In the UAE, the new labor law has come into force, effectively replacing the previous law – Federal Law No. 8 of 1980 and its amendments.
As a result of a new law – Federal Decree-Law No. 33 of 2021 on the regulation of labor relations – several changes have been made to the previous law, such as three-year work contracts and new work models. There are also various aspects governing the relationship between employers and employees in the UAE’s private sector, such as gratuity calculations, employer rights, and employee rights.
Here is an overview of what the new UAE Labour Law says and how it will support the rights of employers and employees in the private sector.
Three-year contracts
The removal of unlimited contracts is one of the biggest changes that will affect a lot of workers. Before, workers could sign either a limited or unlimited contract. In the new law, Article 8 specifies that contracts can only be concluded for a specific period of time, not exceeding three years.
New models of work
Workers in the UAE will have the option to work not just under a full-time model, but also under a variety of models, such as part-time work, temporary work, flexible work, etc.
Probation period
An employee and an employer are protected by Article 9 of the law during the probation period, which is the initial period of employment. The article discusses various aspects of the probation period, such as the maximum period for which an employee can be on probation, which is six months, and the rights of each party if the employee wants to switch jobs during the probation period.
New types of leaves
Workers will also be able to take different types of leave to accommodate their personal needs and help strike a better work-life balance under the new law.
As an Emirati employee, you can take advantage of annual leaves, sick leaves, bereavement leave, paternity leave, study leave, and a paid sabbatical.
Besides these paid leaves, you can also apply for unpaid leaves if you meet certain requirements.
Maternity leave extended to 60 days
As a result of the new law, maternity leave entitlement is now 60 days, rather than 45 days. Moreover, Article 32 allows for a five-day paternity leave that can be utilized by both the father and mother of a child.
Flexible salary options
The new law also allows for more flexible salary payment options, ranging from receiving your paycheck in different currencies to receiving your pay on a weekly, daily, or hourly basis.
Workplace injury
Moreover, articles 37 and 38 address the rights of employees if they are injured at work and what mistakes employees should avoid, because they may not always be able to receive compensation in the case of work-related injuries.
Equal pay for equal work
The right to non-discrimination and equality is highlighted in Article 4, which is one of the first few articles in the law that focuses on protecting employees from any type of discrimination at work.
According to Article 4, women should receive the same wage as men for the same job, or a job of equal value.
Wage deduction
An employer may deduct a portion of an employee’s salary in some cases under article 25 of the law, such as if the employer extends a loan to the employee. As part of this law, a limit of 50 percent is placed on the amount of salary that can be deducted.
Maximum working hours, overtime pay
According to article 17 of the new legislation, the maximum ordinary working hours are eight hours a day or 48 hours a week. However, there are some economic sectors that can have longer hours.
Further, Article 19 of the law describes in detail how overtime pay would be calculated.
Employment of juveniles
Young UAE residents looking to gain work experience in the UAE while completing their education can also take advantage of the new law, which outlines how they can work in the UAE’s private sector while keeping certain work conditions.
The rules that employers and employees need to abide by
In a comprehensive list of duties, the law specifies employer responsibilities in the private sector as well as employee obligations. It also involves upholding the trust that the employer has placed in the worker, by completing their tasks diligently and not working for other employers in violation of the detailed laws for part-time work.
Other parts of the law highlight the duties of employers. For example, Article 6 of the law expressly prohibits employers from requesting workers to pay for recruitment and employment directly or indirectly.
Notice period
In article 43 of the law, titled ‘Notice of termination of employment contract’, it is stipulated that a notice period of 30 to 90 days has to be served, regardless of which of the two parties (employer or employee) decides to terminate the work contract. If both parties agree, this notice period can also be waived.
Gratuity calculation
The law explains in detail how a gratuity will be calculated for an employee, based on the length of their employment.
Non-compete clause
Article 10 of the new law, which governs the non-compete clause of contracts, also makes changes to the earlier law, which strengthens employer rights by allowing the employer to execute a non-compete agreement with the employee.
Mistakes that can get you fired without prior notice
As part of the law, article 44 lists mistakes that can lead to disciplinary action and termination of a contract without prior notice. A failure to perform one’s duties as a worker or a verbal or physical assault are examples of these.
Fines that employers face
In addition, there is a section of the law that focuses on all the penalties that employers may face when they violate employee rights. According to the severity of the violation, fines can range from Dh20,000 to Dh10 million.