Federal Decree Law No. 33 of 2021, sometimes known as the “Law,” is the new labour law that the United Arab Emirates adopted on February 2, 2022, replacing Federal Law No. 8 of 1980.

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As a result, the new Law’s modifications mandate that employers doing business in the UAE take the required actions to guarantee compliance with the new or modified rules.

The new Law’s enactment attempts to address the difficulties and demands of the labour market, which has seen a major transformation in recent years. The new Law also demonstrates the UAE government’s commitment to put in place a legal system that complies with international norms.

Application area

Employers and workers in the UAE’s private sector shall be subject to the Law. Unless future ministerial decisions or decrees carve out exceptions to the Law’s requirements, it will not apply to domestic workers, members of the military forces, police, or security services.

Work Models

  • Working part-time is dedicating a set number of hours or days to one or more employers.
  • Work that must be finished in a certain amount of time or for a specific job is referred to as temporary work.
  • Work that is flexible allows you to complete some or all of it from a distance.

While the new Law defines working models, we anticipate additional cabinet or ministerial decisions to specify their contractual conditions and advantages.

More importantly, the new Law’s adoption has given firms more choices to satisfy their hiring demands. Additionally, it will provide workers who prefer unconventional working arrangements flexibility.

The establishment of new visa categories

Significant modifications to the current immigration environment have been made by the Ministry of Human Resources and Emiratization. To reflect varied sponsorship and employment arrangements, the Executive Regulation of the Law refers to 12 different types of work permits.

Freelance visa allows anyone looking to work for themselves without the sponsorship of a specific company or the need for a legally binding employment contract. This is comparable to the freelancer visa that is offered to foreign nationals in various free zones in the UAE.

According to the Executive Regulation of the Law, new work permits may be added by a separate decision made in compliance with the Law’s requirements. By ensuring that working models are best suited to the unique and particular circumstances of firms and individuals, this is crucial for increasing the labour market’s flexibility.

Employment agreements

According to the new Law, limited term employment contracts can only last for a maximum of three years, and unlimited term employment contracts are no longer lawful. Therefore, within a year of the Law’s enactment, employers must begin with changing their current limitless contractual arrangements to restricted contractual agreements.

Furthermore, without incurring additional end-of-service fees, businesses have the option of declining to renew the employee’s contract.

The scope of the job

The Law expressly forbids extending an employee’s scope of work or giving them obligations that are materially different from those outlined in their employment contract, unless the following requirements are met:

Employee’s written consent is obtained before adding or changing the scope of work.

There is a 90-day cap on additional responsibilities or amended scope of work.

As a result, the new Law guards against coercing workers into taking on extra or undesirable obligations that are not included in their employment contracts.

Non-competition clause

The new Law specifies the conditions and timeframes under which covenants not to compete are enforceable and legitimate. If the following circumstances are satisfied, employers may directly activate the non-compete provision at the time of the employee’s departure or termination:

The nondiscrimination provision

The new Law’s ban on discrimination based on gender, sex, religion, age, and national origin in the workplace is one of its most notable provisions. Some nationalities can take advantage of this to increase their engagement in the work market.

The new Law has incorporated the following provisions in an effort to encourage an anti-discrimination culture inside UAE organisations.

Employers must ensure that female employees receive equal compensation for comparable labour, and they also have a duty to shield their staff from harassment, abuse, and violence.

In order to guarantee that all obligations under the Law are represented in their internal policies and employment contracts, companies must assess their current employment policies. Employers are also urged to conduct training and awareness programmes inside the company to inform staff members of their rights and obligations.

Leave

The following extra leave clauses must now be included in the employment contract in conformity with the new Law:

Currently, female employees are entitled to 60 days of maternity leave, of which 45 days are paid in full and 15 days are paid in half. Additionally, the duration of the employee’s employment is no longer a factor in determining whether she is eligible for maternity leave.

Employees are entitled to a five-day bereavement leave.

Employees who have worked for at least two years are eligible for ten working-days of study time if they are enrolled in one of the accredited educational institutions in the United Arab Emirates.

Within the first six months following the child’s birth, employees (mothers and dads) are entitled to parental leave of five working days, whether continuously or sporadically.

Aside from the fact that employees still have the same fundamental yearly leave rights, businesses are no longer compelled to pay for unused leave or allow employees to roll over unused days to the next year, unless the employer has already agreed to do so.

Rules in the workplace

According to the new Law, businesses with more than 50 workers are required to put internal rules and procedures in place that deal with matters linked to the workplace, such as working hours, promotions, incentives, disciplinary actions, and health and safety.

Employers must thus review their current policies and processes and adjust their framework to comply with the Law’s requirements. Additionally, businesses are urged to hold training and awareness seminars on the new guidelines, processes, and rights and obligations of their staff members.

Financial risk/responsibility for consequences

In accordance with the new Law, employers must have a sufficient investigation management and case resolution mechanism in place to permit employees to voice complaints, end the investigation promptly, and inform the employee of the findings of the investigation as well as the justification for applying penalties.

Implementation of a programme for unemployment insurance

The United Arab Emirates has implemented an unemployment insurance programme for both private and public sector employees. The new programme will go into effect in 2023 and will pay 60% of the employee’s base pay. In the case of unemployment, insured employees will get up to AED 20,000 in cash. Workers who want to obtain financial assistance until they secure a new job will have access to it.

Investors, domestic workers, those with temporary employment contracts, retirees with pension plans, minors, and anyone under the age of 18 are all exempt from receiving unemployment insurance benefits, nevertheless. The employee must additionally obtain unemployment insurance coverage, which entails a small yearly contribution to the plan, in order to get unemployment insurance benefits.

The cost of implementing the Law’s provisions, including the cost of any additional leave provided under the Law, must also be recognised and taken into consideration when the UAE organisations start to execute the new Law:

  • Parental leave (15 additional days at half pay)
  • study leave (ten days)
  • father’s leave (five days)

Furthermore, firms must develop a clear strategy and a budget to correct any gender pay inequalities in order to comply with the equal pay for equal work requirement.

In order to guarantee that all workers are aware of the new Legislation’s provisions, it is crucial that the principles and requirements of the new law are outlined in the entity’s Employee Handbook and Code of Conduct Policy.

To achieve compliance with the new Law’s requirements, Sara Advocates and Legal Consultants can help you and your organisation design policies, processes, a risk-based obligation register, and training.

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