UAE Labour Law 2023

Starting in 2024, businesses in the United Arab Emirates will need to address a long number of issues related to HR rules and employment laws. As a result, you need to become aware of all the modifications made to UAE labor legislation, if you aren’t already. You will therefore be able to put them into practice and follow them.

UAE Labour Law 2023

All companies and workers in the private sector within the UAE, except those in the Dubai International Financial Centre and the Abu Dhabi Global Market, fall under the UAE New Labour Law. This includes entities in the nation’s free zones. The Dubai International Financial Centre and the Abu Dhabi Global Market are governed by separate employment laws.

The UAE New Labour Law has several unexpected modifications. Some changes in the UAE New Labour Laws lack clear rationales. It can be challenging to foresee how specific portions will work in practice. A significant portion of the details has been assigned to future executive regulations. Federal Law No. 8 On the Organisation of Labour Relations in the UAE established the legislation. The statute is accompanied by several decrees and resolutions.

These executive regulations are supposed to clear up any existing misunderstandings. However, companies affected by several crucial factors need to be aware of them. They will need to modify employment contracts, policies, and procedures.

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Employment Contracts

Contracts about employment are agreements between an employer and an employee. To set the work’s legal boundaries, these are essential. Depending on whether you work for the government or the private sector, different job contracts have different terms.

Private-Sector Work Agreements

There are two types of work contracts: full-time and part-time.

Employer-employee interactions in the private sector are governed by Federal Decree legislation No. 33 of 2021 Regarding the Regulation of Employment Relationship and its revisions, also referred to as the “UAE Labour law.” All private sector companies, workers, and employers are subject to the law’s rules.

Work Arrangements in the Private Sector

Various kinds of work arrangements are possible. The models are:

Full-time: This refers to working exclusively for one employer full-time.
Part-time employment entails working certain hours or days for one or more employers.
Part-time work: you are employed to complete a certain task, and your contract expires when it is finished.
Flexible work allows you to alter your working days and hours to suit the needs of your business.
Working remotely means carrying out all or some of the tasks away from the office.
Job sharing refers to the division and distribution of responsibilities among staff members as agreed upon. These contracts are subject to the regulations for part-time work.

Fixed-term contracts

An employee engaged on a fixed-term contract may be renewed or extended for an equivalent or shorter amount of time. Let’s say that notwithstanding the contract’s expiration, the parties still carry out their responsibilities. If so, the agreement is immediately extended for another term under the same conditions.

It is necessary to convert existing unlimited employment contracts into fixed-term employment agreements. A limited contract is sometimes called a fixed-term contract because of its length. The limited contract’s duration usually corresponds with the duration of the UAE residency visa that an international applicant requests.

Since that is the most common length, the contract may consequently be in existence for a period of two or three years. If the parties wish to keep their working relationship going, they must both agree on contract renewal.

Public Sector Employment Contracts

The following contracts are available for the public sector:

Full-time contracts require workers to put in their entire workday or night.
Employees under part-time contracts put in a set number of hours each working day or week.
Temporary contracts. the worker completes the agreed-upon number of working days or hours during the first three months of the contract, with renewal options.
Special contracts. A minister can designate an individual for a high position within the ministry or organization on a two-year contract that may be extended for an additional two years.

Probation Period in the UAE

In the UAE, the employer cannot grant probation for more than six months. The employee’s service includes the completed probationary period, and continuation of working for the company.

During probation, the employer needs to issue a notice period of fourteen days before terminating the contract. Let’s say that the worker leaves the UAE during their probationary period by resigning. In that scenario, they have to give a written notice 14 days in advance.

Let’s say the worker wishes to go to another UAE company and change careers. If so, they have to give a minimum of one month’s written notice. Unless otherwise agreed, the new employer must also cover the current employee’s recruitment expenses.

UAE labor law Benefits:

Minimum wage: In the UAE, there is no mandatory worldwide minimum wage or compensation for foreign workers. Educational attainment will determine the UAE nationals’ minimum wage and income.
Working hours: A typical workweek in the private sector is 48 hours long, or 8 hours each day. Public sector employees work four-hour days during the school and university workweeks. If employees have shifts lasting more than five hours, the employer must grant them one or more breaks during working hours. Working time does not include these breaks.
Overtime: There is a 125% rate for additional hours. On the other hand, it will go at a 150% pace on off-days and between 10 pm and 4 am.
Leaves: Sick leave, maternity leave, paternity leave, compassionate leave, pilgrimage leave, and study leave are some examples of these.
Severance benefit: Workers with more than five years of service will receive a month’s worth of pay as a severance benefit.
Insurance: When working in the UAE, employees and their families must have health insurance.

