On November 15, the government of the country recently updated the labor and employment law of the UAE. That is to say, the new UAE labor law is coming into force in 2022. On the other hand, the UAE is moving towards a new HR approach where worker productivity and happiness are crucial to create attractive workplace destinations.
In this article, we will make sure you understand why the new UAE labor law is aligning both public and private sectors. In the same vein, you will learn the key amendments of the new update; making key changes in the minimum wage, the abolition of unlimited contracts, working hours, and overtime. Let’s observe:
- What will the New UAE Labor Law do?
- How can Connect Resources assist you with the new UAE labor law?
The 33rd Federal Law of 2021 about the regulations of labor relationships (the “New Labor Law”) will take absolute effect on February 2, 2022. In the same vein, it is a revolutionary alteration of its kind since this law was created in 1980.
On the other hand, this new UAE labor law is focused on improving regulations for different work areas. For instance, part-time and temporary work, introduce more flexibility into the workspace and provide better protection for workers.
Similarly, the Ministry of Human Resources and Emiratization of the UAE (MOHRE) establishes the new UAE Labor Law is created to respond to the quickly changing work environment among the tech advancements consequence of the Covid-19 pandemic. In the same vein, the MOHRE is working on executive rules that will supervise the implementation of this new law.
On the other hand, the new UAE labor law implements several changes. In addition, the reasoning for these new regulations is not always clear and it is complex to foresee how these provisions will result in practice. However, it is expected that these new regulations clarify the existing areas of uncertainty.
In other words, there are several important issues for affected companies to have in mind. Further, there are changes in the employment policies, practices, and contracts.
We have resumed all important aspects of the new UAE labor law.
2. What will the New UAE Labor Law do?
From 2022, employees will be able to work for multiple employers. Employees who are working on private sector can work part time alongwith flexible contracts.
The important amendments of the new law include the implementation of:
This fixed-term/limited contract, which cannot exceed 3 years; is renewable for the same or less period upon agreement of all involved parties. Likewise, unlimited contracts in accordance with the existing labor law (Federal Law No. 8 of 1980) still apply; however, you must convert it from unlimited to limited contracts in addition to 1 year of enforcement of the new law.
Thus, all businesses must update all drafted employment contracts in the private sectors and enter into February 1st of 2023.
Entering into a non-compete agreement with its employees if it plans to protect the company interest is mandatory for the employer; in accordance with the new UAE Labor Law. However, article 127 of the current labor law establishes that a business does not need to enter into a non-compete agreement to protect the organization.
In addition, the current labor law keeps the workforce from working for a prospective company carrying out a business; competing with their former/current employer’s company.
Different work categories
Basically, this includes part-time, flexible work, temporary, and full-time among other categories. Certainly, the current labor law states that an employee must work through 8 hours daily, 48 hours weekly; the new law grants the opportunity to the worker (if the signed contract allows it) to work 40 hours weekly on a condensed working hours plan.
Similarly, exemptions of more or less AED 100,000 are applicable to employees including all steps of litigation and requests and execution submitted by them.
Protection against bullying and sexual harassment
The company is forbidden to use any means of force against its workers or use a penalty thread with intentions to use a service against their will. Similarly, the new UAE labor law forbids bullying, sexual harassment, or any physical, psychological, or verbal violence against employees by their colleagues or superiors, and any type of discrimination on the basis of religion, sex, color, disability, or nationality with special focus to empower women in the workplace.
Equal pay for everyone in the workplace.
It implements a special emphasis on granting all women the same wages and salaries as men when they perform the same duties or tasks of equal value.
Protection of employee’s documents and right to remain
Businesses are forbidden from confiscating workers’ official documents. On the other hand, employers cannot force workers to leave the country following the end of their work term.
Certainly, all companies and organizations must bear the expenses and fees of recruitment and shall not take it directly or indirectly from the worker.
Working hours and overtime.
