The new labor law in UAE has been implemented

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    The UAE has issued Federal Labor Law No. 33 of 2021, which replaces Federal Labor Law No. 8 of 1980. The new law will enter into force on February 2, 2022, and will bring about a variety of reforms, some of which will have a considerable influence on current employment conditions.

    The labor law reforms are significant, necessitating adjustments to current employment contracts as well as rules and processes related to long-term contracts with new hires. The New Law governs all current and prospective work relationships in the UAE’s private sector. Since the Dubai International Financial Centre and the Abu Dhabi Global Market have their own labor laws, the new law will not pertain to work interactions there.

    The essential elements of the new labor law, some of the most significant changes are discussed below.

    A. Contracts of Employment

    The new law makes it mandatory to establish employment contracts with fixed periods that cannot run longer than three years and can be extended for the same duration or shorter with both parties’ approval. Existing labour law allows unlimited contracts to remain, but they must be converted to limited contracts inside one year of the new legislation’s adoption, or by February 2, 2023.

    B. Period of Probation

    Under the new labour legislation, the maximum probationary term stays at six months. Employers must offer a minimum of fourteen days’ written notice of their intention to terminate an employee’s employment contract if the individual is on probation, according to new legislation.

    If an employee wishes to quit during their probationary term, they must comply with the following requirements:

    • If resigning to work for another employer in the UAE, offer one month’s notice; or
    • If the employee intends to depart the UAE, offer fourteen days’ notice.

    C. End of Service Gratuity

    The legislation lays out in detail how an employee’s gratuity will be calculated based on their duration of service. According to the new legislation, an ex-pat who has worked full-time for a company for a year or longer will be eligible for end-of-service bonuses based on basic salary. Each of the first five years of service will be compensated with a salary of 21 days, with each subsequent year being compensated with a compensation of 30 days.

    D. Termination during the probationary period

    1.  The employee may cancel the contract during the probationary period by presenting at least one month’s written notice.
    2. An employer may terminate an employee’s contract during the probationary period by giving the employee 14 days’ written notice.

    E. Discrimination and harassment are prohibited

    It is unlawful for an employer, coworkers, or superiors to engage in sexual harassment, bullying, or any other form of behavioural, emotional, physical, or mental hostility towards an employee. Discrimination based on sex, race, colour, religion, national or social origin, or disability is prohibited under the new regulation.

    F. Parental Leave

    Employees will be entitled to five days of paid leave in the six months following the birth of their child.

    G. Leave of Compassion

    The legislation provides for five days of paid leave in the case of the death of an employee’s husband or wife. The law provides for three days of paid leave in the case of the death of an employee’s parent, child, sibling, or grandparent.

    H. Study leave

    Employees are entitled to 10 days of study leave per year if they are enrolled in a reputable institution, and such leave will be granted only if the university issues a certificate.

    I. Notice Periods

    The minimum notice time for terminating an employment contract is still thirty days, but the maximum is now ninety days.

    1. Termination Criteria
      Under the new law, redundancy termination is a legal reason for terminating an employment contract. Redundancy was not recognised under the previous legislation.
    2. Job-Search Leave
      During the notice period, employees are now eligible to one day of unpaid absence every week to search for new work.

    The UAE Cabinet is scheduled to release executive regulations, which would presumably offer much-needed clarification on the execution of the new law’s several new sections and amendments. Once the Executive Regulations are released, the modifications made by the new law must be carefully studied and reconsidered. The Ministry of Human Resources and Emiratization will continue to provide advice on a set of critical issues.

    To read about this topic in our quarterly magazine, please click the link.


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