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UAE labor law

Introduction to UAE Labor Law

Before the end of 2024, businesses in the UAE have a big list of projects to finish. If they wish to maintain their conformity with UAE labor law and HR guidelines, they must do this. You must therefore familiarize yourself with all of the most recent changes to UAE labor law, if you are not already. As a consequence, you will be able to bring them into effect and adhere to them.

In this article, we will be giving you an introduction about the UAE labor law and its recent changes. These include whole new employment opportunities, adaptable work agreements and schedules, employee protection, and more. You will understand the advantages of these amazing new improvements once you are aware of them. Let’s investigate!

Major Sections of UAE Labor Law

UAE labor law

The UAE Cabinet approved a number of new limits to the new labour law in UAE 2022 for private sector. The government announced a first outline and release of these amended laws in November 2021. As they increase worker rights, many things will become available that were not before.

But employers should be aware that the new adjustments will alter how the private sector handles employment. For instance, the labour law UAE will cover shorter, fixed-term contracts, shared tasks, and flexible working hours. Additionally, private sector workers are now permitted to remain in the region for 180 days after their employment ends.

These agreements, which are now in place, take into consideration employees shifting careers and undergraduates when it comes to job sharing. However, the UAE labor code 2022 also incorporates significant leave-related adjustments alongside to all of these other reforms. If you work in the area and this worries you, for instance, you must be aware of the latest modifications to the parental leave regulations and others.

However, if you are the proprietor of a private company in the nation, you must inform your staff of these changes. Leaders of private sector businesses in the UAE must be aware that breaking the new regulations could have serious legal repercussions. These include steep fines and penalties for violations.

Emiratization is a significant component of the new labour law in UAE 2022. Additionally, it forbids all sorts of bias. including those that discriminate against people because of their gender, ethnicity, belief system, socioeconomic status, citizenship, or disability. Additionally, the new labor law in the UAE will give workers more protection against harassment.

Employment Contracts

A labor contract is a written arrangement that both the company and the worker must sign in the United Arab Emirates. The employment contract UAE is enforceable if both parties have signed it. The terms of an employee’s employment agreement define the nature and extent of their position. It usually also includes deadlines, plans, and work objectives.

Both the employee and the employer are equally bound by an employment contract. All necessary wages and benefits must be provided by the employer in accordance with the provisions of the contract.

The labor contract regulation in the UAE allows for a wide variety of contract of employment options. You must understand the following agreement types:

Employers must be aware that the various contract types will have an impact on how they conduct legal business in Dubai. You also need a work permit and a residency visa in order to find employment in the UAE for any kind of industry.

Working Hours and Leave

The number of hours you must put in when working in the UAE must be understood by you. The maximum amount of work that an individual might have to perform varies depending on their occupation, sector, and level within an organization, according to the UAE Labor Law.

In the private sector, an average workweek is 48 hours, or 8 hours each day. Higher education workweeks split into four-hour days for public sector workers. If a job takes longer than five hours, employees must be able to take some time off in between.

The total amount of hours worked over a 6-day workweek must not exceed eight per day, or 48 hours. The typical workday may even extend to nine hours in some companies. Ramadan, the Islamic holy month, sees a two-hour reduction in daily work hours.

The annual leave that an employee takes advantage of must happen as soon as possible. They may be eligible for redeem before the year is through if they fail to use the leave.

For the first six months, employees can accrue time at a rate of 2 days every month. Legally speaking, an employee who has been working by a company for a year has the right to one month of leave. The following types of extraordinary leave that appear in the UAE Labor Law:

  • Maternity leave.
  • Compassionate leave.
  • Study leave.

Also, according to the UAE labor law 2022, employers in the UAE must observe the following public holidays:

  • Gregorian New Year.
  • Eid Al Fitr.
  • Arafah Day.
  • Eid Al Adha.
  • Hijri New Year.
  • Prophets Mohammed’s Birthday.
  • Commemoration Day.
  • National Day.

Wages and Salaries

There is now no countrywide minimum wage or revenue because the UAE labor legislation does not contain any minimum pay rules. However, it is essential that workers’ earnings and incomes cover their basic needs. The minimum wage and salary for UAE citizens are now determined on their level of education.

As a result, it is advisable to hire payroll outsourcing help since they are capable of handling the payment of the minimum wage.

The UAE labor legislation does not specify the particular components that must be included in an employee’s salary. Salary in the UAE is not subject to income tax, hence there are no necessary tax deductions. The national pension programs, however, require mandatory contributions from UAE nationals.

Businesses have to pay the staff through the WPS after they complete the hiring procedure with a staffing agency. Consequently, the government can monitor if the employers are paying their employees appropriately in this way.

Termination and Resignation

When a job ends, the employee leaves their position at the employer’s desire. While most people believe that termination means being fired, it can also mean being laid off.

The act of leaving your own work is referred to as resignation, or resigning. When you formally declare your resignation to your boss, you are ending your relationship with the company or your contract with it.

Employees typically leave their positions when they find new employment or for private reasons. Keep in mind that companies have a duty to pay gratuity under the UAE New Labor Law of 2022 if employees give notice of their resignation.

