The United Arab Emirates is and has been a global working hub for millions of expats across the globe and as we saw the pandemic bring in new ways of working, the Ministry of Human Resources & Emiratisation introduced a new Labour Law – Federal Decree Law no33 of 2021 which addresses changes in the work environment and aligns the UAE labour relations with international best practice.
Here’s what you need to know:
1. Labour Contract
Unlimited Labour Contracts no longer exist and only limited contracts are available.
This means that labour contracts can be set for a 3 year term and can be extended or renewed if both parties agree for either the same term or less.
If the employee opts to renew or extend the contract then it shall be considered as an extension of the original term and added to the employees continuous term of service.
2. Termination/ Resignation during probation period
According to the new law, the employer is required to give a 14 day notice period to terminate the employees contract during the probation period.
If the employee decides to change jobs during the probation period, they must give a full months notice.
If the employee wants to leave the country, they will have to provide 14 days notice and compensate the employer for the visa cost & hiring expenses.
If the employee leaves the country and returns to take up a new job within 3 months ,the new employer would have to pay the former employer for the visa costs and the labour expenses incurred if specified in the labour contract.
If an employee leaves the country without any notice, the company reserves the right to recommend the Labour Department impose a one-year ban.
Employers cannot confiscate official documents of employees and it is illegal to hold an employees passport.
4. Rest day
Everyone must have at least 1 rest day with the option of more depending on their contract.
5. Everyone must have at least 1 rest day with the option of more depending on their contract.
If an employee is absent from over 20 in-consecutive days in one year or over seven consecutive days without informing the employer, the employer can then terminate the contract of employment.
6. Settlement of gratuity
If you service less than 1 year service – no gratuity will apply.
If you serve less than 5 years of service – gratuity is calculated on 21 days of basic salary per working year
Services after 5 years – first 5 years will be calculated on 21 days of basic salary per year and subsequent years on 30 days of basic salary per year.
7. Non-Competition clause
The employer may require that the worker under the employment contract shall not, after the expiry of the contract, compete with the employer or be engaged in any competing project in the same sector.
This can now be written into a contract and has a maximum restrictive period of 2 years from the date of termination.
Should you have any questions regarding the New Law and what it could mean for you or your company, send us an email on [email protected]