The UAE Labor Law (Federal Decree-Law No. 33
of 2021), which came into effect on February 2, 2022, replaces
the previous labor law (Federal Law No. 8 of 1980). It introduces significant
changes to modernize the UAE's labor market, enhance employee protections, and
align with international labor standards. Below is a detailed summary of
the key provisions that every HR professional must know:
Recommended Book for the new managers:
1. Scope of Application
- Applies
to all private sector employees in the UAE, including free zones (unless
specific free zone regulations state otherwise).
- Excludes
employees of federal and government entities, domestic workers, and
agricultural workers (covered under separate laws).
2. Employment Contracts
- Types
of Contracts:
- Limited
(Fixed-Term) Contract: Maximum term of 3 years, renewable
by mutual agreement.
- Unlimited
Contract: No longer applicable under the new law.
- Contracts
must be written in Arabic, with an optional translation in another
language.
- Employers
must provide a copy of the contract to the employee.
3. Probation Period
- Maximum
probation period is 6 months.
- During
probation:
- Either
party can terminate the contract with 14 days' notice.
- Employees
cannot switch employers during probation unless agreed upon by both
employers.
4. Working Hours and Overtime
- Standard
Working Hours: 8 hours per day or 48 hours per week.
- Overtime:
- Paid
at 125% of the basic salary for weekdays.
- Paid
at 150% of the basic salary for weekends or public
holidays.
- Ramadan
Working Hours: Reduced by 2 hours per day.
5. Leave Entitlements
- Annual
Leave:
- 30
days for employees with more than 1 year of service.
- Pro-rated
for employees with less than 1 year of service.
- Sick
Leave:
- Up
to 90 days per year (fully paid for the first 15 days,
half-paid for the next 30 days, and unpaid for the remaining 45 days).
- Maternity
Leave:
- 60
days (45 days fully paid, 15 days half-paid).
- Additional
unpaid leave of up to 45 days for illness related to
pregnancy or childbirth.
- Parental
Leave:
- 5
days of paid leave for both parents within 6 months of
childbirth.
- Study
Leave:
- 10
days per year for employees enrolled in accredited UAE
institutions.
6. Termination of Employment
- Termination
by Employer:
- Requires valid
reasons (e.g., poor performance, misconduct).
- Notice
period of 30 to 90 days, depending on the contract.
- Employees
are entitled to end-of-service benefits.
- Termination
by Employee:
- Requires 30
days' notice for limited contracts.
- Employees
can resign without notice if the employer breaches the contract.
- End-of-Service
Gratuity:
- 21
days' salary for each year of service (first 5 years).
- 30
days' salary for each year of service (after 5 years).
- No
gratuity for employees terminated for gross misconduct.
7. Non-Compete Clauses
- Non-compete
clauses are enforceable if:
- They
are limited to 2 years.
- They
are reasonable in scope and geographic area.
- They
protect the employer’s legitimate business interests.
8. Discrimination and Harassment
- Prohibits
discrimination based on race, color, sex, religion, nationality,
or disability.
- Employers
must provide a safe and harassment-free workplace.
9. Wages and Payment
- Salaries
must be paid in AED through the Wage Protection
System (WPS).
- Employers
must pay salaries at least once a month.
- Deductions
from wages are limited to 50% of the salary.
10. Health and Safety
- Employers
must provide a safe working environment.
- Employees
must comply with health and safety regulations.
11. Part-Time and Flexible Work
- Allows
for part-time, temporary, and flexible work arrangements.
- Employees
can work for multiple employers with proper approvals.
12. Employee Records
- Employers
must maintain accurate records of employees, including:
- Personal
details.
- Employment
contracts.
- Salary
payments.
- Leave
records.
13. Dispute Resolution
· Labor
disputes must be resolved through conciliation at the Ministry
of Human Resources and Emiratisation (MOHRE).
· If
unresolved, disputes can be referred to the labor courts.
14. Emiratisation
· Employers
must comply with Emiratisation quotas to increase the
employment of UAE nationals in the private sector.
15. Penalties for Non-Compliance
- Fines
for violations of the labor law range from AED 5,000 to AED
1,000,000, depending on the severity of the offense.
- Repeated
violations can result in license suspension or cancellation.
Key Takeaways for HR Professionals
- Ensure
all employment contracts comply with the new law.
- Implement
policies to prevent discrimination and harassment.
- Stay
updated on leave entitlements and end-of-service benefits.
- Use
the Wage Protection System (WPS) for salary payments.
- Train
managers and employees on the new labor law provisions.
This summary provides a comprehensive overview of the UAE
Labor Law (Federal Decree-Law No. 33 of 2021). For specific cases or further
clarification, consult legal experts or MOHRE guidelines. Let me know if you
need help with any specific aspect!
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