The new UAE Labour Law of 2024 introduces several significant changes aimed at modernizing and aligning the country’s labour regulations with international standards. Here are the key takeaways:
- Employment Contracts:
- All employment contracts must be in written form, primarily in Arabic or bilingual with Arabic taking precedence. Contracts must include key details such as job title, duties, salary, hours, benefits, and entitlements (GulfNews)
- The previous indefinite term contracts are now converted into fixed-term contracts, which can be extended beyond the initial duration
- Reinforced Emiratization policy increases UAE nationals in the private sector, targeting a 10% ratio and encourages collaboration with educational institutions for internships and targeted recruitment.
- Introduction of a pioneering unemployment insurance plan provides financial safety for employees facing job loss; HR departments must ensure employees are informed about benefits, eligibility, and claims process.
- Clear guidelines for termination require a minimum 30-day notice period; HR departments must update procedures to ensure transparency and fairness.
- Enhanced decision-making authority for the Ministry of Human Resources and Emiratisation (MOHRE) expedites small-value disputes resolution and provides a streamlined pathway to the judicial system for larger disputes.
- Introduction of a 14-day probationary notice period ensures mutual understanding and respect during the probation phase.
- Reduction of typical working hours from 48 to 40 per week potentially enables a 4-day workweek; HR departments must update policies to comply with new working hours regulations.
- Expanded annual leave entitlements include bereavement leave, parental leave, and study leave; HR professionals must communicate these changes to employees and ensure awareness of their benefits.
- Revision of end-of-service gratuity calculation based on working days rather than tenure ensures fair compensation; employees are entitled to full gratuity even upon voluntary resignation.
- Stringent provisions against discrimination and harassment protect employees from various forms of abuse; HR departments must develop policies, conduct awareness campaigns, and implement reporting and investigation procedures.
- Employee Rights and Protections:
- Termination and Notice Periods:
- The law outlines specific procedures for contract termination, including required notice periods and settlement of outstanding salaries. It also ensures non-discriminatory termination with valid reasons
- Special provisions are included for resolving disputes, encouraging negotiation and mediation before legal action, and involving the Ministry of Human Resources and Emiratisation (MOHRE) in unresolved cases
- Free Zone and Domestic Worker Regulations:
- Employment contracts in free zones must comply with both free zone regulations and certain aspects of the UAE Labour Law, such as health and safety and end-of-service benefits.
- Domestic workers are now explicitly protected under the labour law, entitled to written contracts, weekly rest days, annual leave, and safe working conditions.
- Penalties for Non-Compliance:
- Employers face fines for violations such as failing to provide written contracts or withholding wages. Severe violations can lead to imprisonment and blacklisting from obtaining future work permits.
- Implementation and Compliance:
- Employers must update existing employment contracts to comply with the new law by the stipulated deadline. Non-compliance may result in legal consequences.
A Paradigm Shift in Employment Dynamics
The United Arab Emirates (UAE), a nation renowned for its progressive outlook and commitment to fostering a fair and equitable labour market, has unveiled a comprehensive overhaul of its employment regulations. This transformative legislation, set to take effect in 2024, represents a pivotal stride towards aligning the UAE’s labour laws with global best practices while simultaneously catering to the evolving needs of its diverse workforce.
As the nation’s economic landscape continues to flourish, the imperative to cultivate a transparent and inclusive work environment has become increasingly paramount. The UAE’s leadership, recognizing the pivotal role of a skilled and motivated workforce in driving sustained growth, has undertaken a meticulous review of its labour laws, culminating in a series of groundbreaking amendments.
These legislative revisions encapsulate the UAE’s unwavering dedication to safeguarding the rights and well-being of both employees and employers, fostering an atmosphere of mutual trust and cooperation. By embracing innovation and adaptability, the UAE has positioned itself as a beacon of progressive labour practices, setting the stage for a future where the aspirations of its diverse populace can flourish.
Emiratization: Empowering National Talent
One of the cornerstone initiatives introduced by the revamped labour law is the reinforced Emiratization policy. This strategic endeavour aims to bolster the representation of UAE nationals within the private sector, fostering a more diverse and inclusive workforce that harnesses the nation’s inherent talent pool.
