The Federal Decree-Law No. 33 of 2021 regarding the regulation of labour relations in the UAE was brought into force on 2 February 2022, for all businesses, employers and workers in the private sector. The previous Federal Law No. 8 of 1980 for the regulation of labour relations was repealed.
Minister of Human Resources and Emiratisation Dr. Abdul Rahman Al Awar said that the new law would strengthen the position of the UAE labour market by offering improved flexibility, efficiency, ease of work and attraction of competencies, expertise and skills, while protecting and guaranteeing the rights of both parties to the employment relationship in a balanced manner.
The new law provides employers and employees with several options to determine the form and model of the contractual employment relationship, especially given the provision for six types of work models under which contractual employment relationships can be established and for 12 different types of work permits.
“The new labour law provides flexibility for employees and employers to determine the type of their contractual agreement that meets the interests of both parties,” said Al Awar. He noted that the implementing regulations of the Decree-Law set out the conditions and controls of work models and the obligations that arise for each employer and employee.
The new law and its implementing regulations allow for the awarding of employment contracts under six different models:
- Full-time – working for one employer for a full workday.
- Remote – enables full-time and part-time employees to work completely or partially outside the office should the nature of their work allow it.
- Shared job – splitting job responsibilities and pay among more than one employee based on an agreement with the employer. Employees’ contracts under this model are governed by part-time job regulations.
- Part-time – working for one or more employers for a specified number of hours or days.
- Temporary – A contract for a specific period of time or for one project that ends with the job’s completion.
- Flexible – giving employees the freedom to work at different times depending on the conditions and requirements of the job based on a contract that covers hours, days and duties required.
The Decree-Law and its implementing regulations determine the amount of severance pay and annual leave in accordance with the working model in a way that guarantees the rights of both parties to the contract.
The Ministry of Human Resources and Emiratisation will issue 12 types of work permits as follows:
- Temporary work permit – enables employers to hire on a project basis or for work that lasts for a fixed period.
- One-mission work permit – enables companies and establishments to recruit an employee from abroad for temporary work or a specific project to be completed in a certain period of time.
- Part-time work permit – enables employees to work for more than one employer based on a fixed number of hours or days.
- Juvenile work permit: Enables employers to hire juveniles aged between 15 and 18 under the conditions outlined in the law.
- Student training permit – enables companies and establishments to train and recruit teenagers aged 15 under specific regulations that ensure a healthy work environment.
- UAE/GCC National work permit – issued when hiring UAE and GCC nationals.
- Golden Visa Holders permit – issued when hiring a Golden Visa holder inside the UAE.
- National Trainee permit – enables companies and establishments to train UAE nationals based on their qualifications or fields.
- Freelancer permit – issued for self-sponsored expats wishing to provide a certain service, complete a task or work for a fixed period of time for an individual or a company without sponsorship or existing contracts.
- A work permit to hire a worker from outside the country.
- A work permit to transfer an expatriate worker’s employment from one facility registered in the ministry to another.
- A work permit for expats who are sponsored by family.
Unlimited employment contracts must be converted into fixed-term employment contracts within one year of the effective date of the Decree-Law, the period being set at a maximum of three years. It is permissible to extend or renew the contract for other similar periods or for shorter or longer periods by mutual agreement of both parties. The new period or periods will be considered an extension of the original period and will be added to the employee’s continuous service period when calculating the employee’s continuous service period.
The Decree-Law prescribes that the employment contract should state: the name and address of the employer; the name of the employee; his /her nationality; his / her date of birth; all that is necessary to prove his / her identity; qualifications; activity or occupation; the date of commencement of work; the place of work; the hours of work; the days of rest; if applicable, the probationary period; the duration of the contract; the agreed wage, including allowances and supplements; the duration of the annual leave entitlement; the period of warning; the modalities of termination of the employment contract; and any other data determined by the Ministry as required to regulate the relations between the two parties.
It will also be permissible for the employee and the employer to agree on the inclusion of new clauses in the approved contract forms if they are compatible with the provisions of the Decree Law and the regulations and legal systems established by the Ministry.
The law establishes that employees should not face any kind of discrimination at the workplace, with the right to non-discrimination and equality highlighted in Article 4, which stipulates that women should receive the same wage as men for the same work, or for a work of equal value.
Article 17 of the new law stipulates that the maximum ordinary working hours will be eight working hours a day or 48 working hours a week, as well as the economic sectors which can have longer working hours. The law has a detailed regulation on how overtime pay is to be calculated in Article 19.
Article 9 of the law covers the rights of an employer and an employee during a probationary period. The maximum duration for which an employee can be on probation is six months, and the law sets out what the rights each party has in case an employee wants to switch jobs during this period.
Article 43 stipulates that a notice period of 30 to 90 days needs to be served, regardless of whether it is the employer or employee that decides to terminate the work contract. This notice period can be waived if both the parties mutually agree to do so. Article 51 of the law provides a detailed explanation on how gratuity will be calculated for an employee, based on the length of their service.
Article 10 of the law, which regulates the non-compete clause of contracts, further strengthens the rights of an employer by allowing the employer to execute a non-compete agreement with the employee.
The law sets out the obligations of employers in the UAE’s private sector, as well as the duties that employees need to fulfil. This includes upholding the trust that the employer has placed in the worker, by completing tasks diligently and not working for other employers in violation of the detailed laws on part-time work. Article 44 lists mistakes that can lead to the termination of an employment contract, without prior notice. These include a failure to perform duties as a worker or getting involved in a verbal or physical assault.
The duties of employers are also highlighted in other places of the law. Article 6, for example, states that employers are expressly prohibited from collecting the cost of recruitment and employment from the workers, whether directly or indirectly. If employers violate employee rights, they face penalties that range from Dh20,000 to Dh10 million, depending on the severity of the violation.
The entitlement to maternity leave has been extended from 45 to 60 days, and Article 32 also provides five working days of parental leave for the employee (father or mother) who has a child, to which he or she is entitled continuously or intermittently within six months from the date of the child’s birth.
The new law defines the bereavement leave to which an employee is entitled, providing form a period of five days from the date of death in the event of the death of the husband or wife, and three days in the event of the death of the mother, father, one of the sons, brother, sister, grandchildren, grandfather, or grandmother.
The law also provides that an employee who is affiliated with or regularly studies at a state-approved educational institution will be granted study leave for a period of ten working days per year to take examinations, provided that the length of service with the employer is at least two years. A UAE national employee will also be entitled to full-time leave to perform national service with pay in accordance with the laws in force in the country
The Ministry of Human Resources and Emiratisation will implement the conditions, controls and procedures for the issuance, renewal and cancelation of work permits, as well as for the transfer of workers from one establishment to another, so that employers can meet their labour needs and benefit from their capacity and productivity at the lowest operating cost, especially in terms of new work models.