New UAE Labour Law comes into effect – all you need to know

Dubai: From February 2, 2022, the new labour law has come into effect in the UAE, effectively replacing the previous labour law - Federal Law No. 8 of 1980 and its amendments.

The new law – Federal Decree-Law No. 33 of 2021 on the regulation of labour relations – has brought in several changes to the previous law, like introducing three-year work contracts or new work models. It also covers various aspects governing the relationship between employers and employees in the UAE’s private sector, including gratuity calculations, employer and employee rights.

Here is a comprehensive look at 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

One of the biggest changes that will affect a big number of workers is the removal of the unlimited contracts. Earlier, contracts were either signed for a limited or unlimited period. However, Article 8 of the new law states that contracts shall be concluded for a definite period of time, which does not exceed three years.

The details of the contract will vary depending on the model of work that the worker has been contracted for. Read more here.

New models of work

Under the new law, workers in the UAE will have the option to work under not just a full-time work model, but a range of models, which include part-time work, temporary work, flexible work and more.

Probation period

Article 9 of the law covers the rights of an employer and an employee during the probation period, which is the initial period of hiring of an employee. The article covers various aspects of the probation period, like the maximum duration for which an employee can be on probation, which is six months, and what the rights of each party is, in case the employee wants to switch jobs during this period. Read more here.

New types of leaves

Under the new law, workers will also be able to avail different types of leaves, to cater to their personal needs and help strike a better work-life balance.

These include annual leaves, sick leaves, as well as bereavement leave, paternal leave, study leave and a paid sabbatical, which Emirati employees can avail of.

Also, apart from these leaves, you can also apply for unpaid leaves, provided you fulfil certain requirements.

Maternity leave extended to 60 days

In the new law, the entitlement of maternity leaves has been extended to 60 days, as compared to 45 days. Additionally, Article 32 also covers the option for a five-day paternal leave, which can be availed by both the father or mother of a child. Here is a detailed look at how the leave period is provided for, and whether you would receive a full or partial salary for the duration of the leave.

Flexible salary options

As per the new law, you can also avail of more flexible salary payment options, from getting paid in different currencies to weekly, daily or hourly payment plans.

Workplace injury

Articles 37 and 38 also look at the rights of employees if they suffer from any injuries at the workplace and the mistakes employees should not make, as in some cases they may not be entitled to compensation in case of injury.

Equal pay for equal work

One of the first few Articles in the law focuses on ensuring that employees do not face any kind of discrimination at the workplace, with the right to non-discrimination and equality highlighted in Article 4.

Clause no. 4 of this Article also stipulates that women should receive the same wage as men for the same work, or for a work of equal value.

Wage deduction

Article 25 of the law looks at different scenarios when an employer may deduct an employee’s salary, like if the employer has extended a loan to the employee. The law also puts a cap on the maximum amount of salary that may be deducted at 50 per cent.

Maximum working hours, overtime pay

Articles 17 of the new law stipulates that the maximum ordinary working hours shall be eight working hours a day or 48 working hours a week, as well as the economic sectors which can have longer working hours.

Also, the law has a detailed regulation on how overtime pay would be calculated, in Article 19. Find out more about the maximum amount of overtime work an employee can do, and how their pay is calculated for the extra hours worked, here.

Employment of juveniles

If you are a young UAE resident looking to get work experience in the UAE while you complete your education, the new law also provides details of how individuals from the age of 15 can be employed by the UAE’s private sector, while certain work conditions are maintained.

The rules that employers and employees need to abide by

In comprehensive lists of duties, the law covers the obligations of employers in the UAE’s private sector as well as the duties that employees need to fulfil. This includes upholding the trust that the employer has placed in the worker, by completing their tasks diligently and not work for other employers in violation of the detailed laws on part-time work.

The duties of employers are also highlighted in other places of the law. For example, in Article 6 of the law, employers have been expressly prohibited from collecting the cost of recruitment and employment from the workers, whether directly or indirectly.

Notice period

Article 43 of the law, titled ‘Notice of termination of employment contract’, stipulates that a notice period of 30 to 90 days needs to be served, regardless of which of the two parties (employer or employee) decides to terminate the work contract. This notice period can be waived off as well, if both the parties mutually agree to do so.

Gratuity calculation

Article 51 of the law provides a detailed explanation on how gratuity will be calculated for an employee, based on the length of their service.

Non-compete 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 by allowing the employer to execute a non-compete agreement with the employee. Read about what it means, and what conditions the non-compete clause should fulfil, here.

Mistakes that can get you fired without prior notice

Article 44 of the law also lists out mistakes that can land an employee in trouble, and lead to the termination of an employment contract, without prior notice. These include a failure to perform one’s duties as a worker, or getting involved in a verbal or physical assault.

Fines that employers face

Also, a sub-section of the law is focused on all the penalties that employers may face, if they violate employee rights. The fines can range from Dh20,000 and go up to Dh10 million, depending on the severity of the violation.