The employment landscape in the United Arab Emirates (UAE) has recently undergone significant changes with the introduction of the new UAE Labour Law. These regulatory updates bring crucial changes in the rights of employees and employers in the nation. Staying informed about labour law reforms is mandatory for individuals and businesses. With everyone being in compliance with the latest regulations, the UAE government institutions are focusing on promoting a fair and harmonious working environment for everyone.
In this article, we’re going to narrow down the key aspects related to the new UAE labour law that everyone should be aware of. From enhanced leave policies to employee termination & discrimination, we will cover all the essential information you need to know about the new labour law landscape effectively. So, without further ado, let’s start digging into details about the significant factors related to new UAE labour law policies.
1. Limited Employment Contracts
The new UAE labour law allows the issuing of only fixed terms contracts (up to three years) instead of unlimited-term contracts. Employers need to comply with the new law and transition all existing employees from unlimited-term contracts to fixed contracts.
2. Part-Time/Flexible Working Policies
While earlier labour law involved full-time job employment, the new law policy in UAE brings an alternate work policy with flexible and typical arrangements. Employees can opt for part-time employment having temporary work requirements, specific project-based work, flexible working policy, job-sharing, and pro-rated benefits. Such workforce arrangement involves working hours/days as per the employer’s needs.
3. Probation Period Notice
Under the new labour law in UAE, probation periods are still the same as what they were previously, i.e. six months. However, there is a new requirement for both employers and employees to give notice if they wish to terminate employment during the probation period. The employees need to provide at least 14 days’ notice to seek termination.
In case the employee is looking forward to joining another UAE-based employer, a 30-day notice period is a must. Furthermore, the employee holds the right to ask for reimbursement of recruitment expenses from the new employer.
4. Annual Leave Policy
Under the new UAE labour law policy, employees are required to use their accrued annual leave within the same year. Now, the due leaves are not allowed to carry over unused days to the following holiday year unless approved by the employer. The only exception to this law is when an employer has prevented employees from using all leaves within the same year. If any annual leave days remain unused, they will be forfeited without compensation.
In exceptional cases, the payout of unutilized leave days may occur. Such circumstances typically include specific situations or when the employment ends, and the payout is based solely on the employee’s basic salary.
5. Other Leave Policies
The New UAE Labour Law brings significant enhancements in terms of other leave policies for employees. Now, the maternity leaves are extended to 60 calendar days, having 45 days at full payment and the remaining 15 days at half payment. This leave policy is also applicable if an employee experiences a miscarriage after six months.
Further, up to five calendar days off are allowed as compassionate leaves, even in case of an employee’s spouse’s death. For the event of the death of an employee’s parent, grandparent, child, sibling, or grandchildren, up to three calendar days’ leave is allowed.
Moreover, the new labour law provides a duration of five calendar days to both parents, which must be availed within six months of the child’s birth. Employees with over two years of service will be allowed leave for around ten calendar days to attend exams for UAE-based education.
6. Working Days & Hours
Under the new UAE labour law regulations, Fridays are not mandatory rest days anymore. The employers possess the flexibility to allow one day of rest on any day of the week. Ideally, the maximum working hours still remain 48 hours with a limit of 8 hours per day in a six-day working week. The overtime hours limit is a maximum of two hours per week for every employee.
However, it’s important to note that exemptions from these terms fall under the Executive regulations. In such cases, the employee’s working hours should not exceed 56 hours per week.
7. Termination Of Employment
Although referred to as “fixed”, the new UAE labour law allows the termination of fixed-term contracts in compliance with the due notice period & legitimate reason. Simply put, the employer can issue termination as long as a written notice period is properly specified in the employment contract. This law permits termination with a notice which is even unrelated to an employee’s performance and conduct in the job role.
The concept of redundancy is permissible as a valid ground for termination in case of insolvency, employer bankruptcy, financial challenges, and other circumstances. In addition, the previous arbitrary dismissal compensation regime has been significantly reduced, with compensation being available to employees in only two specific termination instances. However, the interpretation of this new law is yet to be observed in the UAE courts of legislation.
8. Discrimination & Equal Pay Policies
The new UAE labour law now includes explicit provisions to protect employees from various sorts of workplace discrimination. It prohibits discrimination based on colour, sex, social origin, national origin, race, and disability. Additionally, it covers all discrimination concerns which could hinder equal opportunities or prejudice an employee’s ability to obtain or retain employment.
Further, the law ensures that no employer can terminate an employee on the basis of pregnancy or maternity leaves. The new labour law even emphasizes maintaining the principle of equal pay and compensation for men or women for the same job role.
Hence, the above points conclude the important factors and sections of the new UAE labour law. These points emphasize the effect of contractual agreements between employers and employees. Consequently, it is mandatory for the companies to remain aware of the law policies, review their template documents, & maintain full compliance with new & executive regulations. A proper review of these new laws is mandatory to align with legal requirements and obligations.
Visit Fichte & Co website & contact expert legal attorneys to know more about new UAE labour law and associated regulations.