The UAE’s new Labour Law has been formally Announced
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The UAE has introduced a new labour law for employees, which came into effect on February 2, 2022. The New labour Law, like the current labour law, will govern employee-employer relationships within all private sector enterprises and employees in the UAE, with the exception of the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM), which have their own employment rules.
What influence do labour regulations have on today’s workplace?
The law aims to improve the UAE labour market’s growth and stability, as well as protect employees’ rights. Substantial initiatives were undertaken to guarantee that all private-sector employees work in a pleasant, fair, and welcoming workplace.
The new labour law was enacted in order to react to the substantial change in the way UAE employees currently work as a result of technology improvements and the emergence of the COVID-19 pandemic. With the introduction of new provisions, the UAE’s new labour law aims to establish a more dynamic and efficient working environment, while also providing employees with additional safeguards against bullying and harassment in the workspace.
Several amendments to the old legislation, such as the introduction of three-year work contracts or new work models, have been made under the new labour law. It also includes many facets of employer-employee interaction in the UAE private-sector workplace.
The important components of the new labour law, as well as the key focal points for businesses, are listed here.
- Three-Year Contract – This is a limited/fixed-term contract that cannot last more than three years and can be renewed for the same period or less with consent from both parties. Unlimited contracts under existing labour law continue, but they must be changed to limited contracts within one year of the new legislation’s implementation, i.e., on or before February 2, 2023.
- Protection against discrimination and harassment – Sexual harassment, bullying, or any other type of behavioural, emotional, physical, or mental aggression against an employee by an employer, coworkers, or superiors is illegal. The new rule prohibits discrimination based on sex, race, colour, religion, national or social origin, or handicap.
- Equal pay for men and women – In the workplace, men and women should be paid equally. It underlines that women should be paid equally to men while executing the same activity or other duties of similar value.
- Period of probation – In comparison to prior labour laws, the new legislation states that if a person is recruited on a probationary basis not surpassing six months, the employer may cancel the worker’s employment during the probationary period by giving him a 14-day written notice prior to the date set for his termination.
- Termination by employee & employer during probationary period – During the probationary phase, the employee may cancel the contract by giving at least one month’s written notice. During the probationary period, an employer may terminate an employee’s contract by giving the employee 14 days’ written notice.
- Flexible Working Models – Full-time, part-time, temporary, and flexible employment options are available to employees.
- End of Service Gratuity – The law explains in detail how an employee’s gratuity will be computed depending on the length of their employment. According to the new regulation, an expat who has worked full-time for an enterprise for one year or more would be awarded end-of-service rewards assessed based on the basic pay. Each of the first five years of service will be paid a salary of 21 days, and each year beyond that will be given a salary of 30 days.
- Notice period – The new law requires a notice period of 30 to 90 days be issued. If both parties agree, this notification time might be waived as well.
- Parental Leave – In the six months following the birth of their child, employees will be entitled to five days of paid leave.
- Compassionate leave – Depending on the deceased’s degree of kinship, the employer may provide compassionate leave of between 3 to 5 days.
- Study leave – Every year, employees are entitled to ten-day study leave, provided they are enrolled in a university of repute, and such leave shall be provided only after providing a certificate from the university.
- Non-compete – According to the new UAE labour law, if an employer wants to preserve its business interests, it must enter into a non-compete agreement with its workers.
According to the UAE Ministry of Human Resources and Emiratization (“MOHRE”), the new UAE labour law is a solution to the constantly shifting labour setting in a COVID-19 society, which is characterized by technological breakthroughs. The Ministry of Labour and Employment is now drafting executive rules to supervise the execution of the revised labour law.
With the change in labour law, the need to re-draft existing HR policies and manuals arises. Companies are required to update employment policies, amend contracts, and possibly, use redraft their entire HR Policies and Processes to keep up with compliance requirements, and maybe other organizational changes that may have occurred in the past. Our team of experts at HLB HAMT can offer a diverse range of HR management solutions to help you stay up to date and compliant with the changes in labour law.
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