The biggest legislative reform in the history of the UAE
On November 15, 2021, the government has announced a set of new regulations (New UAE Labor Law) that aim to unify the labor system for the private and public sectors.
The Law-Decree 33 of 2021 on labor relations regulations is expected to come into effect on February 2, 2022.
These are some of the biggest changes since the labor law was introduced in 1980.
The Ministry of Human Resources and Emiratization (MOHRE) explains that this new law is a response to the rapidly changing work environment in the current Covid-19 context. It also aims to contribute to the well-being of employees within their work environment.
With these new decrees, public and private sector employees will have the same rights in terms of leave and termination benefits. In addition, employees will be able to apply for full-time, part-time, and temporary jobs.
What changes does the new law bring?
4 types of contracts are now possible:
- Full time
- Part-time
- Temporary
- Flexible
In terms of weekly working hours, weeks cannot exceed 48 hours, with a maximum of 144 hours worked every 3 weeks.
New categories of leave
With this new law, employees will be entitled to the following leaves
- Maternity leave: 60 days max (45 days full pay and 15 days half pay)
- Paternity leave: max 5 days to be taken intermittently or consecutively within six months of the birth of a child
- Leave for death of a close family member: 3-5 days
- Sick leave: 90 days max
- Training leave: 10 days max for employees who have to take exams, provided that they have already spent two years with their employer. For the moment we do not know if these leaves will be paid or unpaid.
End of services
- 21 days of base salary for the first 5 years with the company
- 30 days of basic salary after 5 years with the company
Employment contracts
Under Article 8 of the new law, employment contracts of indefinite duration will disappear. They will be replaced by fixed-term contracts of three years renewable.
- All employment contracts will be transformed into 3-year fixed-term contracts
- Permanent employment contracts no longer exist
1/02/2023: deadline for drafting new employment contracts
All private-sector employers are required to replace their employees’ current employment contracts with new contracts in accordance with the new law. Employers have one full year to make these changes.
Minimum wage
Article 27 of the new law will set a minimum wage. This is the first time in the UAE that a minimum wage has been introduced, which is unprecedented for the UAE. The amount of the minimum wage will be determined and announced by the UAE Cabinet upon the proposal of the Minister of Human Resources and Emiratization, in collaboration with the relevant authorities.
Condensed work weeks
This new law provides for the possibility of shorter work weeks through a condensed work hours model.
Section 65 of the current law states that the normal working hours in the private sector are 8 hours per day or 48 hours per week. The new law allows employers to accept condensed 4-day weeks of 10 hours of work per day for their employees.
This is in addition to the recent changes to the public sector to work four and a half days a week.
Working hours and overtime
It is strictly forbidden for an employee to work more than 5 hours in a row without taking a break of at least one hour. Only two hours of overtime are allowed per day per employee.
If the nature of the work requires overtime, then the employer must follow the following compensation:
- More than two hours of overtime: daily wage plus 25 percent
- If the overtime is between 10:00 p.m. and 4:00 a.m.: daily wage plus 50 percent
- Employees working 3 shifts are not affected by these changes
Non-competition clause
This new law allows the employer to sign a non-competition agreement between the employer and the employee. This agreement must specify the duration, the geographical scope, and the different types of employment to which it applies.
Notice of termination of the trial period
By the employer
The employer who decides to terminate the probationary period must give 14 days’ notice to the employee.
By the employee
As for the employee, the law requires a 1 month’s notice if he wishes to leave his position during the trial period. In this case, it is up to the new employer to compensate the former employer for the recruitment costs incurred for this employee.
Employees who wish to terminate their probationary period and leave the UAE may give 14 days’ notice. The same law stipulates that if the employee returns to the UAE within three months and joins a new employer, then the new employer must compensate the old employer for the recruitment costs incurred for the same employee.
Equal pay for men and women
In addition to the articles prohibiting discrimination on the basis of race, gender, religion, etc., the new law explicitly states that women shall be paid the same as men if they perform the same work or work of equal value.
Protection from intimidation and sexual harassment in the workplace
The employer may not force or threaten the employee with sanctions to obtain favors against the employee’s will.
Sexual harassment, intimidation, or any type of verbal, physical, or psychological abuse is totally prohibited.
In addition, any type of discrimination based on race, color, sex, religion, or disability is also prohibited in the workplace.
No more court costs
With this new law, employees or their heirs can file petitions or take legal action against employers without having to pay court fees. There is a limit: the value of their claim must not exceed AED 100,000.
In addition to this, the new law specifies that the employer cannot charge recruitment and visa fees to the employee under any circumstances.
Also, it is forbidden for the employer to keep/confiscate the official documents of their employees (passport, etc.).
The new law has not yet been officially published and we expect more details in the coming weeks.
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