The United Arab Emirates (UAE) has established a robust framework of labour laws to regulate the relationship between employers and employees, ensuring the rights and responsibilities of both parties are well-defined. This guide provides an overview of key aspects of the UAE Labour Law, offering insights into employment contracts, working hours, leaves, wages, and more.
Employment Contracts
In the UAE, employment contracts are mandatory for all employees in the private sector. As per Federal Decree Law No. 33 of 2021, which came into effect on February 2, 2022, all employment contracts must be fixed-term. These contracts can be renewed or extended upon expiry. If a contract is not renewed but both parties continue to fulfill their obligations, it is automatically considered renewed under the same terms. Existing unlimited contracts are required to be converted into fixed-term contracts.
Types of Work Arrangements
The UAE Labour Law recognizes various work models to accommodate different employment needs:
- Full-time: Employees work for a single employer on a full-time basis.
- Part-time: Employees work for one or more employers for specific hours or days.
- Temporary Work: Employment is based on a specific assignment or project with a defined duration.
Working Hours
The standard working hours in the UAE are eight hours per day or 48 hours per week. During Ramadan, working hours are reduced by two hours per day. Overtime is permissible but should not exceed two hours daily, and employees are entitled to compensation for overtime work.
Leaves and Holidays
Employees are entitled to various types of leave, including:
- Annual Leave: A minimum of 30 calendar days per year.
- Sick Leave: Up to 90 days per year, comprising 15 days at full pay, 30 days at half pay, and the remaining 45 days without pay.
- Maternity Leave: Female employees are entitled to 60 days of maternity leave, with 45 days at full pay and 15 days at half pay.
- Public Holidays: Employees are entitled to public holidays as announced by the UAE government.
Wages
Wages must be paid in the UAE dirham (AED) and through the Wage Protection System (WPS) to ensure timely and full payment. Deductions from wages are permissible only under specific circumstances outlined in the law.
Employee Benefits
Employers are required to provide health insurance to their employees. Additionally, upon termination of employment, employees are entitled to an end-of-service gratuity, calculated based on the length of service.
Workplace Health and Safety
Employers must provide a safe working environment and take necessary precautions to protect employees from occupational hazards. Regular health and safety assessments are mandated to ensure compliance.
Non-Compete Restrictions
Non-compete clauses are permissible in employment contracts, restricting employees from engaging in competing activities after the termination of their contract. Such clauses must be specific in terms of time, place, and nature of work, and should not exceed two years.
Gender Equality and Discrimination
The UAE Labour Law prohibits discrimination based on gender, race, color, religion, nationality, or disability. Equal pay for equal work is mandated, and any form of workplace harassment is strictly forbidden.
Disciplinary Rules
Employers have the right to impose disciplinary actions for violations of workplace regulations. However, such actions must adhere to the procedures outlined in the law, ensuring fairness and transparency.
Termination of Employment
Employment contracts can be terminated by mutual agreement, upon expiry of the contract term, or by either party with notice. Unlawful termination entitles the affected party to compensation.
Work Permits and Visas
All expatriate employees must possess a valid work permit and residency visa. Employers are responsible for obtaining and renewing these documents in compliance with UAE regulations.
Emiratisation
The UAE government encourages the employment of UAE nationals in the private sector through the Emiratisation program. Certain industries are required to meet specific quotas for hiring nationals.
Partnering with Rosemont Partners
Navigating the complexities of UAE labour laws can be challenging for businesses. Rosemont Partners, a leading global provider of independent corporate services and wealth management solutions, offers comprehensive support to ensure compliance with local regulations. Their services include company formation, corporate secretarial and administration, accounting and tax services, and assistance with UAE residency. With offices in Abu Dhabi and Dubai, Rosemont Partners combines innovation, creativity, and a client-centric approach to empower global success.
Conclusion
Understanding and adhering to UAE labour laws is essential for fostering a fair and productive work environment. Employers and employees alike should stay informed about their rights and obligations to maintain harmonious workplace relations. For businesses seeking expert guidance, partnering with experienced consultants like Rosemont Partners can provide valuable support in navigating the legal landscape of the UAE.
