Understanding UAE Labour Laws 2025: A Guide for HR Professionals

 Starting a career as an HR professional in the United Arab Emirates (UAE) requires a solid understanding of the country’s labour laws. The UAE has a well-defined legal framework governing employment relationships, which ensures the rights and obligations of both employers and employees are protected. This article provides an overview of the key UAE labour laws that every HR professional should know before embarking on their career.

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1. The UAE Labour Law: Federal Decree-Law No. 33 of 2021

The primary legislation governing employment in the UAE is Federal Decree-Law No. 33 of 2021, also known as the UAE Labour Law. This law applies to all private sector employees in the UAE, except for those working in free zones (which have their own regulations) and certain categories such as domestic workers, who are covered under separate legislation.Key Provisions:

• Employment Contracts: Employment contracts must be written and clearly outline terms such as job role, salary, working hours, and benefits. Contracts can be either limited (fixed-term) or unlimited (open-ended).  ( Do you need a guide to make how to make employment contract?)
• Probation Period: The maximum probation period is six months. During this time, either party can terminate the contract with a notice period of 14 days.
• Working Hours: The standard working week is 48 hours, with a maximum of 8 hours per day. During Ramadan, working hours are reduced to 6 hours per day.
• Overtime: Employees are entitled to overtime pay for work beyond standard hours. Overtime is calculated at 125% of the regular wage, or 150% if the overtime is between 10 PM and 4 AM.
• Leave Entitlements: Employees are entitled to annual leave, sick leave, maternity leave, and other types of leave as specified by the law.
• Annual Leave: 30 days per year for employees with more than one year of service.
• Sick Leave: Up to 90 days per year, with varying pay (full pay for the first 15 days, half pay for the next 30 days, and unpaid for the remaining 45 days).
• Maternity Leave: 60 days of paid leave (45 days at full pay and 15 days at half pay).

2. Wages and End-of-Service Gratuity

• Wages: Salaries must be paid in the local currency (AED) and on a monthly basis, unless otherwise agreed in the contract. Delays in payment can result in penalties for the employer.
• End-of-Service Gratuity: Employees who complete at least one year of service are entitled to an end-of-service gratuity. The calculation is based on the employee’s basic salary and length of service:
• 21 days’ salary for each year of service for the first five years.
• 30 days’ salary for each additional year beyond five years.

3. Termination of Employment

• Notice Period: The notice period for termination is typically 30 days, but this can be extended to 90 days if specified in the contract.
• Termination by Employer: Employers can terminate an employee for valid reasons such as poor performance, misconduct, or redundancy. However, termination cannot be based on discriminatory grounds such as race, gender, or religion.
• Termination by Employee: Employees can resign by providing the required notice period. If they resign before completing one year of service, they may not be entitled to certain benefits like gratuity.

4. Non-Compete Clauses

The UAE Labour Law allows employers to include non-compete clauses in employment contracts, preventing employees from working with competitors for a specified period after leaving the company. However, such clauses must be reasonable in terms of duration, geographic scope, and the nature of the work.

5. Health and Safety Regulations

Employers are required to provide a safe working environment and comply with health and safety standards. This includes providing necessary training, protective equipment, and regular inspections to ensure workplace safety.

6. Discrimination and Harassment

The UAE Labour Law prohibits discrimination and harassment in the workplace. Employers must ensure equal opportunities for all employees, regardless of gender, race, religion, or disability. Harassment, including sexual harassment, is strictly prohibited and can result in severe penalties for the employer.

7. Employee Benefits and Social Security

• Health Insurance: Employers are required to provide health insurance for their employees. In Dubai, this is mandated under the Dubai Health Insurance Law.
• Pension and Social Security: UAE nationals are covered under the UAE Pension and Social Security Scheme, which requires both employers and employees to make contributions. Expatriates are not covered under this scheme but may have access to other benefits through their employment contracts.

8. Free Zone Regulations

Free zones in the UAE, such as Dubai Multi Commodities Centre (DMCC) and Abu Dhabi Global Market (ADGM), have their own labour regulations that may differ from federal laws. HR professionals working in free zones must familiarize themselves with the specific rules and regulations applicable to their zone.

9. Dispute Resolution

In case of disputes between employers and employees, the Ministry of Human Resources and Emiratisation (MOHRE) provides mediation services. If mediation fails, the dispute can be referred to the Labour Court. It is important for HR professionals to understand the dispute resolution process and ensure compliance with legal requirements.

10. Penalties for Non-Compliance

Non-compliance with UAE labour laws can result in significant penalties for employers, including fines, suspension of business activities, and even imprisonment in severe cases. HR professionals play a crucial role in ensuring that their organization adheres to all legal requirements.

Conclusion

As an HR professional in the UAE, a thorough understanding of the country’s labour laws is essential to ensure compliance and foster a positive work environment. By staying informed about the latest legal developments and best practices, HR professionals can effectively manage employee relations, mitigate risks, and contribute to the overall success of their organization. Whether you are working in the private sector, a free zone, or dealing with expatriate employees, being well-versed in UAE labour laws will set you up for a successful career in human resources.

This article provides a general overview of UAE labour laws and is not intended as legal advice.

 HR professionals should consult with legal experts or the Ministry of Human Resources and Emiratisation (MOHRE) for specific guidance on employment matters.