Under the new regulations, private enterprises registered with the Ministry of Human Resources and Emiratisation (MOHRE) are mandated to gradually increase their employment of Emirati citizens, ultimately reaching a targeted ratio of 10% within the stipulated timeframe. This progressive measure not only promotes equal opportunities but also ensures that the UAE’s vibrant economy benefits from the unique perspectives and skills of its indigenous population.
To facilitate a seamless transition, HR professionals are encouraged to collaborate closely with educational institutions, cultivating internship programs and targeted recruitment strategies that attract qualified Emirati candidates. Additionally, investing in comprehensive career development initiatives, such as mentorship programs and specialized training, will empower Emirati employees to excel within their respective organizations.
Safeguarding Employment: The Unemployment Insurance Plan
Recognizing the ever-changing dynamics of the global labour market, the UAE has introduced a pioneering unemployment insurance plan. This forward-thinking initiative aims to provide a financial safety net for employees who find themselves in the unfortunate circumstance of job loss, mitigating the potential economic hardships that may ensue.
HR professionals play a pivotal role in disseminating information regarding this plan, ensuring that all employees are well-informed about its benefits, eligibility criteria, and the claims process. By proactively assisting employees in navigating the intricacies of the unemployment insurance system, HR departments can foster a sense of security and stability within the workforce.
Furthermore, a comprehensive review of redundancy procedures is essential to ensure alignment with the new regulations, promoting transparency and fairness throughout the termination process. This collaborative effort between employers, employees, and HR professionals underscores the UAE’s commitment to fostering a supportive and inclusive work environment.
Embracing Flexibility: Fixed-Term Contracts and Diverse Work Modes
In a bold departure from traditional employment practices, the UAE has abolished indefinite contracts, mandating that all employment agreements be structured as fixed-term contracts. This strategic shift aligns the duration of employment relationships with the validity period of residence visas for expatriate employees, typically ranging from two to three years.
HR departments play a pivotal role in navigating this transition, meticulously reviewing existing contracts and adapting them to comply with the new fixed-term structure. Clear communication and mutual understanding between employers and employees are paramount, with HR professionals serving as facilitators, ensuring that both parties are fully aware of the contractual terms, renewal procedures, and potential implications.
Complementing this shift, the new labour law introduces a range of flexible work modes, including full-time, part-time, temporary, and flexible arrangements. This progressive move acknowledges the diverse needs and preferences of the modern workforce, fostering a more inclusive and accommodating work environment.
HR teams are tasked with developing comprehensive policies that outline eligibility criteria, working hours, and expectations for each work mode. Leveraging technology that facilitates remote collaboration and seamless communication will be instrumental in supporting these flexible arrangements, enabling employees to strike a harmonious balance between their professional and personal lives.
Streamlining Termination Procedures: Fostering Transparency and Fairness
The UAE’s commitment to fostering a transparent and equitable labour market is further exemplified by the introduction of clear guidelines governing the termination process. The new law mandates a minimum 30-day notice period for termination, with a maximum duration of 90 days, ensuring that both employers and employees have ample time to prepare for the transition.
HR departments play a crucial role in ensuring compliance with these stipulations, meticulously updating termination procedures and communicating the notice period requirements within employment contracts. By providing support and guidance during this transitional phase, HR professionals can facilitate a smooth handover of responsibilities, minimizing disruptions to business operations while upholding the rights of all parties involved.
Resolving Labour Conflicts: Empowering MOHRE and Streamlining Dispute Resolution
In a bid to enhance the efficiency and effectiveness of labour dispute resolution, the UAE has empowered the Ministry of Human Resources and Emiratisation (MOHRE) with greater decision-making authority. This strategic move aims to expedite the resolution process, particularly in cases involving small-value disputes, where MOHRE’s rulings now carry the force of execution.
For disputes that exceed MOHRE’s jurisdiction or involve larger claim amounts, the legislation provides a streamlined pathway to the judicial system. HR professionals are tasked with educating employees about their rights and the available channels for dispute resolution, fostering an environment of transparency and open communication.
