     

    The Cabinet has the right to exclude any category from all or some of the provisions upon the Minister’s proposal.

    The companies in UAE must be updated about the changes in UAE labour law and the compliances that follow. Outsourcing your company’s payroll will ensure the assistance of a team of trained payroll professionals. HLB HAMT is a leading payroll outsourcing company that offers services across all the GCC nations. Contact us to know more about the changes in UAE labour law and the required compliance.

    Frequently Asked Questions

    1. Is an employment contract obligatory in the UAE?

      The new law makes it obligatory to determine employment contracts with fixed periods that cannot run longer than 3 years and can be extended for a similar period or shorter with each party’s approval. Previous labor law allows unlimited contracts to stay, but they must be converted to limited contracts within one year of the new legislation’s adoption, or by February 2, 2023.

    2. As per the new UAE labor law, how long is the probation period?

      Under the new labor legislation, the highest probationary period stays at six months. Employers should provide a minimum of fourteen days’ written notice of their intention to terminate an employee’s employment contract if the individual is on probation. Read more: – Probation period

    3. How is gratuity calculated in the UAE as per the new labor law?

      The law specifies how an employee’s gratuity will be calculated based on his or her length of service. Under the new legislation, an ex-pat who has worked full-time for a business for one year or more will be eligible for an end-of-service gratuity based on base salary. Each of the first five years of service will be remunerated with pay for 21 days, and each year thereafter will be remunerated with pay for 30 days.

    4. Is there really a deadline to give an employee his end-of-service payment?

      Yes, severance pay must be paid within 14 days of the termination of employment.

    5. What is compassionate or bereavement leave?

      Employees are entitled to compassionate, or bereavement leave in the event of the death of a member of their immediate family.

    6. How long may an employee be on compassionate leave?

      An employee may take up to 5 days of leave after the loss of a spouse or partner. Employees can request three days of leave if their parents, grandparents, siblings, children, or grandchildren pass away.

    7. Do UAE employees receive educational leave?

      Yes, UAE employees studying at one of the country’s accredited educational institutions are eligible for study leave.

    8. How many maternity leave days are allowed for UAE workers?

      A female employee in the UAE can take maternity leave for a maximum of 60 days, out of which 45 days will be fully paid leave and the remaining 15 days will be half-paid leave.

    9. Are new parents entitled to leaves in the UAE?

      A parental holiday for a period of (5) five working days is granted to the employee (either the father or the mother) who has a newborn child in order to take care of him. The employee is entitled to that leave for a continuous or intermittent period of six (6) months from the date of the child’s birth.

    10. What are the terms for employment contract termination notice in the UAE?

      The minimum notice for termination of an employment contract is still 30 days, but the maximum is now 90 days. Under the new law, redundancy termination is a legal reason for terminating an employment contract. There was no recognition of redundancy in the previous act.

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