The United Arab Emirates (UAE) has been experiencing significant growth in recent years, which has led to an increase in foreign investment and a rise in job opportunities. However, with this growth comes the need for clear and concise labor laws to protect both employers and employees. The UAE Labor Law is a set of regulations that governs the relationship between employers and employees in the UAE.
The UAE Labor Law covers a wide range of topics, including employee rights, working hours, wages, and termination of employment. It is essential for both employers and employees to understand their rights and obligations under the law to avoid any legal disputes in the future. The law applies to all employees, regardless of their nationality or place of origin, who work in the UAE, whether in the public or private sector.
Overview of UAE Labour Law
The UAE Labour Law, which governs private sector employment relations, was recently updated on February 2, 2022, replacing Federal Law No. 8 of 1980. The new Labour Law consolidates many of the changes which have been introduced by the Ministry of Human Resources and Emiratisation (MHRE).
Under the new law, fixed-term contracts of up to three years are the only type of contract that can be issued. The concept of unlimited term contracts has been removed. Employers have until the expiration of the current unlimited term contracts to renew them as a fixed-term contract.
The new Labour Law also introduces a new system for calculating end-of-service gratuity for employees. The end-of-service gratuity calculation is based on the employee’s last basic wage and the length of service, with the gratuity being equivalent to 21 days of pay for each year of service for the first five years of employment and 30 days of pay for each additional year of service.
Furthermore, the new Labour Law provides for equal pay for men and women who perform the same work or work of equal value. Employers are required to provide equal pay for equal work, regardless of gender. Additionally, the new Labour Law provides for increased protection for domestic workers, including requirements for written employment contracts, rest periods, and annual leave.
Employment Contracts
The UAE’s Labour Law has undergone significant changes in recent years, particularly with regards to employment contracts. Employers must place all employees on fixed-term employment contracts with a maximum term of three years. However, contract terms may be shorter if agreed upon by both parties.
Fixed-term employment contracts must be completed by the February 1 deadline and are mandatory for all private sector companies. The amendment to fixed-term employment contracts is aimed at helping employers retain talent and provide more flexibility in the workplace.
Under the UAE Labour Law, there are two types of employment contracts: limited and unlimited. Limited contracts are for a fixed term and cannot exceed four years. They can be renewed, but only with the agreement of both parties. Unlimited contracts have no set end date and can be terminated by either party with notice.
Employment contracts must include certain information, such as the employee’s job title, salary, working hours, and leave entitlements. Employers must also provide a copy of the employment contract to the employee in both English and Arabic.
It is important for both employers and employees to understand their rights and obligations under the UAE Labour Law when entering into an employment contract. Employers must ensure that their contracts comply with the law, while employees should carefully review their contracts before signing to ensure that they understand the terms and conditions of their employment.
Working Hours and Overtime
According to the UAE Labour Law, the maximum number of ordinary working hours for adult workers is eight hours per day or forty-eight hours per week. The number of hours may be increased to nine hours per day for businesses, hotels, and cafes after obtaining a special permit from the Ministry of Human Resources and Emiratisation (MOHRE).
Employers are required to provide their employees with a weekly rest day, which is usually Friday. However, if an employee works on their rest day, they are entitled to receive a day’s wages in addition to their regular pay.
Article 65 of the UAE Labour Law states that employees are entitled to receive overtime pay for any work that exceeds their normal working hours. The overtime rate is calculated as follows:
- For the first two hours of overtime, employees are entitled to receive 25% of their hourly wage.
- For any additional hours of overtime, employees are entitled to receive 50% of their hourly wage.
Employers can ask their employees to work overtime, provided that the number of extra hours does not exceed two hours per day, as per Article 19 of the UAE Labour Law. If an employee works more than two hours of overtime per day, they are entitled to receive overtime pay for the additional hours worked.
It’s important to note that employees who work more than forty-eight hours per week are entitled to receive overtime pay for any additional hours worked. The overtime rate should be calculated in accordance with the provisions of the UAE Labour Law.
Wages and Benefits
The UAE Labour Law does not stipulate a minimum salary for employees. However, it broadly mentions that salaries must cover the basic needs of the employee. Basic salary is the contractual amount agreed upon, exclusive of allowances, expenses, or any other benefits, and must be paid to the employee on a monthly basis.
Employers in the UAE are required to register their employees and pay them through the Wage Protection System (WPS). The WPS ensures that salaries are paid on time and that employees receive their full salaries without any deductions, except for those authorized by the UAE Labour Law.
All workers in the UAE are entitled to a mandatory health insurance program, which must be provided by the employer. The insurance program covers basic medical expenses and is not mandatory for dependents of the employee. Employers may also provide additional benefits such as housing and transportation allowances, which are prevalent in the UAE.
| Allowance Type | Description |
|---|---|
| Housing Allowance | Provides financial assistance to employees for housing expenses. |
| Transportation Allowance | Provides financial assistance to employees for transportation expenses. |
| Education Allowance | Provides financial assistance to employees for education expenses for their children. |
Employers in the UAE are also required to provide end-of-service benefits to employees who have completed at least one year of service. The end-of-service benefits are calculated based on the employee’s basic salary and length of service and can include a gratuity payment, leave salary, and repatriation expenses.
It is important for employers in the UAE to comply with the provisions of the Labour Law regarding wages and benefits to avoid penalties and legal action. Employees can file complaints with the Ministry of Human Resources and Emiratisation if they believe their rights have been violated.
