New UAE Labour Law: What are the big changes and how will they affect you?
What are the key takeaways from the new legislation? Find out.
Dubai: A new labour law will soon come into effect as President His Highness Sheikh Khalifa bin Zayed Al Nahyan issued Federal Decree-Law No 33 of 2021 on the Regulation of Labour Relations. The law, which will be replacing Federal Law No. (8) of 1980, was announced during a press conference on November 15,, 2021 by Dr Abdul Rahman Al Awar, Minister of Human Resources and Emiratisation.
What are the big changes in the new labour law and how will it affect you? Gulf News spoke with legal experts in the UAE to break down the key takeaways from the new law.
Samir Kantaria, Partner, Head of Employment and Incentives at Al Tamimi & Company, spoke about the impact the new law is expected to have on labour relations in the country.
“The new UAE Labour Law is the most comprehensive and significant change to the country’s labour laws since 1980. It is designed to align UAE labour legislation with international best practices on various fronts, such as the formal establishment of atypical or flexible working arrangements and the introduction of statutory obligations relating to anti-discrimination, equal pay and, protection from bullying and sexual harassment," he said.
“UAE legislators have recognised the need to enhance existing or provide additional protections in the law for both employers and employees alike, which is a very welcome development," he added.
The new UAE Labour Law is the most comprehensive and significant change to the country’s labour laws since 1980.
Summarising the shift in the law that will govern labour relations following the announcement, Ahmed Elnaggar, Managing Partner, Elnaggar & Partners said: “Firstly, it was decided to implement the [new] law from February 2, 2022, provided that Law No. 8 of 1980 is abolished as soon as this law comes into force, while retaining all federal decrees and decisions regulating the work relationship until another issuance.”
Federal Law No. 8 of 1980 on the Regulation of Labour Relations
What is the new law?
Federal Decree-Law No 33 of 2021 on the Regulation of Labour Relations
When does the new law come into effect?
February 2, 2022
1. New employment contracts should be drafted: Deadline – February 1, 2023
With the law coming into effect from February 2, 2022, new contracts will need to be drafted by companies in the private sector.
“All private sector employers must replace the current employment contracts with the Ministry of Human Resources and Emiratisation (MOHRE) with new employment contracts that are in line with the changes as stated in Law No. 33 of 2021, within a maximum period of one Gregorian year from the date of the law’s implementation so that the date February 01, 2023 becomes the deadline for making these changes,” Elnaggar added.
All private sector employers must replace the current employment contracts with the Ministry of Human Resources and Emiratisation (MOHRE) with new employment contracts that are in line with the changes as stated in Law No. 33 of 2021, within a maximum period of one Gregorian year from the date of the law’s implementation so that the date February 01, 2023 becomes the deadline for making these changes.
2. No more unlimited contract
Under Article (8) of the new law, titled ‘Employment contract’, Clause 3 states: “The Employment Contract shall be concluded for a definite period of time, which does not exceed three years. The employment contract may be extended or renewed once or more than once, for an equal or a shorter term.”
This will effectively impact the duration for which employment contracts are signed.
“The new law has abolished unlimited contracts in general, replacing them with work contracts of fixed term for a period of three years, which may be renewed on the same conditions with the consent of both parties for a similar period or less for one time or more than once,” Elnaggar said.
3. New types of leaves – mourning leaves, study leaves and more
Elnaggar also highlighted how the new law provides special leaves for employees.
“It was decided to give the worker some special leave days based on new rules,” he said.
These are:
1. a mourning leave of five days in the event of the death of the husband or wife,
2. a mourning leave of three days in the event of the death of a father, mother, grandfather, grandmother, sons, brother, sister, grandchildren, starting from the date of death,
3. a parental leave of five days, which is the leave granted to spend time with the family for the worker who has a new-born within a period of six months of the child being born and to be used intermittently or continuously,
4. a studying leave of ten days for the worker who has to take exams provided that he completes two years working with the same employer.
The new law also provides a longer maternity leave to women, with 45 days with full pay and the next 15 days with half pay, along with other articles also providing details of how an employee can avail of sick leaves and unpaid leaves.
