The United Arab Emirates’s burgeoning innovation industry, business-friendly atmosphere, and young, digital-savvy population are helping it fast emerge as a global leader in the remote work revolution. Businesses looking to develop effective remote or distributed teams by having access to this brilliant pool of workers must comprehend the UAE’s evolving job environment. Given this dynamic work environment, it is essential to comprehend both the more general labor standards detailed in Federal Law No. 8 of 1980 and the recently implemented Federal Decree-Law No. 33 of 2021, which regulates remote work and flexible work arrangements. Managing the intricacies of free zone legislation and the favorable business environment are also essential to a successful operation.

Beyond only adhering to the law, maintaining a cohesive and motivated remote team also necessitates fostering transparent and regular communication via appropriate technological platforms and tools. Encouraging training and development opportunities for staff members also ensures that remote workers retain the skills and knowledge necessary for success. By taking early steps, businesses may take advantage of the UAE’s vast talent pool for remote workers and create obedient, effective teams in this exciting and dynamic setting.

Main Sources of Employment Law in the UAE

The employment regulations in the United Arab Emirates derive from multiple significant sources, amalgamating to establish a comprehensive framework that governs relationships within the workplace. It is crucial for both employers and employees to familiarize themselves with these sources to ensure adherence to regulations and ensure fair treatment.

1. Federal Laws:
   The foundation of employment law in the United Arab Emirates is the Labour Law, Federal Law No. 8 of 1980, Regulating Labor Relations. This law outlines fundamental rights and responsibilities of workers, including aspects such as minimum wages, working hours, leave entitlements, and termination procedures. Additionally, Federal Decree-Law No. 33 of 2021 introduces regulations on flexible work arrangements like remote work, part-time work, and flexible working hours. Other pertinent federal laws address specific areas such as labor disputes, occupational safety and health, and social security.
2. Ministerial Orders and Decrees:
   The Ministry of Human Resources and Emiratisation (MOHRE) issues ministerial orders and decrees that supplement and clarify the Labour Law and other federal laws. Employers are obligated to comply with these orders as they hold legal validity.
3. Local Emirate Laws:
   Beyond federal laws, each emirate in the UAE has its own set of employment regulations. These regional laws may address specific issues or sectors relevant to the local economy.
4. Contracts:
   Legally binding employment contracts between employers and employees cover terms and conditions not explicitly outlined in the Labour Law or other sources. These contracts must, however, adhere to the minimum requirements stipulated by law.
5. Islamic Law (Sharia):
   Although not a direct source of employment law, Sharia principles can influence interpretations and decisions, especially in areas related to personal status and religious holidays.
6. International Conventions:
   The UAE has ratified various international labor rights conventions. While these agreements may not be immediately enforceable in national courts, they can have a persuasive impact on how national laws are interpreted.

Navigating the intricate legal landscape in the UAE necessitates a comprehensive understanding of these diverse sources of employment law. Staying informed enables both employers and employees to ensure compliance and foster enduring, fruitful working relationships, with the option of seeking professional advice when necessary.

 

Employment Contracts in the UAE

Employment agreements in the United Arab Emirates (UAE) are legally binding contracts between employers and employees that delineate the terms and conditions of employment. These contracts play a crucial role in safeguarding the rights of both parties and establishing a just and harmonious working relationship.

Critical components of a UAE employment contract encompass:

1. Contracting parties: Identification and contact details of both the employer and the employee.
2. Position and responsibilities: The job title of the employee along with a comprehensive description of their duties and obligations.
3. Commencement date and duration: The initiation date of employment and the specified duration of the contract, whether fixed-term or unlimited.
4. Compensation: The employee’s salary, benefits, and any additional allowances.
5. Working hours and leave entitlements: Specification of regular working hours, overtime arrangements, and annual leave entitlements for the employee.
6. Termination conditions: Conditions outlining the circumstances under which either party can terminate the contract.
7. Non-compete clauses: Restrictions on the employee’s ability to compete with the employer post-employment.
8. Confidentiality clauses: Stipulations regarding the employee’s obligation to keep confidential information confidential.
9. Dispute resolution: The mechanism for resolving any disputes arising from the contract.