Collaboration between employers, employees, and MOHRE is paramount to ensure adherence to the new procedures, paving the way for a more efficient and equitable resolution of labour conflicts. This collaborative approach underscores the UAE’s commitment to upholding the principles of fairness and justice within its labour market.
Probationary Periods: Fostering Mutual Understanding and Respect
The UAE’s revised labour law introduces a 14-day probationary notice period, emphasizing the importance of providing employees with adequate notice before termination during the probationary phase. This change underscores the nation’s commitment to fostering a balanced and transparent approach to employment probation, ensuring that both employers and employees have a clear understanding of expectations and obligations.
HR departments play a pivotal role in facilitating this process, ensuring that employment contracts clearly outline the probationary notice requirements and that all parties are fully aware of their rights and responsibilities. By promoting open communication and mutual respect, HR professionals can cultivate an environment where both employers and employees can make informed decisions and foster positive working relationships from the outset.
Redefining Work-Life Balance: Reduced Working Hours and Flexible Schedules
In a groundbreaking move that underscores the UAE’s commitment to promoting work-life balance, the new labour law reduces the typical working hours for private organizations from 48 hours per week to 40 hours. This adjustment paves the way for a 4-day workweek, with a maximum of 10 hours per day, reflecting the nation’s recognition of the importance of personal well-being and quality of life.
HR departments are tasked with updating policies, contracts, and scheduling practices to ensure compliance with these new working hour regulations. By fostering an environment that prioritizes work-life balance, employers can cultivate a more engaged, productive, and satisfied workforce, ultimately contributing to the overall success and sustainability of their organizations.
Enhancing Employee Well-being: Expanded Annual Leave and Family Support
The UAE’s revised labour law introduces several enhancements to annual leave entitlements, reflecting the nation’s commitment to supporting the well-being of its workforce. In addition to regular annual leave, employees now benefit from a three-day leave following the death of close family members, intermittent or consecutive parental leave of five days within six months after the birth of a child, and a 10-day study leave for qualifying employees.
HR professionals play a pivotal role in communicating these changes to employees, ensuring they are fully aware of their entitlements and the procedures for accessing these benefits. By fostering a supportive and understanding work environment, HR departments can contribute to the overall well-being and job satisfaction of employees, ultimately enhancing productivity and fostering a positive organizational culture.
Equitable Compensation: Revisions to End-of-Service Gratuity Calculations
In a move that reflects the UAE’s commitment to fair and equitable compensation practices, the revised labour law introduces a significant change in the calculation of end-of-service gratuity. The new system shifts from a tenure-based approach to one based on the number of working days, ensuring that employees receive their rightful compensation upon the termination of their employment.
Moreover, the law now entitles employees to receive full gratuity even in cases where they resign voluntarily, further emphasizing the UAE’s dedication to upholding the rights and interests of its workforce. HR departments must adapt their processes for calculating and managing end-of-service gratuity, ensuring compliance with the new parameters and fostering transparency throughout the process.
Fostering Workplace Harmony: Combating Discrimination and Harassment
The UAE’s revised labour law reinforces the nation’s commitment to fostering a respectful and inclusive work environment by introducing stringent provisions against discrimination and harassment. These regulations protect employees from verbal, psychological, and physical abuse, as well as sexual harassment, regardless of the perpetrator’s position within the organization.
HR professionals play a pivotal role in promoting diversity, inclusion, and non-discrimination within their organizations. By developing comprehensive policies, conducting awareness campaigns, and implementing robust reporting and investigation procedures, HR departments can cultivate a workplace culture where every individual is treated with dignity and respect, free from discrimination or harassment.
Embracing Change, Fostering Growth
The UAE’s comprehensive overhaul of its labour laws in 2024 represents a transformative stride towards aligning the nation’s employment landscape with global best practices. By embracing innovation, flexibility, and inclusivity, the UAE has positioned itself as a beacon of progressive labour practices, fostering an environment where the aspirations of its diverse workforce can flourish.
As HR professionals navigate this transformative landscape, a proactive and adaptable approach is essential. By understanding and embracing the nuances of the new regulations, organizations can ensure compliance, foster positive employment relationships, and create an environment that supports the growth and well-being of both employers and employees.
