Updates to the UAE's labour law

hr labourlaw people Feb 20, 2022

By Sarah Brooks, Fikrah HR

Email: [email protected]

We are officially two weeks down the line since the implementation of the new UAE Labour Law and to be honest its still very new and scratchy, which is understandable really. 

The Executive Regulations document published in the past week which has answered some but not all questions that we have around the law and it's clear that there will be more ministerial decisions to follow over the coming weeks and months. We also need to be aware and keep eyes and ears open for any court decisions around the application of the new laws as this will also help our understanding and implementation. 

Some key points of note from the Executive Regulations:

  • Remote working and job sharing working patterns have been clearly defined
  • New work permit types and applications have been defined including permits for  self-employed, student, task based, temporary, part-time and golden visa holders 
  • Clarity and definitions over the Non-Compete Article
  • Further explanation over the hours of work including the decision that the Reduction of working hours during Ramadan is retained
  • Categories of exemption for Overtime Payments – the broad auto extension for industries as in previous law has not been retained
  • Annual leave provision and calculation for part-time workers
  • The provision of study leave is only for exams at universities in the UAE
  • Disciplinary rules and process has been clearly defined
  • Requirement to report employee unauthorised absence if it is in excess of seven days to MOHRE
  • The methodology for calculating EOSB for non-full-time workers
  • The incorporation of “Emergency Measures” from the resolution 279 of 2020 as created during the early days of the Pandemic. 

Aside from reading all of the above, and getting geeky about it, I have also been following up with the Ministry of Human Resources & Emiratisation over a few queries I had. I spoke to their legal team last week and got some great information which I thought you might find useful.

First and foremost regarding employees on existing Limited Contracts. Their terms and conditions and supporting legislation automatically switches to the new law. It's advisable to document this change to them and amend any clauses as needed in an addendum and get them to sign to it so they are in acceptance and aware. 

The requirement for 45 days penalty from any employee resigning on a limited contract prior to its expiry is now null and void and not applicable. There is no penalty applied now. Additionally, in the same circumstances they are due their full gratuity in all instances, it is not forfeited on disciplinary termination or on resignation prior to their contract ending.

If an employee is on an unlimited contract and they are terminated, the new laws are 100% applicable. In all but one instance the new labour laws are 100% applicable to such employees. Article 65 gives instruction over how to give and what length of notice is needed to terminate the contract (not the employment) for these individuals and then transfer them to the new Limited Term Contract.

The only exception to the application of the new labour law is for employees on unlimited contracts is relating to their resignation. In the instance they resign their gratuity payment is calculated according to the OLD laws with the number of days flexed according to their length of service (7/14/21). This is the only exception. If they are terminated their gratuity is as per the new law and length of service. 

I have also confirmed with them the method of calculating the gratuity, I had heard there was some confusion so I thought I would check it out with those in know. They confirmed to me that the calculation for full-time employees is the basic monthly salary /30 days and then multiplied by either 21 or 30 days. 

From my observations and discussions with some fellow HR, it's clear that the rulings around discrimination are being overlooked by many companies. I’m seeing daily postings on LinkedIn of job vacancies specifying gender, age or nationality. The same goes for the clause regarding the prohibition of harassment and bullying, being verbal, physical and psychological, as we know this is still happening in companies until now. These clauses should be of concern. There’s no information yet from the Ministry of Human Resources & Emiratisation as to how these clauses will be enforced, what will happen if an employee or candidate claims under them? Will there be an investigation? An inspection? A court case? And what will the penalty be, how will it be appropriated and what will the cost of it be? I strongly recommend companies to start reviewing their policies, procedures, internal documentation, and training their teams to ensure that they are ahead of the game and protect themselves against the possibilities. 

About the author - Sarah Brooks

Sarah is the founder of Fikrah HR, a UAE-based HR consultancy. 

With over 20 years of experience in operational Human Resources, Sarah was named one of the top 101 global HR minds in the hotel industry at the World HR Congress in 2019 and 2020.

Sarah has advised a number of local and international organisations, such as Maximus Gulf, Landmark Hospitality, First Group, Accor Group, Wyndham Hotel Group. 

Sarah specialises in overseeing the full employee life-cycle, including recruitment, defining job descriptions, onboarding, policies and procedures, performance management and employee engagement. 

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