UAE's new labor law came into effect on Wednesday, February 2, 2022, marking the most significant amendment to the current UAE labor law or Federal Law No. 8 of 1980 to date. The much-anticipated Decree-Law No. 33 of 2021 on Regulation of Labor Relations applies to the private sector in the UAE.
First proposed by the Emirati government in November 2021, the new labor law in the UAE aims to improve workplace flexibility, combat workplace discrimination, and promote employee safety and efficiency. As of February 2, 2022, organizations in the UAE must be in compliance with the new labor law.
The new labor law in the UAE revolves around the key themes of Employment Contracts, Leaves, Flexible working, etc, which brings about many far-reaching shifts in the way organizations need to function.
What are the key changes to Employment Contracts?
UAE’s new labor law eliminates the concept of an unrestricted term contract and requires that all employees be hired on contracts that do not exceed 3 years. However, employers have a one-year grace period to amend according to the new contractual conditions, which are subject to extension by MOHRE.
Under the UAE labor law changes pertaining to termination, either party can terminate the employment contract by giving the other party at least 30 days and no more than 90 days prior written notice. Within the probationary period, the employer may terminate the employee at any point in time. However, the employees need to provide their employer 14 days notice if they choose to terminate their employment on their own.
Employers can now offer part-time paid work to those aged 15 and above while making sure to go through the right channels, which include getting formal permission from parents, completing a medical fitness check, ensuring that the job is not dangerous, and not permitting any work to be done after 7 p.m.
What are the changes to leaves in the new labor law in the UAE?
The new labor law in the UAE has added three new leave types:
- Bereavement/Compassionate leave following the death of a close family member: a period of 5 days for the death of a spouse and 3 days for the death of a parent, child, sibling, grandchild, or grandparent.
- Study leave of 10 days for employees who need to take exams, provided they have worked for the employer for two years and the course for the exam is taken from a UAE-accredited institution.
- Parental leave of 5 days, can be taken intermittently or consecutively within six months of the birth of a child.
In addition to these new leave types, the following changes have been made to existing leaves:
Maternity leave has been extended to up to 60 days (45 days with full pay and an additional 15 days with half-pay) whereas only 45 days of leave was permitted by the old law. Post-maternity illness allowance has been reduced to 45 unpaid days from 100 unpaid days under the old law.
The number of days of annual leave stays the same, with the exception that you can now legally seek paid annual leave during your probation period, and you must be paid your full pay for any annual leave you take.
Under sick/rest leave, employees are entitled to one paid day off every week, with the option of extra weekly leave days at the company's discretion.
How will the new labor law facilitate flexibility at work?
The new labor law seems to be intended to foster better work-life balance, for which the following regulations were introduced:
- The law recognizes working models such as conventional full-time work, remote work, shared jobs, part-time, temporary, and flexible work.
- Employers in the private sector have the freedom to choose their employees' working week. (Need not be Sunday-Thursday or Monday-Friday).
- Employees are not to work for more than 2 hours overtime each day, and overtime is limited to 144 hours per three weeks.
What are the other amendments?
The new regulations underline protection for all employees in the workplace. Discrimination based on race, color, gender, religion, nationality, social origin, or disability is prohibited. Employees will be more protected from harassment under the new guidelines.
In addition to rules forbidding discrimination, the new labor law in the UAE expressly states that all provisions governing the employment of workers without discrimination apply to women, with a focus on paying women the same wage as men if they accomplish the same or similar work or work of equal value. This is an important step towards equality for women at workplaces and it will be interesting to see how organizations implement this.
Article 27 of the New Law will establish a minimum salary, which will be a first for the UAE. Following a request by the Minister of Human Resources and Emiratization, and in conjunction with the necessary authorities, the UAE Cabinet will determine and announce the minimum salary amount. To aid this, UAE has also issued a salary guide that employers can use while making salary modifications.
Conclusion
The recent changes in the labor laws make UAE a very attractive market for the talent across the world. The bold approach in HR, centering around employee happiness and wellbeing will be a major driver to boost productivity and performance.
- Kiranjit Kaur, Account Manager - MENA, Darwinbox
As UAE unveils its first major overhaul of Labor Law after 1980, employers will have to respond quickly and communicate to employees how the new labor law will affect them. Stay tuned for more help from Darwinbox on how best to navigate these changes.
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