March 7, 2023
The Ministry of Human Resources & Emiratization has announced a revision to the labour laws in the United Arab Emirates with the introduction of Federal Decree-Law No. 33 of 2021, Regulating Labor Relations and its Executive Regulations, under Cabinet Resolution No. 1 of 2022, which went into effect on February 2, 2022.
HR systems in Dubai need to be able to adapt and incorporate any changes that the UAE government makes. Here are a few notable changes that you should be aware of.
Fixed-term Contracts Only
The new law eliminates the idea of unlimited-term contracts and allows only fixed-term contracts (with a maximum duration of three years) to be issued. Businesses must change all current employees, who are on unlimited duration contracts, to fixed term contracts by the 2nd of February 2023.
Notice during the Probation Period
While the new law maintains the six-month limit for probationary periods, it now mandates that any party desiring to terminate employment during probation give at least 14 days’ notice, and where an employee is joining another UAE-based company, at least 30 days’ notice. Additionally, employers have the right to demand payment from the new employer for the costs incurred in hiring the employee.
Part-Time and Flexible Working Arrangements
There are currently several new, unconventional and flexible employment arrangements available in the UAE. These include job-sharing, flexible work (where working hours and days can change depending on an employer’s demands), temporary work (for particular project-based work), and part-time work (with benefits given on a pro-rata basis). MOHRE is yet to provide more specific details regarding the changes to these working arrangements.
Working Days and Hours
Employers must give their workers at least one rest day on any day of the week, Fridays are no longer the only days that must be designated as mandatory rest days. However, there may be potential exceptions from these requirements under the Executive Regulations, which limit the working hours to no more than 56 a week. The maximum working hours remain at eight hours per day/48 hours per week (on a six-day working week) which should be communicated through the company’s policies and HR system.
Discrimination and Equal Pay
The law outlaws discrimination on the basis of race, colour, sex, religion, national origin, socioeconomic origin and any handicap that would hinder an employee from obtaining employment and maintaining such employment. Workers will now benefit from enhanced protection from discrimination in the workplace. Although maternity leave and/or pregnancy are not mentioned as protected characteristics, employers are not allowed to fire (or threaten to fire) a worker because she is expecting a child or is on maternity leave. The new law also stipulates that men and women shall receive equal remuneration for the same work. An effective HR system in Dubai can help companies track employee benefits, ensuring that employees are treated fairly.
Termination of Employment
Despite the term “fixed,” the new Law allows fixed-term contracts to be terminated at any time throughout the term for a “legitimate reason,” so long as the required amount of written notice, as stipulated under the employment contract, is given.
It is now acceptable to terminate an employee with notice, for reasons other than those relating to performance or behaviour. Perhaps the most notable change is that the concept of redundancy is now specifically recognised as legitimate grounds for termination, as is bankruptcy and insolvency, or other economic or extraordinary circumstances.
It is worth noting that the arbitrary dismissal compensation scheme (under the previous law) has been considerably scaled back, with workers only potentially eligible for compensation in two particular termination scenarios.