HR Update: UAE’s Labour Law revamped 2022
President His Highness Sheikh Khalifa bin Zayed Al Nahyan has issued Federal Decree-Law No 33 of 2021, regulating labour relations which comes into effect from February 2, 2022. The law will apply to all establishments, employers and workers in the country’s private sector.
Attracting talent and efficiency forward
Dr Abdul Rahman Al Awar, Minister of Human Resources and Emiratisation, said that the decree-law is one of the most significant changes made to the labour law since it was established. With an eye on attracting good talent globally, the goal is to create a flexible and competitive work haven for expats. It’s the next step in the journey prepped for UAE’s next 50 years. The law makes significant strides to enhance the competitiveness of Emirati cadres as well as empower women, in the UAE labour market.
He said that the Ministry of Human Resources and Emiratisation will work on proposing policies, strategies, and legislation to encourage and motivate enterprises to invest in training and empower workers, raise their skill-sets, efficiency and productivity, adopt modern technologies and attract the best talents according to the requirements of the labour market in the country, as well as train students of public and higher-education institutions accredited in the state.
The Ministry is working in tandem with all parties, including federal, local government and private sectors.
Key provisions under the new law:
- Flexible work hours
As per the new law, it allows flexibility to employees to fulfill the work hours as per requirement rather than to be bound to a full-time position. Mutually agreed between the employer and employee, this allows the employee to choose the time they work, for example, 40 hours a week, which could be completed over 3 days.
- Probation period
It cannot be more than 6 months and a two-week notice is to be given in case of termination by the employer. If employees want to change jobs during probation, a month’s notice is to be given else a 14-day notice if they are exiting the country.
- Exemption from Judicial fee
The decree allows an exemption for workers from payment of any judiciary fee at any stages of litigation or petitions, for a value not exceeding AED 100,000. As per the new law, employers cannot hold employees’ official documents and cannot recover directly or indirectly any cost related to recruitment.
- Three-year contracts
As per the new law, Limited contracts may not exceed 3 years and is renewable for a similar or shorter period based upon the agreement of parties.
The same provision of law applies to unlimited contracts with the provision that post enforcement of the law, all employment contracts will be converted to limited. Based on public interest, the cabinet decision may vary on the period of implementation.
- Leaves in private sector
In addition to one day paid mandatory off, it can be increased as per the company discretion. The other leaves introduced as benefits are compassionate leave of 3-5 days, based on the kinship of the bereaved, 5-day parental leave, study leave of 10 days if enrolled in an accredited institution in UAE.
- Maternity leave in the private sector
Maternity leaves are to be extended to 60 days of which 45 will be fully paid and 15 days on half-pay. New mothers can avail an extra 45 days without pay, in case of any post-partum complications or ailment of the newborn. Mothers of infants with special needs will be eligible for additional 30 days of paid leave after completing the initial maternity leave period, with a 30-day further extension with no pay.
- Prohibition of all forms of coercion at the workplace and discrimination
As per the new law, employees are protected against all forms of harassment and bullying, be it verbal, physical or psychological by employers or managers or colleagues. Employers cannot use any means of force or threaten or penalise to perform service or action against their will.
- Equal opportunity with no discrimination or prejudice
The law prohibits all forms of discrimination based on race, color, sex, religion, national origin, social origin or disability among persons that would weaken possibilities of equal opportunity, prejudice equal access to or continuation of employment and enjoyment of rights
- Equality in wages
The amendments stressed that while not violating the prescribed rights of working women stipulated in this decree, all provisions governing the employment of workers without discrimination shall apply to women, with emphasis on granting women the same wage as men if they are doing the same work or work of equal value, which will be determined by a decision of the Council of Ministers.
- Employment of teenagers
Minors less than 15 years of age cannot be recruited, and the work hours cannot be more than 6 with an hourly break. The written consent of guardians is a must along with a fitness report. They cannot work for any shifts starting from 0700pm to 0700am including exposing them to any risky jobs that may cause harm to their physical and mental wellbeing.
- Enhancing ease of business and labor market flexibility
In the forefront, the law introduces new types of work to allow employers to meet their labour requirements and benefit through lower operational costs through part-time, temporary, and flexible work, allowing employers to absorb workers whose contracts have expired but are still available in the country through fluid procedures and access.
Defining part-time, temporary, and flexible work
Part-time work allows an employee to work a specific number of hours for multiple employers, meaning fewer days per working week for one employer.
Temporary work is to be engaged for a limited period of time or related to tasks and their completion.
Flexible work is work for which working hours or workdays change according to the volume of work and economic and operational variables of the employer.
The executive regulation of the law will specify the conditions and control of work patterns and the obligations arising from each worker and employer, depending upon the type of employment — including what is related to end-of-service gratuity and as required by the interest of the two parties to the work contract.
- Working hours and overtime
A cap of 5 hours of continuous work with an hour of break is mandatory and a limit of a maximum of 2 hours of overtime is allowed in a day. Over and above the 2 hours, an overtime wage of equal to regular hourly pay with a 25 % increase to be applied and for the hours between 1000pm to 0400am, 50 % increase to be applied. Staff on shifts are exempted from this rule. Workers asked to work on days off, will receive either a day in lieu off or an overtime wage equivalent to regular pay with a 50% increase
- End of Service gratuity
Employers should pay end of services in the event of an employee’s death, to the family of the deceased within 10 days and also bear the cost of repatriation of the body to their native. End of service gratuity can be paid in UAE Dirhams or the employee’s chosen currency as agreed in the employment contract.
- Non-disclosure and non-competitive clause
The new law permits the employer to prohibit the employee from competing with the employer or taking part in a similar project in the same sector, due to the exposure to trade secrets, however, it has to be specified in terms of time, place, and type of work to the extent necessary to protect genuine business interests. The period of a non-compete cannot exceed two years from the date of contract expiry.
A sum-up of the major points as below –
1. It’s the biggest amendment enforced, ensuring the competence of the labour market, its fluidity, and its edge.
2. Attracting talent through equal opportunity and world-class benefits
3. Protecting the rights of both parties in a working relationship and bringing balance
4. Enhancing the edge of Emirati cadres in the labor market and empowering women
5. Allowing flexible, temporary, and partial work forms
6. Introducing leaves related to parenthood, bereavement, and others
7. Limited contracts enforcement for a period of three years, which can be extended or renewed by agreement between both parties.
8. Prohibition of discrimination, bullying, verbal, physical, and psychological violence against workers.
9. Enforcement of non-competitive clauses
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