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Labor and Employees Rights in UAE

Most employees working in the UAE are not familiar with the laws governing that employment and the significant differences that will exist from their home country. This is particularly evident in the case of termination of an employee.

All matters relating to employment relations in the private sector are governed by Federal law No 8, 1980. When looking to hire someone, the employer has to follow specific procedures including obtaining a residence visa for the employee.

All expats that reside in the UAE and are hired by a company (license holder) on residence visa will also need to obtain a labor card.

The application of labor law generally favors the employee in the event of a dispute. This essentially means that any contractual provisions made by the employer (side contracts, local contracts for example) other than the UAE law will not be considered and the law of the land would prevail, unless those provisions were in the favor of the employee. Common examples of additional contractual provisions that are often contained in side contracts may include, lower gratuity, extended probation periods (more than six months) or notice periods other than between 1 and 3 months.

In general, there are 7 specific rights of labor that must be adhered to:

1- Annual leave – entitled 2 days leave for every month after finishing probation period

2- An air ticket to home country

3- Salary to be paid for full notice period

4- Over time should be paid (over and above the limits of UAE labor law)

5- All earned salary must be paid up to date

6- Compensation to be given for unfair termination

7- Gratuity to be paid at the end of service (unless specific reason for termination under article 120, gross misconduct)

Important: There can be other additional rights as well but employees will only be entitled to the above rights if they complete their probation period as agreed.

Top 5 Articles on UAE Laws

When searching for information on law and legal services on the internet, you will indeed find many examples and variations on many if not all themes. The tricky part is knowing which ones are still correct today (the law changes and have the articles you are reading been updated accordingly?). We are continually contributing to the web with our latest articles to help researchers find the information they need and, very importantly to assist those searching for reputable and knowledgeable law firms in Dubai. Below is a list of few articles submitted by Al Riyami Advocates and Muheyeldin International Legal Consultants,

1- Adoption laws in UAE – There are a growing number of cases of adoption in UAE due to the fact that women tend to fear to bear a child outside the marriage. The cause makes them abandon the child leaving them for adoption.

2- Establish a Company in Dubai – Whether it is connecting airlines or sea ships that dock at the port all made Dubai an important international destination. People from all over the world now want to setup their local branch to make entry into this newly built market.

3- Property Laws in UAE – A recent real estate sector boom resulted in increased property demand and prices. The laws relating to property in UAE can be complex so you should be familiar and careful.

4- Divorce in UAE – The UAE has the highest divorce rate in the region with Dubai being the top contributor. Top reasons for a divorce in UAE and Dubai include fights among families.

5- UAE Drug Laws – Drug law in UAE has recently been changed; they have lowered the punishment for the first timers! Options other than jail include sending them to a rehabilitation center; make them pay a 10,000 Dhs fine or community service.

What can you Inherit in the UAE

The question of inheritance is raised frequently, particularly regarding what happens if a family member dies and has not made a will. In that situation, the law of the country in which you are residing will have a major impact on any inheritance and the distribution of the deceased assets. Making a will can ensure that assets are distributed according to the wishes of the deceased but it is relevant to note that some types of assets may still fall under the laws of the land in which you are residing (for example, immoveable assets).

In the UAE, if a non-Muslim dies leaving assets which have to be distributed among their heirs, as per Article 17/1, a request has to be made to the court to follow their home country laws, failing which, the assets will be distributed according to Sharia law. Moreover, Article 17/5 has put some limitations on the freedom of disposition of assets which include properties here in UAE.

Below is an example which will explain the beneficiaries under Sharia law,

Case 1:
If the deceased person has a family of father, mother, wife and three children (1 brother and 2 sisters) then,
1/8 share will be given to wife, 1/6 share will be given to mother and father and the remaining share will be divided among brother and sisters where the brother will get double the amount of the shares the daughters are entitled to.