Types of Employment Contracts in the UAE:

There are two main types of employment contracts in the UAE:

1. Fixed-term contracts: These contracts are valid for a specific period, after which they automatically expire unless renewed by mutual agreement.
2. Unlimited-term contracts: These contracts do not have a fixed end date and can continue indefinitely.

Minimum Employment Conditions in the UAE

To ensure fair treatment and protect the rights of employees, employers in the United Arab Emirates (UAE) are mandated by law to adhere to specific minimum employment conditions outlined in Federal Law No. 8 of 1980 Regulating Labor Relations, commonly known as the Labour Law, and other relevant statutes. The following are key minimum employment conditions in the UAE:

Working Hours:

• A maximum of 8 hours per day and 48 hours per week, spread over a maximum of 6 working days.
• Overtime work is permissible but must be compensated at a rate of at least 25% of the basic salary.

Wages and Deductions:

• Payment of wages in UAE Dirham (AED).
• Employers must deduct specified percentages from an employee’s salary for social security, pension, and other contributions in accordance with UAE laws.

Leaves:

• Annual leave:
  After two years of service, employees are entitled to a minimum of thirty calendar days of annual leave, accruing two days per month for the first year.
• Sick leave: With a medical certificate, employees can claim an additional 15 days of paid sick leave per year, with half-pay for half of that duration.
• Pregnancy leave:
  Female employees are entitled to sixty days of paid leave, with fifteen days at half-pay and the remaining forty-five days unpaid. An extra 45 days of unpaid leave is allowed in case of illness during pregnancy or post-birth.
• Leave with compensation:
  Workers are entitled to one day of leave with compensation for each day worked on a public holiday.

End of Service Benefits:

• Employees departing from their positions are entitled to an end-of-service gratuity based on their years of service and salary. The gratuity is equivalent to twenty-one days’ salary for the first five years and thirty days’ salary thereafter.

Other Minimum Conditions:

• Workplace: Employers must provide a safe and healthy workplace for their staff.
• Discrimination: It is illegal to discriminate based on race, gender, religion, national origin, or handicap.
• Non-compete agreements: These agreements are restricted and have a specified duration.
• Confidentiality clauses may be enforced, requiring employees to maintain the privacy of sensitive information.

Paid Leave in the UAE

The United Arab Emirates (UAE) places a strong emphasis on paid leave, promoting equitable treatment for employees and fostering a healthy work-life balance. It is crucial for both employees and employers to comprehend these entitlements to ensure a harmonious working relationship.

Categories of Paid Leave:

1. Annual Leave:
   • Eligibility:All employees are entitled to 30 days of paid annual leave after completing two years of service.
   • Accrual:During the first year, employees accumulate 2 days of paid leave per month.
   • Splitting Leave:Employers have the option to split the leave into two segments, with one part lasting at least 14 consecutive days.
   • Salary: Employees receive their full salary and benefits during annual leave.
2. Sick Leave:
   • Eligibility: Employees are entitled to 15 days of paid sick leave annually.
   • Additional Leave: An extra 15 days of half-paid leave can be granted with a medical certificate from a government health facility.
   • Extended Sick Leave:Employers may request additional medical evidence or a medical board assessment for prolonged sick leave.
   • Salary: Employees receive their full or half salary during sick leave, contingent on the duration and documentation.
3. Maternity Leave:
   • Eligibility: Female employees are entitled to 60 days of maternity leave.
   • Leave Breakdown:
     • 45 days: Fully paid by the employer.
     • 15 days: Half-paid by the employer.
     • Additional Leave: An extra 45 days of unpaid leave can be granted for illness related to pregnancy or childbirth.
     • Salary: Employees receive their full or half salary during paid maternity leave, depending on the period.
4. Compassionate Leave:
   • Eligibility:Employees are entitled to 5 days of paid compassionate leave upon the death of a close family member (spouse, children, parents, siblings).
   • Additional Leave: Unpaid leave may be granted at the employer’s discretion.
5. Study Leave:
   • Eligibility: Paid study leave with full or partial salary depends on the employer’s policy and the agreement between the employee and employer.
   • Approval: Prior approval is often required, with specific conditions that may apply.
6. Hajj Leave:
   • Eligibility: Muslim employees are entitled to paid leave to perform Hajj once in their lifetime.
   • Duration: The duration varies depending on the employee’s situation and the employer’s policy.