Contracts may be cut at any time during the term with notice under UAE labor legislation. But only if there is a good justification for it. This is only possible if the party gives the required written notice as per the terms of the employment contract. It is increasingly acceptable to fire an employee for reasons other than subpar work or unacceptable behavior.

Today, redundancies are a valid ground for dismissal. Only in the event of the company experiencing a severe financial hardship, insolvency, or bankruptcy. This is perhaps the most notable.

Changes have been made to end-of-service tips under the new UAE labor code. All employees are now qualified to receive the full end-of-service bonus.

However, in order to be eligible for a gratuity, employees must work for their company for at least of one year.

Dispute Resolution

The employer, the employee, or the employee’s beneficiary may register a complaint with the MOHRE in the case that one of the terms of the employment contract or their rights under the UAE Labor Law has been violated. No complaint for any rights that are due shall be considered after a year has passed since the violation. The employee may request a temporary work permit from the Ministry of Human Resources & Emiratization in order to work for another company while the matter is pending and until it is resolved.

Additionally, a worker who is having a court refer a complaint they filed against their employer must adhere to the following rules:

  • File the labor complaint with the relevant court in 14 days of the competent court’s approval of the referral.
  • Operating for another company without a temporary work permit from the MOHRE is illegal.
  • The first work permit must be cancelled in 14 days of when a final judgment is given ending the parties’ employment relationship.
  • With the exception of individuals who have been declared missing by their supervisors, the worker may submit a “unexpected work abandonment Report” to request a temporary permit to work with another company while the labor case is in process.

The UAE provides contesting parties with a choice of three judicial systems, each of which operates under a different jurisdictional regime. These are the offshore tribunals, which consist of two ordinary law free zones, and the local onshore courts.

Employee Rights and Benefits

Employee perks are extra incentives that a company offers to its workers on top of their base pay or other compensation. These perks may be monetary or include other things that boost an employee’s overall revenue. Here below are a few typical employee benefits:

  • Employees’ provident fund.
  • Employee health insurance.
  • Paid leaves.
  • Statutory leaves.
  • Maternity/paternity leaves.
  • Allowances and compensation.

Both natives and foreigners have the right to job perks and compensation in the United Arab Emirates. All compulsory perks for workers go to all employees nationwide, with the exception of a few particular advantages that are only available to citizens of the UAE.

Notice Period

When a contract ends, the UAE labor law requires a notice period to take place. Even though notice durations are now 90 days, the minimum notice time is still 30 days. Employers who have to deal with the firing, replacing, and recruiting of senior executives are likely to find this tendency to be unwanted. Since these frequently have six to twelve-month notice periods.

If an employee wishes to resign from their post while on probation, they must give no less than 14 days’ notice.

Probation Period

An employee may only stay on probation for a total of six months in the UAE. During this time, the employer has the right to terminate the employee with 14 days’ notice.

Types of Employment Contracts

UAE labor law

There are two popular types of employment contracts that you must know about when hiring in the UAE:

Limited Term Contract

According to the new labor law for limited contracts in the UAE, the duration of this contract corresponds with the duration of the resident visa. Consequently, taking into account the employee’s location, it might be given for two or three years. Unless the UAE decides to terminate it earlier or renew it, this agreement will cease when it expires in the UAE.

A limited-term contract is the best choice if a business needs to recruit people in the UAE for a certain set of duties. It is important to emphasize that the employment durations are fixed. No-notice clauses are typically included in limited-term contracts. Thus, they simply become invalid after the requirements have been fulfilled or on the due date. Unless either party terminates it earlier.

Under the UAE Labor Law, the employer may terminate a worker’s contract altogether on any of the 11 grounds. An employee may lawfully terminate their employment before the end of the contract in accordance with the provisions of Article 121 of the Act. Since the majority of employees in the UAE filed letters of non-renewal, fixed-term contract resignations were very common there.

According to the new labor law for a limited contract in UAE, they must at the very least have the following details:

  • Beginning date
  • End date.
  • Type of work.
  • Place of labor.
  • Compensation amount.
  • Time frame.

Unlimited Term Contract

An infinite-length contract has no constraints and can be terminated for any reason, as per UAE labor law.

Contracts with an indefinite duration are frequently considered to be more reasonable and flexible than those with a set duration. As a result, contracts with indefinite lengths predominate over those with finite terms in the highest-paying jobs in the UAE. If the duration of the project is known in advance, it is possible to put it in place for contract workers who are not involved with projects.

According to the new UAE labor law for unlimited contracts, they must at the very least have the following details:

  • Beginning date
  • Type of work.
  • Place of labor.
  • Compensation amount.
  • Time frame.

Agreements with flexible scheduling clauses may provide employees some control over how long they work. Additionally, an employer may ask a worker to maintain an array of work arrangements over the course of a year.

An employee’s hours are erratic in both situations. The company must nevertheless follow the regulations governing overtime and task restrictions.

When hiring staff in the region, it is crucial to become knowledgeable about local labor laws. As a result, you must learn everything you can about this topic as an employer. Visit our blogs area if you want to find out more regarding this and other subjects. Connect Staff is here to help you with any issues you may be having regarding recruiting in the UAE!

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