Case 2:
If the deceased does not have any children then,
1/4 share will go to wife, 1/3 share will go to mother and the remaining assets will pass to the father

Case 3:
If the deceased has no wife or children but a surviving father and mother then,
1/3 share will be given to the mother and the remaining wealth will be given to the father

Case 4:
In the event the deceased is survived solely by his mother and wife
1/3 + R will be given to mother and 1/4 + R will be given to wife

Case 5:
Where the deceased leaves behind a father, mother, wife, and daughters,
Daughters will get half of the total amount whereas 1/6 share will be given to the mother, 1/8 share will be given to wife, the and 1/6 share plus the remaining amount will be given to the father

Case 6:
If survived by a father, mother, wife, and son,
1/6 share will be given to the father, 1/6 share will be given to the mother, 1/8 share will be given to wife and the remaining amount will go to the son.

Case 7:
If there are no parents and only a wife and children assuming there is a son then the wealth will be distributed among them. In case there is no father and son then uncles will also take the share and the equation will be,
1/6 share will be given to the mother, wife will be given 1/4 share and the remainder will be distributed among the siblings (paternal brothers only)
If there is a daughter and not a son then it will be as,
1/6 share will be left to the mother, 1/8 share to the wife, half to be equally distributed among the daughters and any remainder will be passed to the siblings (only brothers).

Laws of Adoption in UAE

There are a growing number of cases where adoption is authorized in the UAE. Entering a sexual relationship outside of marriage is a crime in the UAE and offenders may face serious criminal charges. Sadly, in some instances, children born from such relationships are sometimes abandoned to avoid these circumstances but the law makes allowances for these children to be taken care of.

Under Islamic Law, it is forbidden to adopt a child because it interferes with ancestry but it allows that an abandoned child can benefit from the love and care of a family. In such circumstances, a court order is required to give that child the family name of the adopting parents.

UAE nationals are not permitted to adopt but expats may do so if the law of their home country gives them permission to do so. The option allows expats residing in UAE to adopt children from countries other than UAE provided they follow all the rules and regulations governing the process.

The UAE law is structured to support an abandoned child and may even give UAE citizenship and a passport in some cases, according to Article 2(e) of the Federal Law (1975).

Establishing a Company in Dubai

The growth of Dubai over the last 15 years as an economic hub has been prolific.  Whether wishing to establish a branch of an existing business to utilize the strategic geographical location or looking to start a new venture in the region, setting up a company in Dubai can take as little as one working week.

To simplify the process, there are a number of steps to be considered and prepared for to make it as smooth as possible.

  • The business type and activity will determine which category of business license will be required and should be reflected in the trading name selected.
  • The structure and type of license may also be determined by th business activity your business will cover. Some businesses, Law for example cannot be licensed as a sole proprietor.
  • As an expat, if you wish to have 100% ownership of the company, it will need to be formed in one of the Freezone authorities which will in turn have restrictions on where and who you can conduct business with.
  • To establish a license and carry out business in mainland Dubai, you will need to apply for a trade license from the Dubai Economic Department. This license will require you to have a local partner or sponsor who, by law, must hold a minimum of 51% ownership of the company.
  • The particulars of how the company will operate in terms of profit and loss will be determined in the legal documentation (Memorandum of Association). Speak to your legal advisor to ensure your documentation adequately protects your interest in the business.

When to pursue a case in the Court!

If you have any dispute against you such as property disputes then you have to hire a lawyer, take it to the court and fight for your rights. The question may arise in your mind about the investment you will make and the time you will spend, is it worth it?

Whatever the situation is the law firm which possesses experienced lawyers can predict or evaluate the outcome, and for that reason, you need to make the relationship between the plaintiff and the client excellent.
There are few things you need to consider for the dispute,

a- Law to be applied
b- Jurisdiction of the local courts
c- Evidences

Finally, we should evaluate the chances of execution of judgment in our favour and the reward. This will all depend on,

a- Is it a person or an independent body (a company or an establishment)?
b- Does that person or independent body has enough assets to be taken over in case if he refuses to execute the judgment
c- What is the type of independent body, is it a company or an establishment? And what are its types

Cheques

There has been much discussion relating to the issue of cheques in the UAE, particularly when related to security cheques. Historically, this has been a bone of contention for many where security cheques have been banked where the drawer would contest that it was done so correctly. A cheque can be made ‘conditional’ meaning specific requirements should be met before it can be encashed. If the drawer fails to fulfill any of the required conditions then he or she won’t be able to encash the cheque (note of caution, it will be valid after its due date). Below are some points you should know about cheques,

1- According to new rules, cheques are valid for 3 months from the date of issue.

