MAJOR CHANGES IN THE NEW LABOUR LAW CODE OF THE UAE

On 2nd February 2022, UAE’s new Labour Law Federal Decree-Law No. 33 of 2021 came into effect and repealed the old Federal Law No. 8 of 1980 after more than 40 years. The New Labour Law will apply to all Establishments, Employers, and Workers in the Private Sector in the State., 
In addition to the Labour Law changes, the UAE government has shifted to a Monday–Friday work schedule (with a half-day on Fridays) for all government employees. 

Overview of the key changes made in the Labour Law- 

Protection against discrimination 

The new labour law provides protection for employees from discrimination in the workplace on grounds of race, religion, colour, sex, national origin, social origin, and disability 

Wrongful termination 

In the workplace termination due to redundancy that is when employers have to terminate one or more employees due to circumstances unrelated to job performance or behaviour is also considered a valid grounds for termination of an employment contract under the new law. There are additional grounds for termination, including where an employee abuses the position for profit/ personal gain; or commences work for another employer without complying with the rules as well as procedures. 

Overtime

The employer may instruct the worker to work overtime over the normal working hours, provided that the overtime does not exceed two hours per day unless the work is necessary to prevent the occurrence of a serious loss or a serious accident or to eliminate or mitigate the effects thereof. In any case, the total working hours shall not exceed (144) one hundred and forty-four hours every (3) three weeks.

Equal pay

The New Law explicitly supports that all provisions regulating the employment of workers without discrimination shall apply to working women, with an emphasis on giving women the same wage as men if they perform equal work or other work of equal value.

Flexible working models 

 Employees may undertake full-time, part-time, temporary, or flexible work. In practice, these models reflect the common working modes already implemented by many UAE employers.

Notice periods

Minimum notice periods are still 30 days but maximum notice periods are now capped at 90 days. The Employment Contract shall continue to be effective during the Notice Period referred in the law, and shall be terminated upon expiry of the period.

Weekly Rest 

The Worker shall be granted a paid weekly rest of not less than one day, according to the Employment Contract or the Work regulations. 

Currency of Salary Payments

Employers should pay employees’ salaries in any currency as specified in the employment contract.  All establishments registered with the Ministry shall pay the wages of their workers on their due date through the Wages Protection System or through any other system approved by the Ministry.

Annual Leave
The Worker may, with the approval of the Employer and in accordance with the applicable regulations in the Establishment, carry over the balance of his annual leave, or days thereof, to the following year. The Worker shall be entitled to Remuneration for the period of his annual leave.

Maternity Leave

The new Labour Law increases maternity leave entitlements to sixty calendar days; the first forty-five days are paid in full and the remaining fifteen days at one-half pay. Employees are now granted maternity leave and pay in circumstances where the employee suffers a miscarriage after six months of  pregnancy or the death of an infant after birth. Employees who give birth to disabled or sick children whose health conditions require constant companionship are entitled to an additional thirty calendar days of maternity leave with full pay, which can be further extended for an additional thirty days which will be unpaid.

Miscellaneous Leave

In the event of the death of an employee’s spouse, the employee is entitled to have five days of paid leave and in the event of the demise of an employee’s parent, child, sibling, or grandparent, the employee is entitled to have three days of paid leave.

Study leave

Employees with more than two years’ service who are affiliated or regularly studying with an approved UAE educational institution are allowed ten working days of study leave per year 

Minimum wage 

The New Law sets a minimum wage and the amount shall be announced by the UAE Cabinet following a proposal by the Minister of Human Resources and Emiratisation, in collaboration with the relevant authorities.

 Fees exemption 

Under the New Law, employees or their heirs may file petitions, and pursue litigation or enforcement orders against employers without incurring judicial fees at any stage of the process, as long as their claim does not exceed Dh100,000 in value.

Job-Search Leave

Employees are now granted one day of unpaid leave per week during the notice period to look for new employment.

End-of-Service Gratuity

As per the new law, employees will now be entitled to full EOSG (a sum of money paid to an employee at the end of a period of employment.) when they resign, provided they have completed at least one-year service.

Fixed-term employment contract

All employees must be employed on fixed-term employment contracts not exceeding three years, which can be extended for the same period or less. Employers have been provided with an ample time by the law to change the current contracts into a limited contract.

Conclusion 
There is a period of transition for employers throughout the UAE. This is because new contracts and procedural guidelines will need to be drawn, and employees must be made aware of the implications of the new law and how it directly affects them.

It can be seen that these significant changes have brought the UAE closer to the societal norms prevalent in other parts of the world and is certain to have a positive impact on the market. It is likely that this new labour law will encourage further foreign investment within the UAE, as well as increasing the talent pool, in turn contributing to the country’s continued economic diversification and future success

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