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The UAE has abrogated the Federal Labour Law no. (8) of 1980 to improve workplace rights and to boost the business environment by issuing new laws and regulations.
This new law has come into force on 2 February 2022 and has implied to all the companies a deadline until the month of February 2023 to transition their employees to new contracts, otherwise the concerned authorities shall impose a fine to non-complying companies.
Our Firm, Mouannes International Services is pleased to assist companies located in the UAE with adjusting and revising their employees’ contracts and policies as per the provisions of the new law and the new implementing regulations to the UAE new labour law.
We are also pleased to announce that we are assisting – among others – a large Chinese based wood factory with offices in the UAE and the region by modifying and amending these contracts to conform to the new rules that the new law has applied.
The New Labour Law consolidates many of the changes which have been introduced by the Ministry of Human Resources and Emiratisation (MHRE) through various regulations and also introduces significant new changes, thus amounting to a radical overhaul of labour relations in the UAE. It will apply across the UAE, in each of the seven emirates and its free zones (with the exception of the DIFC and ADGM).
Among that we point part of the essential modifications to outline some key elements as follows:
New Work Patterns:
The new Law enforces the employer and the employee to agree to a term of employment, therefore it is no longer possible to execute an unlimited term employment contract. This new law bids all employees to be employed on a fixed-term contracts without surpassing three years, which may be extended.
According to article (7) of the Federal Decree-Law No. (33) of 2021, the patterns of work to be contracted upon shall be in line with the following:
- Full-time employment refers to putting in a full day’s worth of work each working day for one employer.
- Part-time employment is defined as working for one or more employers during a certain number of working hours or days.
- Temporary work, which is work that must be completed within a specified time frame or is focused on a certain assignment and ends when it is completed.
- Flexible work, whose working hours or days vary depending on the workload as well as the employer’s operational and economic factors. The worker may work for the employer depending on the demands and circumstances of the job.
Probation period:
According to article (9) of the Federal Decree-Law No. (33) of 2021, the probation period should not exceed 6 months from the date of commencement of work.
During this period, the employer has the right to terminate the employee’s employment, after notifying the latter at least (14) days before the date specified, and same thing applies to the foreign employee before they leave the country.
If the worker desires to work for another organization in the country, he shall inform the original employer of the same in writing within a minimum of (1) month from the date of termination of the contract.
It is not allowed for a worker under probation to be selected more than once at one employer.
If any of the two parties ends the employment contract without observing the terms of the law, it is required to compensate the other party with money equivalent to the employee’s earnings for the notice period or the remaining portion of the notice period.
Leave and sick pay:
- Annual leave: the worker shall be entitled to an annual leave with full wage, of not less than:
– 30 days for each year of extended service.
– 2 days if his service is more than 6 months and less than a year.
– A leave for parts of the last year he spent at work if his service is ended before using his annual leave balance.
The worker shall be entitled to the wage for the period of his annual leave.
The employee may carry over some or all his unused annual leave to the next year with the consent of his employer and in compliance with the rules that apply at the business.
- Maternity leave: a female employee is entitled to a maternity leave of 60 days according to the following:
– The first 45 days with full wage; and
– The following 15 days with half wage.
After using her maternity leave, the female employee is allowed to be absent for a maximum of 45 days without being paid.
If she is unable to return to work because of her illness or the illness of her kid because of pregnancy or childbirth. A medical certificate issued by the medical organization must be used to prove the illness. According to the applicable laws, neither the service term for which the female employee is eligible for end-of-service benefits nor the period of contribution to the retirement plan includes this time.
- Sick leave: If a worker suffered from a disease that is unrelated to a work injury, he or she must notify the employer or a designated representative of the illness within three working days and provide a medical report detailing the status of the worker.
The worker shall not be entitled to a paid sick leave during the probationary period. - Various leave: In the following circumstances, the employee is entitled to a paid leave:
– Bereavement Leave (5 days in case of death of husband or wife, 3 days in case of parents/son/sibling/grandson/grandparents)
– Parental leave (5 days for the father/mother who has a newborn. The worker is entitled to such leave for 6 months following the date of the child’s birth, whether the leave is taken continuously or intermittently). - Absence after leave: the employee who does not immediately return to work without a good cause is not entitled to his pay for the time he was away from work.
Termination of a contract:
Notice Periods
The employment contract may be terminated by any party for any good cause, if the other party is notified in writing and work is completed during the notice period specified in the contract, which must be at least 30 days long and no longer than 90 days. The employee is entitled to receive his full pay for that time in accordance with the pay he was receiving at the time, and he must work during that time if the employer so desires.
The party who disregarded the notice period is still required to pay compensation, known as a notice period allowance, to the other party, even if the absence of notification does not result any harm to the other party.
Reasons for termination of a contract:
We outline some of the events including the permanent closure of the employer’s business, the failure of the employee to satisfy the requirements of the immigration and if the employer is bankrupted.
Summary Dismissal:
The new labour did law did not considerably amend the reasons allowing immediate dismissal however the new labour law required (2) written warning to be served to the employee prior to dismissing the employee for failure to perform the employer’s main duties.
Termination for “Good Cause”:
The employer and the employee may terminate the contract for “good cause” by giving written notice.
Non Competition:
The employer cannot include a non-compete clause for longer than (2) years. This maximum period remains a challenge to prove its grounds by the employer.
What do you need to do?
- Consult a lawyer. If you have a concern about how to comply with the new law and change your contracts or any other question about the new law, contact us, we will be pleased to assist you.
- You must transition your existing employment contracts before February 2023 and we can help you with that.
- You must update and/or draft new policies.
For more information on the UAE Labour Law and Implementing Regulations, please contact our firm namely Ms. Stephanie Mouannes who is ready to help you.