2- The period to register a ‘bounced’ cheque complaint can be upto 5 years beginning from the day the drawer issued it to the beneficiary.

3- If the holder of the account signs his cheque and leaves it blank for the amount to be drawn and the due date to be entered, they are tacitly authorizing the beneficiary to fill those details in as required.

4- The person signing a company cheque is legally responsible for its validity even after he or she leaves the company.

5- Alteration of cheques is strictly forbidden by banks to avoid fraud.

6- In the event not enough funds are available in the account for the amount of an issued cheque, a request can be made to pay the remaining partial amount to the beneficiary

7- The cheque, if bounced can be considered a criminal act. This includes insufficient funds in the account, deliberately writing the cheque in such a way as to make it invalid, making an order to the bank not to make a payment or issuing a cheque from a closed account.

8- If you lose any of your cheques, you should use the stop payment facility offered by the banks to avoid issues arising from anyone misusing them.

Laws relating to Property in UAE

The relaxation of the law allowing expats to purchase property and resulting boom in property demand and prices in the mid ‘noughties’ was shortly followed by the infamous 2008 collapse of the market. The subsequent cautious recovery highlights the complexity of UAE property law and the requirement to exercise buyer caution more widely appreciated.

According to UAE law, you may buy a property from a developer ‘off-plan’ by paying a 10% to 15% down payment with the balance payable over a period determined either by milestones in development or even, in some cases after the completion and handover of the project. It is imperative you ensure that the developer you are committing to is registered with the Dubai Land Department and that any payments are made to an escrow bank account.

Understanding the documentation involved and what rights and protection it offers all parties varies depending on the quality of that documentation. Make sure you fully understand the commitment and expectations before signing these documents.

If you choose to employ the assistance of a broker in making a purchase (or indeed if one is forced upon you by the developer), you will need to clarify that they are registered with RERA. You can do this by asking to see their ID card or simply visit the Land Department for verification.

Another important document in a property transaction is the Sale and Purchase Agreement which will form the ‘contract’ of your commitment to purchase as well as the parameters and commitment for the developer to build and deliver the project.

Ensure that the agreement clearly outlines and determines the date for completion of the project, actual milestones to be reached to trigger any payments and the penalties and exit clauses if these are not met. You will also need to understand which court is authorized to hear any dispute should future problems arise.
As purchasing a property is one of life’s ‘major’ purchases, please engage the assistance of professional legal counsel to protect your investment.

After Effects of Divorce in UAE

There is no escape from the after effects of a divorce in UAE. The rules and laws for divorce in your home country can apply here in the UAE according to Article 1 of ‘UAE Personal Status Law’ (commonly known as ‘Shariah Law’).

As an expat you may be unclear of many areas of the law, particularly in relation to divorce and court proceeding in the UAE. There may also be complications relating to claiming legal rights for the husband, the wife and the children.

As a Muslim man you can divorce your wife by saying ‘I divorce you’ three times and you will be separated according to the UAE law. However, women cannot do the same. There are provisions to allow a Muslim woman to divorce her husband for incidences such as domestic violence or inability or failure to provide financial support. Another method for a woman to divorce from her husband is Khula. It should be remembered however that if following this path, she will lose the dowry (the money to be paid by her husband for releasing her from the marriage).

How to file for divorce proceedings? This will depend on the specific details of the case. If, for example, a woman is earning money to support the family and has family assets in her name, Dubai court could be the most beneficial place to file if the intention is not to pay money to her husband. This path would also help in ensuring she retains custody of the children and she keep all her assets in her name.

UK courts can be more beneficial if a husband was earning to support the family, you have joint assets and if you need to consider pension earnings now or in the future.

In reality, there isn’t one solution that applies to all cases and it is imperative that you seek professional guidance that is tailored for your specific circumstances.