UAE: New Labour Laws for the Private Sector
by activpayroll
On Monday 15th November, President of the United Arab Emirates, Khalifa bin Zayed Al Nahyan, issued a new Decree that will come into force for the private sector on 2nd February 2022. The new law has been introduced to deal with the rapidly-changing workplace amid advances in technology and the COVID-19 pandemic.
Federal Decree Law no. 33 of 2021 will regulate labour relations in the private sector across various work models, including part-time and temporary work, alongside safeguarding employee rights and introducing a new leave policy. This is the biggest amendment to the law since its establishment.
What’s New?
New Work Models
One key change is the introduction of new forms of working, allowing employees to have a more flexible work week rather than having to commit to a full-time position with set hours. Work options now include:
- Part-time
- Temporary
- Flexible
- Freelancing
- Condensed (employees can choose to finish their 40 hours in three days instead of one week as per the contract signed by both parties)
- Shared (allows two people to share the same job and split the salary based on a mutual agreement with the employer)
- Self-employment
Three Year Work Contracts
The new law defines one type of contract, namely a limited (or fixed-term) contract, which may not exceed three years and is renewable for a similar or lesser period upon the agreement of both parties.
The provisions of the law shall apply to unlimited contracts enclosed in the Federal Law No. (8) of 1980. It is also resolved to convert employment contracts from unlimited to limited within one year of enforcement of the law. Based on public interest, the cabinet may extend this period.
Judicial Fee Exemptions
Employees will no longer have to pay legal fees when filing a labour case against an employer for compensation less than Dh100,000. The law also states that employers cannot confiscate employees’ official documents. Employees will also no longer be forced to leave the country when their work term ends. Employers are required to bear the fees and expenses of recruitment and employment, they must not recover them directly or indirectly from the employee.
Paid Leave
All employees are entitled to one paid rest day per week, any more are at the discretion of the employer. Under the new law, employees are also entitled to a range of leave days, including mourning leave that can range between three to five days depending on their relation to the deceased.
New fathers will also be entitled to five days of paid paternity leave under the new law, this was previously in force across individual emirates, however the new legislation means it must be applied across all emirates.
After two years of consecutive employment, employees are entitled to a 10-day study leave period per year as long as they are enrolled in an accredited institution with the UAE.
Maternity leave can be extended to 60 days: 45 days at full salary, followed by 15 days at half salary. Women are also entitled to receive an additional 45 days of leave without pay once they complete their initial maternity leave.
If a new mother gives birth to a child with special needs, they are entitled to a 30-day paid leave period after the completion of their initial maternity leave period. This is also renewable for another 30 days with no pay.
Teenage Employment
Employers cannot hire anyone under 15 years of age and teenagers aged 15 and above must obtain written approval from a parent or guardian and supply a medical fitness report. Teenagers should not be hired to carry out high risk jobs that could harm their health and ethics or work after 7pm. In addition, they should not work more than six hours a day (inclusive of a one-hour break).
Working Hours and Overtime
Under the new law, employees cannot work for five consecutive hours without at least a one-hour break. Employees are not allowed to complete more than two hours of overtime in one day. Should the nature of the job require more than two hours of overtime in one day, employees must receive an overtime rate that is 25% more than their regular hourly rate. Should the nature of the job require an employee to work overtime between 10pm and 4am, they are entitled to an overtime rate equivalent to their regular hourly rate with a 50% increase (employees on a shift basis are exempt from this rule).
Employee Protection
The law prohibits discrimination on the basis of race, colour, gender, religion, nationality, social origin or disability and protects employees against sexual harassment, bullying, or the use of verbal, physical, or psychological violence by their employers, superiors and colleagues.
In addition, an employer must not use any means of force, threaten to penalise employees or coerce them to perform an action or provide a service against their will.
If you are interested in doing business in the UAE, find out everything you need to know about payroll, tax, social security, employee benefits, work permits, employment law and more in activpayroll’s Guide to Doing Business in the UAE. This is available as a free PDF to download.