A Complete Guidance on UAE Labor Law
The UAE government introduced a new framework for private-sector employees under the Federal Decree-Law No.33 of 2021 which came into effect on 2 February 2022. New UAE labor law replaced the previous law Federal Law No. 8 of 1980 by bringing a new shift in employees’ working models, leaves, gratuity schemes, right protection, and many others. Dr. Elhais said that:
“All private-sector employees and employers in the UAE, onshore and in the free zones, are subject to the new law, except for those in the DIFC and ADGM, which have their own employment legislation,”
As the United Arab Emirate is a giant hub of leading businesses, authorities are always concerned about creating a flexible work environment for everyone. The labor law UAE is intended to strengthen the employees’ basic rights and guarantee a safe & secure business environment in all the Emirates. The implementation of labor law will resolve many existing areas of uncertainty in the private sector. This amendment will impact positively on individuals and corporations in the long run.
11 Important Highlights of UAE Labor Law
The UAE labor law is introduced with a lot of unexpected changes in the current working model. To maximize the benefits of the new labor law, private-sector employees need to understand it clearly. Let’s discuss some important aspects of the New Law:
1. Discourage Gender Biasness
The new labor law set out provisions for non-discrimination in the workplace. The cabinet decision stated that no difference on the basis of individuals’ race, color, sex, religion, nationality, social origin, or disability. Especially in the UAE labor law, women who perform on the same level as men are paid equally. However, employers must take this reform into consideration while hiring and during the working period.
2. New Gratuity Schemes
As a result of the new labor regulations, the UAE labor law gratuity schemes are calculated based on the number of years worked. This provides monetary benefits to private-sector employees at the end of their service period. As per new Law 21 days salary to be paid for every year of work upto 5 years and 30 days of salary for every year after years of work..
3. Condensed Weekly Hour Facility
The new labor law affirms that employees can condense their weekly working hours. In accordance with the current law, private-sector employees had to work for 8 hours per day or 48 hours per week. UAE labor law enables employees to complete their tasks in 40 hours per week over 3-4 days under the condensed model. While this latest provision will ease employees’ workloads by reducing their weekly hours, the quality of their work will not be compromised.
4. Changes in Working Patterns
For the first time in the UAE, an employee can do two parallel jobs at the same time. Under the new labor law, employees work part-time, temporary, and flexible work along with their full-time job without the employer’s permission. Their only requirement is that they have a temporary work permit and do not work for more than 144 hours every three weeks.
5. Allowed Limited Contracts
As per UAE labor law Article no (8), limited contracts will be allowed for at least three years with the consent of both parties. The unlimited contract should be replaced with fixed-term employment contracts before February 2, 2023.
6. A Minimum Wage
In the previous labor law, private sector employees didn’t stipulate minimum wage from the UAE government. The new UAE labor law 2022 set out a minimum amount of wage to fulfill the basic needs of private-sector employees. Under the Cabinet decision by the Minister of Human Resources and Emiratisation, this reform is practically implemented after 2nd February 2022. Employers will be bound to the minimum wage threshold, which protects the rights of low-skilled workers.
7. Probationary Period
In the previous law, the employment contract could be dismissed only on the one-day notice during the probationary period. However,the new UAE labor law termination plan is made to facilitate employers as well as employees. Both parties must notify one another 14 days before terminating an employment contract during the probationary period. In this reform, employees will not be allowed any paid sick leave during his/her probationary period.
If the employee wants to switch jobs during probation, which is at least a 6 month period, he must submit a month’s notice. Employee’s new employer must also reimburse the company for recruiting costs.
8. Amendments for Leaves
Maternity leaves: Under the UAE labor law, the mothers working in the private sector will be entitled to receive longer maternity leaves for the first time. She is eligible to get 45 days of paid leaves and the next 15 days with half salary. Employees who suffer pregnancy-related illnesses will be eligible for an additional unpaid leave of 45 days.
Parental Leaves: The parental leaves for 5 days can be taken within six months of the baby’s birth.
Disability Leaves: An employee who has a baby with a disability may be entitled to an additional 60 days of full pay while on leave.
Study Leaves: Part-time postgraduate students are allowed 10-day study leaves per year, to take their exams, provided that they complete two years of work with the employer.
Compassionate Leaves: For employees who lose a spouse, they will be eligible for five days’ paid leave and three days’ paid leave for their parents, children, siblings, grandchildren or grandparents.
9. Employment Dispute Resolution
In the new labor law, the employees who will file a dispute case to higher authorities with a value not higher than AED 100,000 are now exempt from court fees. This applies from the initial filing to the final hearing and is helpful for private-sector employees to claim their case. An interesting insight is that a group of employees can collectively file a dispute through the Ministry of Human Resources and Emiratisation.
10. Regulatory Sanctions
The New Labor Law sets a layout for employers on how to legally deal with the worker’s performance-related issues. If he does not meet the standards of work quality, the employee receives a formal letter of disapproval. Employers have the right to take deductions from employees’ paychecks (but not more than 5 days’ pay per month) and to suspend them for up to 14 days. Detailed information is shared in the Implementing the new law section.
11. Harassment Protection
Any form of harassment, bullying or any physical or mental violence directed at employees is totally prohibited in the new reform. Such regulation will prevent many unpredictable incidents at work.
Steps to Take Next?
UAE Labor law offers many advantages to private-sector employees, but it requires expert advisory and knowledge. The management should amend their HR policies to implement this new labor law at the workplace. Contact the best consultants in Dubai!
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