UAE Labour Law Changes on 2nd Feb 2022! Read On

The Federal Decree-Law No.33 of 2021 repealing the Federal Labour Law Number 8 of 1980 and stipulating new regulations of labour relations in the private sector was issued by the UAE President His Highness Sheikh Khalifa bin Zayed Al Nahyanon. The Law will come into force from February 2, 2022.

The newly issued decree-law aims to enhance the sustainability and resilience of the UAE labour market and ensure the safeguarding of the rights of workers. Several measures have been taken to ensure a healthy, safe and friendly working environment for all private-sector employees. In a press briefing, the Minister of Human Resources and Emiratisation (MOHRE), Dr Abdulrahman Al Awar described the new Law as the UAE government’s deliberation for a competitive and flexible business and work environment over the next 50 years. The law has been documented in consultation with all interested parties and guarantees protection of interests of both employees and employers in a balanced and rightful manner, he informed.

The Minister further clarified that the new Law will help attract and retain the best talents and in turn improve the effectiveness and productivity in the labour market. The law will also help improve the competitiveness of the local Emirati workforce including women, he elaborated. The new law now complies with the requirements of international labour laws, he pointed out. He also stressed the need for workforce training. Employers from all private sectors must replace all existing employment contracts with the MOHRE with new employment contracts that must comply with the change requirements as stated in Law No. 33 of 2021, within a maximum period of one Gregorian year from the date of the law’s implementation making February 01, 2023, as the last date for making changes in the contract.

The important changes made in the new Decree-Law are summarized as under.

1. 1. In Article 74, the decree-law stipulates No Forced Labor and the employer may not use any means that would force the worker to work against his/her will or threaten him/her with any penalty.
   2. The law prohibits sexual harassment, bullying or any form of verbal, physical or psychological violence against a worker either by the employer or his/her superiors at work or colleagues.
   3. All forms of discrimination based on sex, race, colour, religion, national or social origin or disability are forbidden in the new law.
   4. The executive regulations mandate equality of pay without discrimination to women and grant women the same wage as men if they are doing the same work or work of equal value.
   5. The Decree-law introduced new types of work to allow employers to fulfil their labour requirements at reduced cost through part-time work, temporary work and flexy work including hiring those whose work contracts have expired but who are still in the country.
   6. Contrary to the earlier labour law, the new law stipulates that once a person is hired by an employer on a probationary basis, the employer is not allowed to dismiss the employee without serving a 14 days’ notice to the employee.
   7. The earlier provisions for end of service gratuity reduction has been withdrawn and the employees who tender their resignation are entitled to a full end of service gratuity payment subject to completing at least one full year of employment. Provisions about pension and other savings schemes are not specifically spelt out in the executive regulations.
      As per the new law, a foreign worker who has worked full-time and completed one year or more of continuous service with an establishment shall be paid end-of-service benefits calculated according to the basic wage. A wage of 21 days for each of the first five years of service and 30 days for each subsequent year shall be paid.
   8. The decree-law addresses Article 10 stipulating the ‘non-competition’ clause and allows employers to include non-competition restrictions in the employment contract forbidding an employee who has access to sensitive business information to work for a prospective employer who is in a similar line of business as that of the employer.
      In a significant shift from the earlier law where the former employer didn’t need to restrain the employee by executing a ‘Non-Competition Agreement’, the new law stipulates that former employer mandatorily include this clause, if it wishes to protect its business interests, a Non-Competition Agreement in the employment contract.
      The employment contract must include
      – a time period not exceeding more than two years from the date of leaving his/her former employer
      – the geography within which the employee is forbidden to take up employment
      – the types of works that would be forbidden
   9. The law now permits companies the flexibility to pay salaries either in UAE dirhams or in any other currency and as documented in the employment contract
   10. Article 8, clause 3 of the decree-law on ‘Employment contract’ specifies that the Employment Contract shall be a fixed contract and shall not exceed three years. The employment contract, however, may be renewed on the same condition with mutual consent, once or more than once, for an equal or a shorter period. The new law now abolished unlimited contracts.
   11. New types of leaves have been introduced in the new law specifying mourning leave, study leave and parental leave. Extending maternity leave has been proposed. The law provides details on how an employee can avail sick leave and unpaid leave. The Cabinet will decide on any other leave.
   12. Employers have been assigned the responsibility to pay for the fees and other associated costs of recruitment.
   13. The new law prohibits withholding official documents, such as passports of an employee at the end of the contract and mandates the employer to pay wages on the due date following the regulations approved by the MOHRE following the conditions and procedures as specified by the Executive Regulations.
   14. On the expiration of an employment contract, an employee is allowed to move to another employer. A probationary period for the worker may not exceed six months, by the executive regulations.
   15. The law provides for the waiver of judicial fees in all stages of litigation made by workers or their heirs, with a cap of AED100,000.
   16. The new law specifies the employer’s obligations of the employer in establishing labour regulations, providing adequate accommodation, protection and prevention including training and skill development of workers.
   17. The law provides an option for shorter work weeks, if employment contract permits, specifying that an employee may work for 40 hours in a week as against 48 hours previously.
       The decree-law specifies regulations on the controls and conditions for terminating work contracts balancing the rights of both parties. The amendments strengthen the juvenile employment controls and entitlements of the deceased employee including the requirements for occupational safety.