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New UAE Labor Law 2022

New UAE Labor Law 2022

Changes In The UAE Labor Law | The New Labour Law In The UAE 2022 As Stated By The Ministry Of Human Resources & Emiratisation

Federal Decree-Law No. 33 of 2021 governing the regulation of labor relations that took effect on Wednesday, February 2, 2022, on all establishments, employers, and workers in the private sector across the country has replaced Federal Law No. 8 of 1980. This new Law aims to improve employment practices in the UAE so that it meets worldwide standards for employees.
According to Dr. Abdul Rahman Al Awar, Minister of Human Resources and Emiratisation, the new law helps establish the UAE labor market’s position as one of the vital global labor markets in the region. The new law would provide versatility, and attract more skilled individuals while ensuring the rights of both employers and employees are well understood and protected.

The following are some of the most significant changes that the new Law will bring about.

Flexible Working Arrangements

Introduced with the new Law are alternative flexible employment arrangements.

  • Temporary work is suitable when the length of the employment duration is limited by time or a project goal. This appears to be a comparable situation to what fixed-term contracts give under current law.
  • Flexible work is stated as work hours and/or days that vary based on the workload and other operational factors.
  • Part-time employment is clearly established as when an individual works for one or more employers for a specific number of hours or days, and part-time employees will be entitled to pro-rated vacation leave.
  • A rather new work arrangement is Remote work, where all or part of the work is done outside the workplace rather than being physically present, whether part-time or full-time
  • And finally, Job-sharing work, where tasks are divided among several workers to complete previously agreed responsibilities. Equal distribution of salary is payable to each of them. Part-time workers are treated according to part-time job standards.

Furthermore, while there are no explicit requirements for remote / home-based working arrangements, it permits an employee to work remotely (from inside or outside the country) with the employer’s consent.  This is a positive step that responds to the working environment in the wake of the COVID-19 pandemic.

Changes In Employment Contracts

Unlimited employment contracts must now be transformed into fixed-term employment contracts within one year of the Decree’s effective date, with a three-year maximum time. By mutual agreement, the contract may be extended or renewed for additional shorter or longer periods after the initial term has expired. When determining the employee’s continuous service period, the new period or periods are regarded as extensions of the previous period and would be added to the employee’s continuous service duration – for end of service gratuity purposes or otherwise.

The New Law automatically applies to employees who are currently on unlimited contracts. Employers must transition existing unlimited-term contracts to fixed-term contracts within one year of the Effective Date, which is February 2023.

Under an unlimited contract, either party may end the contract for valid reason and should provide notice.

If the employee has been with the company for:

  • Less than 5 years – 30 days notice
  • More than 5 years – 60 days notice
  • More than 10 years – 90 days notice

The New Law mandates that the employment contract include the employer’s name and address, as well as the employee’s name, nationality, date of birth, and any other information essential to establish the employee’s identification and credentials. The contract should also include the employee’s job title, start date, location, hours of work, days off, and, if appropriate, the probationary period. The contract should also include the duration, agreed compensation, including allowances, and other compensation in case of injury, duration of yearly leave to which the employee is entitled, period of warning, contract termination process, and any other data defined by the MOHRE as necessary to manage the parties’ relations.

Work Permits

The Ministry of Human Resources and Emiratisation approved 12 categories of work permits as of February 2022, allowing companies registered with the ministry to employ workers who fulfilled the requirements of the permits. Among these permits is a permit to bring in a worker from outside the country, a permit to relocate a non-national worker to and from a business that is duly registered with the ministry, and a permit for individuals staying with family,

A temporary work permit, which is granted to a registered business intending to recruit a worker from abroad to complete a temporary work or a specific project within a fixed period, and a project work permit, which is granted to a registered business intending to recruit a worker from abroad to complete a temporary work or a specific project with a fixed period, are also included.

The part-time work permit authorizes registered businesses to hire a worker on a part-time basis, with reduced working hours or days than full-time employees. The individual can work for other employers as well once a part-time work permit has been issued. The work permit for minors also enables an individual who has reached the ages of 15 – 18 to work in a registered business under the guidance of the regulations and its executive directives.

A student work permit covering training and employment has also been confirmed. This type of permit allows registered businesses to train or employ a student in the country who has reached the age of 15, subject to certain requirements that ensure appropriate training and working conditions. A work permit for citizens/children from Gulf Cooperation Council countries allows Emirati and GCC individuals to work in registered businesses in the country.

For golden residency visa holders, a work permit will be issued upon the request of a registered business. Companies can also get a national work permit for trainees if they intend to train a citizen according to a known technical or scientific qualification.

Persons who seek to operate based on their own residency, most usually in the case of foreign individuals, will be granted a self-employment permit. This permit does not need sponsorship from a specific company or employer in the UAE, nor does it require the individual to have an employment contract under which he or she will receive an income directly from providing services for a certain period of time. This permit allows the individual to execute tasks or services to an individual or a company, in which case the individual is not employed by that person or business. Consult employment lawyers in UAE to find out more details.

Employee’s Entitled Leave

Under the new legislation, bereavement leave is specified as five (5) days in the case of the husband or wife’s death, and three (3) days in the case of the mother, father, child, brother, sister, grandchildren, grandpa, or grandmother’s death.
Employees (parents) who have a child to care for are entitled to five (5) working days of parental leave.

According to the legislation, an employee who is associated with or regularly studies at a state-approved educational institution is entitled to study leave for a period of ten (10) working days each year to take tests, provided that the person has worked for the company for at least two years.

In addition, the national employee will be allowed full-time leave to undertake national duty with pay in conformity with the country’s regulations. Proof of service from the appropriate authorities is necessary in order to be eligible for the leave mentioned in this Article.

The Ministry of Human Resources and Emiratization established conditions, controls, and procedures for the issuance, renewal, and cancellation of work permits, as well as the transfer of workers from one establishment to another, so that employers can meet their labor needs and reap the benefits of their capacity and productivity at the lowest possible cost, particularly in the case of new work models.  Feel free to consult employment lawyers for more information about this if you feel there is a violation against this policy.

End Of Service Gratuity

Because no agreements have been formed for workers who have turned in their resignation notice, resigning employees who have served for at least one year are entitled to a full end-of-service gratuity calculation payout.

Also, there are no particular laws covering alternative pension plans, and it’s uncertain if MOHRE will recognize them, especially if a contract already exists.

After the contract expires, all end-of-service benefits must be paid within 14 days. Businesses who fail to comply might face fines ranging from AED 5,000 to AED 1,000,000, with the amount increasing depending on the number of employees affected. However, if this time limit has elapsed, employee(s) are not entitled for compensation.

Onshore and inside the free zones, all UAE businesses (excluding DIFC and ADGM) are to revise their employee contracts. After a review to ensure conformity with the New Law, new employment contracts and other rules would be necessary.

If you require assistance in implementing these guidelines in accordance with the new Law, please do not hesitate to contact us. Our labor and employment lawyers in Dubai are glad to help you.

Contact Us to learn more