Major changes in the UAE labour laws are in view to make the UAE an exemplary country with regard to modern day laws. Several changes have been put into place to create a great working atmosphere while the employees remain protected.

A new decree was launched by the Ministry of Human Resources and Emiratisation on earlier this week that will regulate labour relations.

His Highness Sheikh Khalifa bin Zayed Al Nahyan, the President of the UAE issued this law and it will be put into effect on February 2, 2022.

The Federal Decree Law No. 33 of 2021 will govern the various categories that are included in the labour relations. Major changes have been announced regarding employee protection, contract management, leave roll-over and wage protection among others.

This new law is all set to replace the Federal Law No. 8 of 1980 in what is called a major amendment since the old law was enacted.

The Minister of Human Resources and Emiratisation, H.E Dr. Abdulrahman Abdulmannan Al Awar mentioned that this new decree is launched to protect the labourers and give them a conducive and competitive work environment in the UAE.

Coming to the major changes according to the Federal Decree Law No. 33, a comparative analysis is mentioned below with respect to their categories.

 

Type of Work arrangements

Present Law:

A part-time work arrangement with a company is permitted according to Ministerial Decision No. 31 of 2019.  As far as the remote working opportunity is concerned during the pandemic, several resolutions passed in 2020 made it possible for employees to work remotely.

New Law:

A prorated leave is recognised for employees working part-time in a company.

The concept of temporary work, where time plays a major role in employment is considered as a fixed term contract.

With remote working arrangement however, the employers will need to approve the employee’s ability to work remotely.

 

Three Year Fixed Term Contracts

Present Law:

Under the present law, two types of contracts exist.

An unlimited term contract, which would only end if terminated.

A fixed term contract, which would terminate itself when it has ended. The contract however, could be renewed by concerned parties.

New Law:

Employees will be put under three year fixed term contracts which should be renewed upon expiry. If the contract is not renewed upon expiry, the contract is considered to be extended as per the new law.

The employees that are presently under unlimited term contracts, fixed term contracts will be enforced after the new law is in effect. The existing unlimited term contracts must be converted to fixed term contracts by employers within a year of the new law being effective.

 

Termination of Contract

Present Law:

An employee can be terminated without notice under Articles 88 and 120. An employee’s contract that is terminated with notice under Article 120, his/her end of service gratuity will be forfeit.

The contract will be terminated if the fixed term contract has expired.

New Law:

Fixed term contracts can be terminated during the term for a legitimate reason. The employee is expected to serve the notice period of atleast 30 days to a maximum of 90 days.

In any case that the employer doesn’t want the employee to serve the notice period or if the employee doesn’t serve it, the party responsible for terminating the contract is liable to pay compensation to the other party. The compensation in this case must be equal to the employees’ salary during the notice period.

If the employer terminates the contract, the employee is legally permitted to get one day of unpaid leave per week to facilitate a new job hunt.

 

Unlawful Termination & Compensation

Present law:

Under the law that is existent now, only an arbitrary dismissal that is not related to field of work may be compensated.

New Law:

 Under the new law, arbitrary dismissal is not included. The law considers that there is an unlawful termination if the following conditions are met.

1. The employee lodges a complaint against the employer, thus leading to termination.
2. A case filed by the employee against the employer is upheld successfully.

 

Probation Period

Present Law:

A probation period can be a maximum of six months. The employment of an employee could be terminated without notice while the employee is on probation period.

New Law:

Employers have to give a minimum of 14 days notice period to an employee if they wish to terminate employment while probation is ongoing. However, the maximum probation period still remains at six months.

Equal Pay without Discrimination

Present Law:

Equal pay law for both men and women for the same work exists.

Women employees are protected from discrimination in case of dismissal due to pregnancy or maternity leave.

New Law:

Equal opportunity for every employee is promoted. Discrimination on grounds of race, religion, colour, gender, nationality and disability is condemned.

Terminations of women employees or even threatening to terminate their employment due to pregnancy of maternity leave are not tolerated.

 

Sexual Harassment & Bullying

Present Law:

There are no provisions under the law regarding sexual harassment and/or bullying.

New Law:

The new law have put clear cut rules against bullying, sexual harassment, verbal, physical or psychological violence towards an employee.

 

Leaves from Office

Present Law:

45 days of maternity leave is provided after which, 100 days of maternity sick leave could be applied.

Women employees can take two additional breaks a day for taking care of the child till it is 18 months old.

Unused annual leaves could be rolled over to the following year.

New Law:

60 days of maternity leave will be provided. While the first 45 days are paid fully, the rest of the 15 days are at half the amount paid.

Five days of Paternal Leave can be availed within six months of the child’s birth.

A study leave is also introduced to employees with more than two years of service. The employee can avail 10 days of study leave per year if he/she is studying in a UAE approved institution.

Employees are obligated to use their annual leaves in the same annual leave year. If the employment is terminated, the employees should get a payment based on their basic salary.

 

Currency of Salary Payments

Present Law:

All employees working in the UAE have to be paid in UAE Dirhams deposited into a UAE bank account.

New Law:

Agreements on employment contracts can now include currencies other than UAE Dirhams. In other words, salaries can be paid in other currencies in the UAE under the new labour law.

For more information please contact Sunil Ambalavelil, Legal Consultant. Email sunil@advsunil.com