The UAE’s commitment to continuous improvement and its unwavering dedication to upholding the rights and interests of its workforce set the stage for a future where the nation’s economic prosperity is inextricably linked to the empowerment and satisfaction of its diverse talent pool. By embracing these transformative changes, the UAE solidifies its position as a global leader in progressive labour practices, paving the way for a more equitable, inclusive, and sustainable future for all.
1. What is a Work Permit?
Work permit issued by the Ministry of Labor is a pre-requisite for employing any worker in any firm or organization. The permit is issued to the UAE employer after verifying the need for a new worker. The permit is issued only to licensed firms operating in the UAE and having membership with the Chamber of Commerce and Industry.
2. Who Could Get Employment in the UAE?
Any person aged between 18 & 60 years of age, having professional or academic qualifications useful to the UAE, medically fit and not suffering from any illness with a passport valid for at least six months could get employment in the UAE.
3. What Are the Expenses Charged to the Employee?
According to the UAE Labor Law neither the employer nor his agent can demand money from the worker except the placement fee. Charges towards Visa, Air tickets, transit accommodation etc. are all have to be borne by the UAE employer.
4. What Are the Important Things That Are to Be Noted Before Accepting the Employment?
Firstly, check on the Company offering the job either through a known contact in the UAE or through the Embassy in Abu Dhabi or the Consulate in Dubai and satisfy that, the company is exist and functioning.
Secondly, Verify the terms of contract you are signing with the employer to find out the following:
- What is the basic salary – Only basic salary counts for calculating the end of service benefits. At least 40% of your total salary should be your basic salary.
- No charges should be made for accommodation and transport from palace of stay to place of work and vice versa.
- Food allowance or providing free food should be clarified. The total salary should be calculated excluding the food charges, if any.
- What is the entitlement regarding Annual leave. How many days a year the leave is given?
- The cost of Air Tickets should be borne by the employer when you leave the country for joining and on completion of the contract to hometown.
- Details of other allowances?
- The employment contract should state the date of commencement of the contract, term, designation of the worker.
5. How Important is the Employment Contract?
i. For all purposes of reference, the details mentioned in the employment contract alone will matter. Only when the employment contract is filed with the Labor Department, the worker becomes recognized. The employment contract is also required for obtaining the Labor Card. Labor card provides the identity for the worker. When the employment contract is not registered with the Labor department, it could lead to many problems for the worker.
ii. As the worker arrives in the UAE, he/she should have an employment contract signed by him/her with the employer. The contract should be written in Arabic and English.
iii. The employment contract should be made in three copies, one to be kept with the worker, another with the employer and the third with the competent labor department (make sure you have your copy from the contract, and you should keep it throughout the contract term).
6. What is the Importance of a Labour Card?
i. The Employer should obtain a labor card for the recruited worker within 60 days of the latter‟s arrival to the UAE. Should the employer fail to do so, the worker should inform the Labor Department about his employment and entry. The Ministry of Labor could be approached via email or directly.
ii. The card is valid for three years renewable for a similar period, with the consent of the employer and the worker. The card should be renewed within sixty days from the date of expiry. The responsibility is with the employer to renew the card. Normally, it should be renewed within 60 days from the date of expiry.
7. Who Are the Private Recruitment Agencies?
There are several recruitment agencies licensed to recruit foreign manpower. These agencies are subject to specific conditions, they should not receive any fees from the workers in consideration of the brokerage to find them a job. These agencies receive remuneration from the employers, who ask them to call for labor from abroad.
8. What Are the Working Hours?
Normally the working hour is eight hours a day or 48 hours a week. These working hours may be decreased or increased in certain situation subject to the approval of the Ministry of Labor. During Ramadan the ordinary working hours will be decreased by two hours in. If he/she was required to work overtime between 9 p.m. and 4 a.m., he /she will receive 50% of his/her salary. The overtime may not exceed two hours except in cases of major force.
9. Is Friday a Holiday for All the Workers?
Friday is the weekend for all workers, except for the per day manpower. If the worker had to work on Friday, he/she should have another day to relax or receive the basic salary for the ordinary working hours plus at least 50% of that salary.