It is absolutely forbidden for the employees to work 5 consecutive hours without at least 1-hour break. Similarly, more than 2 hours of overtime for employees per day are prohibited. Further, if the nature of the job requires more than 2 overtime hours, workers must receive an overtime salary according to a standard hour pay with a 25% increase.
On the other hand, if the situations require the employees to work overtime hours between 10 pm and 4 am, they have the right to an overtime salary equal to a standard pay with a 50% increase. Similarly, employees working on shifts are exempt from this regulation.
Most importantly, if the employees are asked to work on a day off; they shall receive a 1-day leave or an overtime salary equal to a standard day payment with a 50% increase.
Certainly, all workers are entitled to at least 1 paid day off weekly with the opportunity of increasing rest days at the discretion of the company.
Workers can extend maternity leaves in the private sector to 60 days (whereas, 45 fully paid leave days and 15 half-paid leave). Moreover, workers can also choose a traditional 45 days of unpaid leave; according and following the 60-day period in case of any complications after giving birth.
The new UAE labor law states that this ranges from 3 to 5 days depending on the degree of relatedness of the deceased.
All workers have the right to a yearly 10-day study leave if they are studying in an accredited institution within the country and have successfully completed at least 2 years with their company.
Payment of incurred holiday days
Businesses must calculate this payment on the basic wage only.
Payment of final settlements
Business must pay the company within 14 days of the termination of the worker’s employment.
They are now restricted to 3 months (including senior executives who usually have 6 or 12 months of the notice period) while the minimum period notice is still at 30 days.
Worker’s right to search for other employment
All workers have the right to 1 day off weekly to search for new employment opportunities during the notice period where the business issues such notice.
Resignation without notice
Workers are able to resign without giving notice if:
- The company breaches its obligation as an employer and fails to remedy this breach in a 14-days period; the worker must notify the MOHRE of this incident.
- In case of violence or harassment, the worker notifies the MOHRE in 5 working days.
Termination by an employee during the probationary period
All workers are allowed to terminate their employment contract during the probation period if they provide at least 1 month of written notice to the company; if the worker wants to relocate to another company based in the UAE. In this situation, the new UAE labor law implies that the new organization must compensate the previous company for any onboarding and recruitment costs of this employee.
Similarly, if the employees decide they want to leave the country during the probation period; they can terminate their employment contract if they provide at least 14 days of written notice. However, in any situation that the worker returns to the country and acquires a work permit issued by the MOHRE in 3 months of their departure; the new company must compensate all expenses to the previous company for all recruitment costs incurred in onboarding this worker.
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Termination by the company during the probationary period
All companies can terminate a worker’s employment contract during the probation period if they provide at least 14 days of written notice to the worker.
Fines and penalties
Companies can face fines of AED 1,000,000 for non-compliance with the new UAE labor law. Most importantly, the MOHRE can multiply these fines in case there is more than 1 worker affected by this breach.
3. How can Connect Resources assist you with the new UAE labor law?
We understand that you need the best assistance when it comes to complying with the new labor laws of the country. In addition, they will take effect on February 2nd of 2022. In the same vein, we are one of the top leading workforce outsourcing businesses in Dubai and all across the UAE.
On the other hand, we have more than 2 decades of experience working with all-sized business and their HR departments. Therefore, working with us you will have complete assistance with the requirements of your company.
In Connect Resources we can assist you in the different areas of recruitment, staffing, and outsourcing. Similarly, we have assisted many companies in various industries to source and find the best highly skilled individuals so you can take your organization to the next level.
We deliver highly specialized workers to businesses located in the UAE and we have assisted them with; Emiratization process, government services, and work visas that will allow you to bring foreign workers to the UAE.
Whether you are looking for permanent recruitment, temporary staffing, or on-demand staffing; thus, you can trust us to find the right innovations, without needing to spend a huge amount of money and effort; because we take care of the process for you. Working with us you can focus on your organization’s many activities with the assistance of our specialized staff; in areas such as payroll, IT services, and the HR department.
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Would you like Connect Resources to start assisting you with the new UAE labor law?
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