New form of benefits

Every employee receives at least thirty days of paid vacation time each year. This pertains to all employees, irrespective of their level of seniority.

Sick leaves. Employees can get up to 90 days of sick leave annually, if necessary. For the first fifteen days of work, there is no remuneration; after that, there is a salary distribution of half.
Maternity leaves. Future moms will get a 90-day or 3-month leave of absence for maternity reasons. However, paternity leave is also an option. This is a little less; the maximum duration for receiving a complete wage payment is 10 days.
Compensation for unfair termination. If an organization lays off an employee without cause, they must get compensation equal to three months’ worth of wages. However, the employee needs to have been with the organization for at least a year to access this.
Health Insurance. It is a legal requirement for all employers to offer health insurance to their employees. This has to pay for the workers and their dependents or family members’ medical costs over eighty percent.
Vocational training programs. Sometimes, employees must receive professional training programs that the government or their business can provide. One requirement for compliance is that these courses cannot have an impact on employees’ benefits or pay.
Prohibition of Harassment at Work. The UAE 2024 labor legislation stipulates that workers shall be shielded from harassment of any kind. regardless of the source of the harassment. That includes coworkers, employers, or superiors.

Emiratization

A recent initiative by the UAE government aims to increase the proportion of Emirati workers. The Emirati Talent Competitiveness Programme, or NAFIS, is a training initiative run by the government.

By 2025, the project wants 10% of private sector positions in the UAE to be held by Emiratis. The initiative will invest funds in hiring and training young, skilled Emiratis to accomplish this.

Termination of employment

Both employers and employees can terminate an employment contract. They can accomplish this by adhering to additional legal ramifications and serving a notice period.

Article 42 of the UAE Labour Law outlines the following circumstances under which an employer may terminate an employment contract:

The employer does not renew the work contract, and the period ends.
The employer and employee agree to end the contract in writing.
When one party decides to terminate the agreement, they both notify the other of the planned notice period.
The death of the employer may terminate the agreement.
If the worker passes away or is declared medically incapable of working, the employment agreement may terminate.
The employee must comply with a final court ruling that imposes a three-month minimum freedom-restriction punishment.
According to UAE law, the establishment of shutters is indefinite.
The employer experiences financial difficulties, bankruptcy, involvement, or other circumstances that make it impossible for labor to continue.
Without the employer’s consent, the worker does not meet the requirements to renew their work permit.

Notice Period for Termination

The following must be met within the notice period to end the contract for good reason:

An official notice
The terminating party gives a 30- to 90-day notice period.

Work Permit or Visa in UAE

The employer must obtain the work permit on behalf of the employees. The Ministry responsible for granting work permits in the United Arab Emirates is the Ministry of Human Resources and Emiratization, or MoHRE.

The employer prints the work permit application via the Ministry of Labor’s internet portal, Tas’Heel.
They turn in the necessary documents.
After reviewing their application, the Ministry requests the applicants to resend any missing documents or fix any anomalies.
The Ministry issues the approval, and the employer can download it from the Ministry website.

Canceling A Work Permit

If a worker’s contract expires, their employer may cancel their work permit. The employer needs to admit that it has paid the employee what they are legally entitled to. The employee’s signature must also be on the permit cancellation form.

There is a prohibition to work without a valid work permit in the UAE, according to the Labour Law.

Disciplinary guidelines

In the private sector, employers are free to impose disciplinary measures. These could be anything from a formal notice of impending termination to a warning of temporary suspension.

Considering the seriousness of the infraction, take the appropriate disciplinary action. Make the employees aware of the punishments as well. Sanctions are only applicable following an investigation and a hearing with the employer.

The Bottom line

The automated recording feature is one of the main components of HR systems. Compliance with labor laws depends on maintaining correct, up-to-date records. HR software enables businesses to efficiently manage, store, and retrieve vast amounts of employee data, including working hours, pay, benefits, and leave rights. HR staff can lower the possibility of errors that could result in noncompliance issues by automating these activities. Payroll and HR software offers automated notifications when there is a detection of violations. This helps enforce laws regarding overtime pay and breaks. HR software assists employers in keeping employees compliant and avoiding potential legal problems.

One of the best HR software is Elate HRMS. Elate HRMS Software complies with all UAE labor laws and regulations. Contact Penieltech for a free demo and consulting. Take your business to the next level.