10. What Are the Entitlements Regarding the Annual Leave?
Normally two days for each month, if his/her term of service is more than six months and less than one year. Where the service extends beyond one year, thirty days a year is the norm. However, this should be included in the employment contract for enforcing the same.
11. When Can the Sickness Leave or the Medical Leave be Utilized? And How is it Computed?
After the completion of the probationary period, the worker becomes eligible for the sick leave. If the worker has spent three months of continuous service after the probationary period suffered from an illness, he/she would be entitled to a sick leave of no more than 90 consecutive or intermittent days for each year of service. It will be computed as follows:
A. First Fifteen Days = Full Pay B. Next Thirty Days = Half Pay C. Following Periods = No Pay
12. What is the Provision for the Maternity Leave?
A period of 45 days against a full pay, including the period before and after delivery is admissible wherever, the service
is more than a year. In cases where the entire service rendered is less than a year, the leave is admissible against an entitlement of half pay.
13. What Are the Other Leaves Eligible for the Workers?
a. Ten days of official holidays per year.
b. Hajj Leave: It is a special leave for Muslim workers granted once during the term of service. It is granted without pay and is not computed with the other leaves. It may not exceed 30 days.
14. What is the Compensation for Work-Related Injuries & Disabilities?
The UAE Labour Law makes it obligatory for the employer to meet all the medical expenses incurred wherever the employee has sustained injuries while on the job. In addition to this, full salary has to be paid to the employee undergoing treatment in full for the first six months or the completion of the treatment, whichever is shorter. Further, the employee should be given half pay for the next six months, in case the treatment continues beyond six months.
15. What is the Death Compensation?
If the work injury leads to the demise of the individual, the employer is obligated to pay compensation equivalent to twenty-four months’ basic salary subject to a minimum of AED 18,000 and a maximum of AED 35,000. However, if it is proved that the work injury was caused as a result of the negligence of the worker or any intended effort to harm him as in suicides, there will not be any compensation as per the Article 153 of the UAE Labor Law No. 8 of 1980.
16. How Will the Death Compensation be Distributed?
It will be distributed to his/her family members who are entitled thereto, in the following manner:
a. The widow or widows
b. The sons: The sons who are below 17 years of age and those who are regularly attending schools and have not completed 24 years of age, or those who mentally or physically are incapable to earn their living.
c. Unwed daughters
d. The parents
e. Brothers and Sisters
17. What is the Forum Available for Settling the Labour Disputes?
Initially, the complainant has to file a petition before the competent Labour department official. The Labor department will provide some time to settle the disputes between the complainant (worker) and the employer. After the expiry of this interval, the matter will be referred to Labor court by the Ministry of Labor. The report will have the complaint, the response from the opposite party and the views of the Labour Ministry. Then the case will be heard by the judge presiding over the court.
However, in the case of disputes concerning a group of workers, the reconciliatory committee in the Labor Ministry will handle the cases and try to solve the disputes amicably.
18. Is There a Time Limit for Filing Cases in Labor Disputes?
No case of labor dispute can be raised in any Labor court after a period of one year has passed since the occurrence of the event that led to the dispute.
19. When Can the Employment Contract be Terminated?
The employment contract could be terminated in any of the following situations:
- In the event of mutual consent by both parties to terminate the contract provided that the worker’s consent is made in writing.
- On expiry of the period specified in the contract unless the contract is expressly or implicitly extended in accordance with the provisions hereof.
- At the discretion of either party in employment contracts provided parties abide by the provisions of this Law regarding warnings and acceptable causes for termination of the contract without being arbitrary.
- The employer and the employee may terminate a contract for a valid reason, at any time after the conclusion thereof, by a written notice served at least 30 days prior to the termination.
As for the by-day workers, the period of notice shall be as follows:
A. One week if the workman/women have been working for more than 6 months but less than one year.
B. Two weeks if the workman has been working for at least one year.
C. One month if the workman has been working for at least five years.
- The employer may dismiss the worker without notice in the following cases:
A. If the worker adopts a false identity or nationality or if he/she submits forged documents or certificates.
B. If the worker is appointed under a probationary period and dismissal occurred during or at the end of said period.
C. If he/she commits an error causing substantial material loss to the employer provided that the latter advises the labor department of the incident within 48 hours from having knowledge of the same.
