New UAE Labour Law 2022-Everything you need to know!
The objective of the Labour Law
The Federal Decree-Law no. 33 of 2021 (the "New UAE Labor Law") came into effect on February 2, 2022. The main objective of the amended UAE Labor Law is to ensure the efficiency of the UAE Labor market and regulate the employment relationships and define the rights and obligations of the parties to this legal relationship in a balanced manner.
Scope of application
The provisions of the new UAE Labor law shall apply to all Establishments, employers, and workers in the UAE private sector. (Ref. Article (3))
The provisions of the new UAE labor law does not apply to:
- Employees of federal and local govt entities;
- Employees of the armed forces, police, and security; and
- Domestic workers
Some of the key amendments to the UAE Labor Law:
#1: Type of labor contract:
The labor contracts should be limited contract from 2nd February 2022. Existing unlimited contracts must be converted to limited contracts within 12 months. Therefore, Companies in the private sector have to change all the existing unlimited contracts to limited contracts by 1st February 2023.
#2: Period of labor contract:
As per the new regulations, all the labor contracts will be limited-term contracts, the period of which may not exceed three years, and can be renewed an unlimited number of times for either the same length period or a shorter period. (Ref. Article (8))
#3: Notice period in probation period. (Ref. Article (9))
- Termination by the employee during the probationary period
- If the employee wants to move to another employer in UAE, the employee may terminate the contract during the probationary period by providing not less than one month's written notice to the Employer. In this case, the new employer has to compensate the previous Employer for any recruitment costs incurred for the employee unless otherwise agreed upon.
- If the employee wishes to leave the UAE, the employee may terminate the employment during the probation period by providing not less than 14 days of written notice to the Employer. If the employee returned to UAE with a new work permit issued by MOHRE within 3 months from his/her departure date, the new Employer should compensate the previous Employer for any recruitment costs incurred by the previous Employer for the employee stipulated in Article (9) - Clause (3).
- Termination by the employer during the probationary period
An employer may terminate the employment contract during the probation period by providing at least 14 days written notice to the employee.
#4: Resignation without notice-(Ref. Article (45))
As per the new labor regulations, an employee will be able to resign without giving notice if:
- An employer breaches his obligations towards the employee stipulated in the contract and fails to remedy such breach, and the employee notifies this breach to the MOHRE within 14 days before quitting the work.
- In case of harassment or violence by the Employer or its legal representative, the employee notifies the competent authorities and the MOHRE within five working days from the date on which he/she was able to report.
#5: Overtime -(Ref. Article (19))
- If the nature of the job requires overtime work, then the employee shall receive an increase not less than 25% of the Basic Salary as overtime allowance.
- In a case where employees are required to work overtime between 10 PM to 4 AM, they will be entitled to get an increase not less than 50% of the Basic Salary as overtime allowance. (Not applicable to employees on a shift basis)
- If employees are required to work on the day off, they are eligible to get a one-day off, or they shall be paid the salary of that day plus an overtime allowance not less than 50% of the Basic Salary for that day.
#6: Non-competition -(Ref. Article (10))
As per the new labor law regulations, it is mandatory for the employer to enter into a non-competency agreement with the employees if the employer intends to protect the business interest. The non-competition period shall not be more than 2 years from the expiry date of the contract.
#7: Different working categories -(Ref. Article (7))
- Full-time work
- Part-time work
- Temporary work
- Flexible work
#8: Leave entitlement
- Study leave – Employee is entitled to get 10 days of study leave for the purpose of exams which is enrolled in UAE accredited educational institutions if he/she completed 2 years of service with the Employer.
- Maternity leave – (Ref. Article ( 30))- Maternity leave can be extended to 60 days ( 45 days of fully paid leave and 15 days of half paid leave). The employee has an option to avail of 45 days of unpaid leave following the 60-day period in case of any post-partum complications.
- Bereavement leave- (Ref. Article ( 31))- In case of demise of a close relative, the employee is entitled to get bereavement leave ranging from 3-5 days depending on the degree of kinship of the deceased.
#9: Payment of the final settlement -(Ref. Article ( 53 ))
Payment towards a final settlement to an employee must be made within 14 days from the end date of the contract term.
#10: Protection of worker’s documents and right to remain
Employers are prohibited from confiscating employees' official documents and workers should not be forced to leave the country following the end of their work term. (Ref. Article (13))
Any person who violates the provisions of the law may face fines a minimum of AED 20,000/- and up to AED 1,000,000/-. Such fines would vary according to the multiplicity of employees who are affected by such breach and it may go up to a fine of a maximum of AED 10 Million. ( Article 59 to 62)
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We await the official publication of the New Law and the accompanying Executive Regulations and will provide a further update on these changes in due course.
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