Leave and Holidays
UAE Labour Law provides for annual leave, sick leave, and public holidays for employees. Below are the details of each:
| Type of Leave | Duration | Conditions |
|---|---|---|
| Annual Leave | 30 calendar days | Granted after one year of service |
| Sick Leave | 90 days | Granted after three months of service |
| Maternity Leave | 45 days | Granted for female employees after one year of service |
| Paternity Leave | 3 days | Granted for male employees after one year of service |
Employees are entitled to an annual leave if they have completed six months of service. Annual leaves are granted in accordance with the Federal Labour Law No. 8 of 1980. After the first year of employment, an employee is entitled to 30 calendar days of paid leave annually. Sick leave is granted to employees who are unable to work due to illness or injury. The employee must provide a medical certificate to their employer.
UAE public holidays are based on Islamic holidays and other significant events in the country. The number of holidays may vary depending on the sighting of the moon. Employees are entitled to a paid day off on public holidays. If an employee is required to work on a public holiday, they are entitled to a paid day off in lieu or overtime pay.
In conclusion, UAE Labour Law provides for various types of leave and public holidays for employees. Employers are obligated to follow these laws and provide their employees with the necessary time off. It is important for employees to be aware of their entitlements and for employers to ensure compliance with the law.
Termination and End of Service Benefits
Termination of employment in the UAE is governed by the UAE Labour Law. Employers must provide employees with a notice period before termination. The notice period varies depending on the length of the employee’s service. If the employee has served for less than five years, the notice period is 30 days. If the employee has served for more than five years, the notice period is 90 days.
When an employee’s contract is terminated, they are entitled to end of service benefits (ESB). The ESB is a lump-sum payment that is based on the employee’s length of service and final salary. According to UAE Labour Law, employees who have served for less than five years are entitled to 21 days’ pay for each year of service. Employees who have served for more than five years are entitled to 30 days’ pay for each year of service.
Employers are also required to provide employees with other benefits upon termination. These benefits include payment for any unused annual leave, repatriation expenses, and compensation for arbitrary dismissal. If an employee is dismissed without cause, they are entitled to compensation equivalent to three months’ salary.
It is important for employers to comply with the UAE Labour Law when terminating employees. Failure to do so can result in legal action and penalties. Employers should also ensure that they calculate the ESB accurately and provide the correct amount to the employee.
Employees who are terminated should be aware of their rights under the UAE Labour Law. They should ensure that they receive the correct amount of ESB and other benefits upon termination. If they believe that their rights have been violated, they can file a complaint with the Ministry of Human Resources and Emiratisation.
Health and Safety
The UAE Labour Law contains provisions for the safety and protection of workers. Employers have a responsibility to provide a safe and healthy work environment for their employees. This includes providing adequate protection means and safety gear to workers, as well as ensuring that the workplace is free from hazards that could cause harm to workers.
According to Clause 13 of Article 13 of Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations in the Private Sector, employers must provide their workers with necessary means of protection, such as protective clothing, safety equipment, and first-aid kits.
All persons conducting a business in the UAE have a responsibility to provide a safe and healthy workplace for their staff and workers, as well as those who visit their premises. The UAE Occupational Health and Safety legislation requires employers to identify potential hazards and take necessary measures to minimize the risk of accidents and injuries in the workplace.
Employers must also provide their workers with proper training and instructions on how to use safety equipment and follow safety procedures. Workers should report any unsafe conditions or hazards to their supervisors or the designated safety officer immediately.
The UAE government has established various agencies and organizations to ensure compliance with health and safety regulations in the workplace. Employers who fail to comply with these regulations may face penalties and fines, and in severe cases, legal action.
Discrimination and Harassment
The UAE has several laws in place that aim to prohibit discrimination and hatred on the basis of caste, race, religion, or ethnic origin. The new labour law amendments implemented in February 2022 have strengthened the protection of workers against discrimination and harassment in the workplace.
Article 14 of the new law states that “sexual harassment, bullying or any verbal, physical or psychological violence committed against the worker by the employer, their representative or any of their colleagues shall be considered a violation of their dignity.” The law also prohibits discrimination based on gender, age, religion, or nationality, among others.
Workers who experience discrimination or harassment in the workplace have the right to file a complaint with the Ministry of Human Resources and Emiratisation. Employers who violate the law may face penalties, including fines and imprisonment.
It is important for employers to create a safe and inclusive work environment for all employees. This includes implementing policies and procedures to prevent discrimination and harassment, providing training to employees and managers, and taking prompt action to investigate and address any complaints of discrimination or harassment.
Dispute Resolution
Disputes between employers and employees can arise in any workplace. The UAE Labour Law provides for the resolution of individual and collective labour disputes.
Individual labour disputes refer to conflicts between a single employee and their employer. The UAE’s laws guarantee the rights of both the employer and the employee in such disputes. If an individual labour dispute arises, the employee can file a complaint with the Ministry of Human Resources and Emiratisation (MOHRE) or the labour court. The MOHRE will then attempt to mediate between the two parties to reach a resolution. If mediation fails, the dispute will proceed to the labour court for a final decision.
Collective labour disputes, on the other hand, involve conflicts between a group of employees and their employer. These disputes may arise from issues related to the common interest of the workers, such as wages, working conditions, or benefits. In such cases, the workers can form a labour union to represent them in negotiations with the employer. The union can then file a complaint with the MOHRE or the labour court on behalf of the workers. The MOHRE will attempt to mediate between the two parties, and if mediation fails, the dispute will proceed to the labour court for a final decision.
It is important to note that before filing a complaint with the MOHRE or the labour court, the parties must attempt to settle the dispute through amicable means, such as negotiation or mediation. If these attempts fail, the parties can proceed with filing a complaint. Additionally, parties must comply with the time limits set out in the UAE Labour Law for filing complaints.
In conclusion, the UAE Labour Law provides for the resolution of individual and collective labour disputes. Parties must attempt to settle disputes through amicable means before filing a complaint with the MOHRE or the labour court. If mediation fails, the dispute will proceed to the labour court for a final decision.