4. Prohibiting discrimination, forced labour, harassment, bullying
In a social media post highlighting this aspect of the new Labour Law, MOHRE highlighted the various ways in which the new law addresses employee rights: “The new Regulation of Labour Relations Law in the UAE strengthens the principle of equal opportunities, emphasises equal access to jobs and enjoyment of their rights. It also prohibits all forms of discrimination, bullying, violence, harassment, coercion, and threats in the work environment.”
Jihene Arfoui, a legal advisor at a Dubai-based company, commented on what the new law specifically addressed: “The employer may not use any means that would force the worker or threaten him with any punishment to work for him or force him to do work or provide a service against his will. It also prohibited sexual harassment, bullying, or practising any verbal, physical or psychological violence on the employee by the employer, his superiors at work, his colleagues or those working with him.”
5. Equal pay for equal work for both men and women
Apart from articles prohibiting discrimination based on race, colour, sex, religion, national origin or social origin, Article 4 on ‘Equality; non-discrimination’ also specifies the right of women to equal treatment.
“The amendments affirmed that without prejudice to the rights of working women stipulated in this Decree-Law, all provisions regulating the employment of workers without discrimination shall apply to working women, with an emphasis on granting women the same wage as men if they perform the same work or other work of equal value. It will be determined later by a decision of the Council of Ministers,” Arfoui said.
The amendments affirmed that without prejudice to the rights of working women stipulated in this Decree-Law, all provisions regulating the employment of workers without discrimination shall apply to working women, with an emphasis on granting women the same wage as men if they perform the same work or other work of equal value.
6. New models of work announced
One of the most significant amendments in the decree-law, Arfoui said, was the new models of work that will enhance the ease of business and the flexibility of the labour market. These include full-time, part-time, temporary or flexible work.
“These allow employers to meet their labour needs and benefit from their energies and productivity at the lowest operational costs through part-time work, temporary work and flexible work in parallel with providing several options for employers to employ workers whose work contracts have expired and who are in the country through easy and flexible procedures,” she said.
Here, too, the executive regulation of the decree-law, which will be announced at a later date, will specify the conditions and controls of work patterns and the obligations incurred by both the worker and the employer according to each type.
7. The chance to have a shorter work week
Another new option that the law provides, according to Dr Ibrahim Al Banna, CEO of Ibrahim Al Banna Advocates and Legal Consultants, is the ability to work on a ‘condensed working hours model’.
“Speaking about the working hours, an employee, as per Article 65 of the current law, is supposed to work for eight hours per day or 48 hours in a week. But the new law, on the other hand, gives an option to the employee – provided that his or her employment contract allows it – to work for 40 hours in a week on a condensed working hours model,” he said.
8. Employer needs to give a 14-day notice of termination during probation period
“Once a person, as per the current law, is hired on a probation basis, the employer was expressly entitled to dismiss the employee during or at the end of the probation period. But an employee, as per the new law, who has been hired by an employer on a probationary basis shall not dismiss the former without serving a 14 days’ notice by the latter,” Dr Al Banna said.
The new law gives an option to the employee – provided that his or her employment contract allows it – to work for 40 hours in a week on a condensed working hours model.
9. Non-competition clause
Article 10 of the new law, which regulates the non-compete clause of contracts, also brings certain changes made to the earlier law, further strengthening the rights of an employer.
“Though the earlier law, through Article 127, restrains an employee from working for a prospective employer that carries out a business which competes with his or her former employer’s business, it was not mandatory for the former employer to restrain the employee by executing a ‘Non-Compete Agreement’. But the employer, as per the new law, shall be statutorily bound to, if it intends to protect its business interests, execute a Non-Compete Agreement with the employee,” Dr Al Banna said.
The agreement would be required to consist of the following factors:
a) An ascertained duration which shall not be more than two years during which the employee shall not work for a prospective employer which competes with the former employer;
b) The geography within which the employee shall be restrained from taking up an employment; and
c) The types of works which the employee shall not be allowed to take up for the ascertained period of time in order to shield the business interests of the former employee.
“Above all, the former employer shall, subject to whether the employee had access to information which is regarded as sensitive, execute a Non-Compete Agreement with the latter,” he added.