New UAE Labour Law

PROVISIONS

CURRENT LAW

NEW LAW

Employment Contract

Limited & Unlimited Period Contracts

Only limited term contract for a maximum period of 3 years.*

*Employers will have until 1 February 2023 to make the necessary changes to their employment contracts and employment policies, including converting any unlimited term employment contracts to fixed term contracts with the relevant authority. Contracts that are not converted into limited term contracts by the effective date will automatically take effect as limited term contracts.

Type of Employment

Article (65)

(Article 7)

Full time

Full time-Working for one employer on a full-time basis.

Part Time – (only under Ministerial Resolution)

Part Time- Working for one or more employers for a specific number of hours or days.

Daily Working

Temporary Working- Work that is carried out during a specific period of time and that involves a specific task and ends with its completion.

Piece Meal

Flexible working- An employee may work for an employer on a flexible working arrangement depending on the circumstances and requirements of the work.

Working Hours

(Article 65)

(Article 17)

Work for eight hours per day or 48 hours in a week

Work for eight hours per day or 48 hours in a week or Work for 40 hours in a week – condensed working hours model

Probation Period

(Article 37)

(Article 9)

Maximum 6 months

Maximum 6 months

During probation no notice period requirement in case of termination or resignation

14 days Notice required in case of termination by employer during probation period. In case termination of contract by employee 30 days in case he wants to stay in UAE and 14 days notice in case he wants to leave UAE.*

* In case of employee terminate the contract and join new company then new employer must compensate the first employer for any incurred recruitment costs, unless agreed otherwise. Leave without notice – one year ban from obtaining work permit

Wages

No Minimum wages

Minimum wage to be determined

Payable in UAE dirhams into a UAE bank account

Payable in UAE dirhams and another currency agreed upon between the parties

Annual Leave

(Article 75)

(Article 29)

30 days; Unused leave can be carried forward to the following leave year

30 days; Carry over of unused leave is subject to employer approval.Employee must enjoy leave in year of entitlement. Pro-rata for part-time workers
Employers can require employees to take annual leave on specified days by giving 1 month notice

Maternity Leave

Article 30

Article 30

45 days of leave with full pay. 45 days of leave with full pay

60 days of maternity leave First 45 days of leave with full pay & next 15 days of leave with half pay

60 days of maternity leave. First 45 days of leave with full pay & next 15 days of leave with half pay

60 days of maternity leave First 45 days of leave with full pay & next 15 days of leave with half pay

Female employee will be Entitled for maternity leave in case of stillbirth or miscarriage after 6 months

Compassionate Leave

Article 32 (1)

Death of Spouse: Paid leave of 5 days in the event of the death of the spouse

Death of other relatives: Paid leave of 3 days in the event of the death of parents, grandparents, siblings, children, or grandchildren.

Paternal Leave

Five days Must be utilized within six months of the child’s birth

Five days Must be utilized within six months of the child’s birth

Study Leave

Paid leave for 10 business days who has completed more than two years’ service. Applicable for an employee enrolled in an education institution approved by UAE

End of Service Gratuity

(Article 137)

(Article 51 and 52)

Under limited contract Service period

Twenty-One (21) days for each year of service during the first five years.
Thirty days (30) for each additional year of service.

< than 1 year: No EOS

>1 year <Than 5 years : 21 days for each completed year of service

>than 5 years; 30 days for each completed year of service

Under unlimited Contract (Termination by employer)

< than 1 year: No EOS

>1 year <Than 5 years : 21 days for each completed year of service

>than 5 years; 30 days for each completed year of service

Under unlimited Contract (Resignation by employee)

< than 1 year: No EOS

>1 year <= 3 years : 7 days for each completed year of service

> 3 years < than 5 years; 14 days for each completed year of service

>than 5 years; 30 days for each completed year of service

No time for payment of EOS was mentioned

All entitlements must be paid within 14 days. Failure to do so may result in a fine of between AED 5,000 and AED 1,000,000.

Contract Termination

Unlawful Termination

(Article 123)

(Article 47)

Compensation awarded for unlawful termination (not related to employees work performance) under arbitrary dismissal.

Termination unlawful under this artcle if it was as a result of the employee filing a serious complaint against the employer;or it was as a result of the employee filing a serious complaint against the employer.                                 Compensation – capped at employee’s 3 months wage.

Redundancy

No redundancy provisions

Redundancy – if the employer is bankrupt or insolvent, or there are any economic or exceptional reasons

Notice/Warning Period

(Article 119)

(Article 43)

Fail to serve notice period- Notifying party shall pay compensation equivalent to the employee’s pay for the notice period or the reduced part
thereof

The party in breach of the notice period shall pay the other a compensation called pay in lieu of notice. The compensation shall be equal to the wage of the worker for the entire notice period, or the remainder thereof. If the employment contract is terminated by the employer, the worker shall be entitled to absent from work during the notice period for one-working day without pay per week, to search for another job

Termination Without Warning

(Article 120)

(Article 44)

Employees can be terminated without warning in any of the cases listed under Article 120. Worker is not entitled to ESG if terminated under Article 120.

Employer may terminate an employee only if the employee:   1. Assumed a false identity or submitted counterfeit certificates or documents. 2. commits an error resulting gross material loss to the Employer. 3. purposely damages the Employer’s property and admits this. 4. Violates employee safety rules 5. Fails to perform duties as per the Employment Contract.Discloses trade secrets that result in loss of opportunity to employer, or for Employee’s personal benefit
Found under influence of alcohol or drugs on office premises and portrays immoral behaviour
commits verbal/physical assault or any other form of assault.
against any employee
Absent for over 20 inconsecutive days in one year, or over 7.
consecutive days without a legitimate reason
Misuses his position for private gain.
Joins another Company without following due process
Worker will be entitled to ESG despite being terminated under
Article 44.

Non-Compete Clauses

Article (127)

(Article 10)

Labour Code of the UAE provides that an employer may agree on a post-contractual non-competition clause with an employee who, due to their employment with the employer, has knowledge of the clients of the employer or confidential information or business secrets, as long as the employee is at least 21 years of age. A valid non-competition clause must be limited in time and is restricted both geographically and to a specific business area.

The New Law allows employers to agree on non-compete clauses with their employees. The New Law provides clarity as to the conditions for such clauses to be enforceable. For instance, non-compete clauses are only enforceable for a maximum of two years after the expiry or termination of an employment contract. Non-compete clauses must also specify the place and type of work, to the extent necessary, to protect the legitimate business’ interests of the employer.

Other Provisions under New Labour Law:

Workers are exempt from judicial fees at all stages of litigation, enforcement and petitions filed by workers or their heirs with a value not exceeding Dh100,000.

The employer bears repatriation costs upon the family’s request in the event of a worker’s death. The employer shall also pay the worker’s wages, entitlements and severance expenses to the family within 10 days of the worker’s death.

The employer is prohibited from forcing employees to leave the country after the end of the work relationship or termination of a contract. Workers are allowed to move to a new employer and stay to benefit in the labor market. Passport protection: The employer cannot confiscate the official documents of employees, and it is illegal to hold the employee’s passport as per the passport retention policy under UAE Labour Law.