Protection Against Discrimination

The United Arab Emirates (UAE) has undergone a notable transformation in its approach to combating discrimination, with a range of legal measures providing robust protection against bias based on specific attributes. Despite persistent challenges, these legal frameworks contribute to creating a more inclusive and equitable environment. Key legislative pillars include Federal Law No. 8 of 1980 Regulating Labour Relations (Labour Law), safeguarding against discrimination rooted in race, color, sex, religion, national/social origin, or disability. Federal Decree-Law No. 33 of 2021 reinforces non-discrimination principles, particularly in flexible work arrangements. The Anti-Discrimination/Anti-Hatred Law criminalizes acts inciting religious hatred, promoting tolerance. The Resolution on Protecting the Rights of People of Determination ensures equal opportunities for individuals with disabilities, including workplace accommodations. These laws guard against bias, covering race, color, sex, religion, national or social origin, and disability. Recourse for discrimination victims includes the Ministry of Human Resources and Emiratisation (MOHRE), the Federal Authority for Human Rights (FAHR), and legal avenues. While challenges persist, the UAE remains committed to eliminating discrimination, focusing on enhancing legislation, raising awareness, and ensuring effective enforcement mechanisms for a more inclusive future.

Data Protection Act

The Federal Decree-Law No. 45 of 2021 on the Protection of Personal Data (PDPL 2021) has established a strong data protection framework in the United Arab Emirates (UAE). This law gives people more control over their personal data by defining rights to access, correct, erase, and limit its use, as well as requiring express consent before processing. To protect customer trust and safeguard personal data, businesses need to adhere to data governance practices and implement suitable security measures. The PDPL 2021 presents challenges like limited awareness and inconsistencies with other countries’ regulations, but ongoing efforts address these issues while fostering international cooperation on data protection. The UAE can maintain its position as a pioneer in data protection, advancing personal privacy and spurring economic growth in the digital age, by adopting the PDPL 2021.

Termination of Employment

In the dynamic and rapidly evolving environment of the United Arab Emirates (UAE), a comprehensive understanding of the legal framework governing employment termination is vital for both employers and employees. This guide aims to offer an in-depth overview of the key facets of termination in the UAE.

Grounds for Termination:

Federal Law No. 8 of 1980 Regulating Labour Relations (the Labour Law) delineates the permissible grounds for terminating an employment contract, classified into two main types:

1. With Notice:Both employers and employees can terminate contracts with notice, adhering to specified notice periods contingent on the employee’s tenure and contract terms.
2. Without Notice:Immediate termination without notice is allowed in specific situations, such as serious misconduct (theft, fraud, violence), incapacity to perform duties (due to illness or lack of qualifications), and unauthorized prolonged absence.

Notice Period and End-of-Service Benefits:

Employee notice periods range from 30 days for less than 5 years of service to 90 days for over 10 years. Employers terminating with notice must pay full salary and benefits during the notice period. Upon termination, employees are entitled to end-of-service gratuity, calculated based on salary and years of service.

Employee Protection:

The Labour Law safeguards employees facing termination, providing the right to a written termination notice specifying the reason and effective date. Employees can challenge unfair terminations through the Ministry of Human Resources and Emiratisation (MOHRE) and are entitled to severance pay if terminated without notice due to reasons beyond their control.

Employer Responsibilities:

Employers must adhere to stipulated notice periods, gratuity calculations, and provide written termination notices. They are obligated to settle all outstanding salaries, benefits, and end-of-service gratuity, obtaining necessary approvals from MOHRE for certain termination types. Understanding these termination intricacies ensures adherence to legal requirements and fair treatment for both parties.

Ensure Compliance in the UAE with EOR Services

Notwithstanding the UAE’s numerous and exciting business expansion potential, managing the nation’s intricate labor rules can be difficult. EOR Service’s Global HR Platform expedites the process, acts as your official employer of record, and ensures that local rules are strictly followed. You can save time and money by eliminating the need for a local organization by automating hiring through our user-friendly platform. With the help of EOR Services, you can confidently grow your staff in the UAE and meet your business goals while being fully compliant. Get in touch with EOR Services right now to see how we can facilitate your transition to UAE compliance.