D. If the worker violates instructions concerning the safety of the place of business provided that such instructions are displayed in writing at conspicuous places and in case of an illiterate worker the latter be informed verbally of the same.
E. If he/she fails to perform his/her basic duties under the contract of employment and persists in violating them despite formal investigation with him in this respect and warning him of dismissal if the same is repeated.
F. If he/she divulges any secrets of the establishment where he/she is employed.
G. If he/she is awarded a final judgment by the competent court in respect of an offense prejudicing honor, honesty, or public morals.
H. If during working hours he/she is found drunk or under the influence of drugs.
I. If in the course of his/her work he/she commits an assault on the employer, the manager or any of his/her colleagues.
J. If he/she absents himself without lawful excuse for more than twenty intermittent days or for more than seven successive days during one year.
20. What Are the End of Service Benefits?
The worker, who has completed one year or more in continuous service, is entitled to the end of service benefit at the end of his/her service. Days of absence from work without pay are not included in computing the period of service, and the benefit is to be calculated as follows:
A. Twenty-one days’ pay for each year of the first five years of service.
B. Thirty days’ pay for each additional year provided that the entire total benefit shall not exceed 10 years’ pay.
The end of service benefit shall be computed on the basis of the last salary which the worker was entitled to, in respect of those drawing their salary per month, week, or day, and on the basis of the average daily wage stipulated in Article (57) in respect of those drawing their wages on a piecework basis. Allowances are not included.
If a worker under a contract has left his/her work at his/her own option after continuous service of not less than one year and not more than three years, he/she shall be entitled to two-thirds of the end of service gratuity provided for in the previous Article, where the continuous period of service exceeds 3 years but 5 years, he/she shall be entitled to two-thirds of such gratuity. If the period of his/her continued service exceeded 5 years he/she becomes entitled to the full benefits.
If a worker under a contract with limited period leaves his/her work before the end of the contract period he/she shall not be entitled to end of service benefits unless the period of his/her continuous service exceeds five years.
The worker shall be fully deprived of the end of service benefit in any of the following cases:
A. If he/she is dismissed from service for any reason in accordance with Article (120) of the Labour Law which is listed in Part VIII, paragraph 5 of this guide.
21. Who All Could Change the Sponsorship?
Employees who are not included in the following categories cannot change their sponsors.
- Engineers
- Doctors, pharmacists, and nurses
- Universities and higher college teachers
- Experts, legal consultants, economists, financial and management staff, who hold university higher degrees
- Computer/information system analysts and programmers, who hold university degrees in these fields
- Specialists and technicians in the field of oil and gas exploration and other related fields
- Athletes coaches for different sports
- Specialists in sea and air navigation
- Other categories subject to Ministry approval
22. What Are the Conditions Under Which the Sponsorship Could be Transferred?
- Worker or employee shall hold with the new sponsor the same occupation he/she used to hold with the previous Sponsor.
- Worker or employee should be a holder of a valid residence visa stamped on his/her passport.
- Worker or employee should have completed at least 2 years of service with the previous employer.
- Worker or employee should obtain no objection from his previous employer to transfer from the Sponsorship, after completing two years.
- No UAE or GCC citizen, who is registered as a job applicant with the competent authorities is available to occupy the job, subject matter of the visa transfer.
23. What is the Procedure for Repatriation After the Expiry of the Contract?
After the worker had completed his/her term of service at the UAE, he/she should make the arrangements to leave the State immediately, otherwise his/her residence will be deemed illegal. The Employer must take the following measures:
- Cancellation of the work permit
- The employer shall bear the expenses towards Air passage. In case, the worker had changes the sponsor in between, the last employer / Sponsor with whom he worked has to pay the coat of repatriation.
- In case employment is terminated for a reason blamed on the worker, repatriation shall be at his/her own expense if he/she has sufficient means.
- In case of death of the worker, the coffin shall be transported at the expense of the employer.
