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New UAE labour law: Minimum wage, flexible hours among top 10 highlights

November 21, 2021
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The employment reforms will go into effect in February 2022

The new labour law, recently announced by the UAE, has presented the largest set of employment reforms that empower employees in the private sector.

Legal experts said that the Federal Decree Law No. 33 of 2021 on regulating labour relations, effective from February 2, 2022, brings the UAE’s workplace in line with the best international practices in terms of safeguarding employee rights and attracting talents to a flexible and modern work environment.

Here are the top 10 highlights of new labour law:

1. Paternity, maternity, academic leaves

Under the new law, working fathers are to receive a five-day paternity leave to be taken up to six months following the child’s birth concurrently or intermittently.

Mothers have a fully paid 45-day maternity leave, which, under the new law, extends to additional 15 days at half pay. If new mothers are not ready to go back to work once the maternity leave is over, they are entitled to additional unpaid 45 days to care for themselves or their new child in case of illness. However, a medical certificate must be presented as a supporting document.

If a baby is born with disability, the mother can have a further 30-day fully paid leave on top of the basic maternity leave, which can be extended to another 30 days with no pay.

Employees have a five-day mourning leave upon the death of a spouse, and three days upon the death of a parent, child, sibling, grandchild or grandparent.

After completing two years with an employer, workers are entitled to a 10-day study leave if they are enrolled in an accredited institution inside the UAE.

Employees are also entitled one day paid off with the possibility of increasing weekly rest days at the discretion of the company.

2. New work models

Employees can now work on a project or hourly basis for more than one employer under the new models introduced to adapt to a post-Covid-19 world.

The law introduces part-time, temporary or flexible contracts, besides the regular full-time scheme.

Part-time work allows employees to work for one or more employers for a specified number of hours or days scheduled for work, while temporary work can be a contract for a specific period or on a project basis that ends with the job’s completion.

Flexible work gives employees the freedom to work at different times depending on the conditions and requirements of the job, in addition to the full-time work currently prevalent in the labour market. The contract under the new law covers hours, days and duties required.

Further models of work will be introduced including self-employment; condensed working weeks, which enables employees to fulfil their working hours in a specific number of days instead of one week; and the shared-job model, which enables two employees to split the job and pay based on an agreement with the employer.

3. Probation rules

The probation period is still limited to six months, but under the new law, employers need to submit a written 14-day notice before terminating the employee. Previously, termination during probation was effective on an immediate basis.

Employees wishing to change jobs during probation must submit a one-month notice. If they want to leave the country during probation, they must submit a 14-day notice. Leaving the country without notice during probation will render employees a one-year ban from obtaining a work permit.

If any of the parties violated these rules, the breaching party is required to financially compensate the other with a pay equivalent to regular work days of the remaining notice period.

4. Removal of unlimited contracts

Starting next year, employers will be allowed to issue only limited (fixed-term) contracts, renewable every three years, for the same or lesser period, upon the agreement of both parties.

The removal of unlimited contracts helps unify end-of-service benefits and other entitlements across the country.

Employers will be granted a one-year grace period, starting from the law’s implementation on February 2022, to amend and correct employment contracts to fixed term.

5. Minimum wage

In an unprecedented move, the new law will set a minimum wage for employees in the private sector. The UAE Cabinet will determine the minimum wage following a proposal by the Minister of Human Resources and Emiratisation in coordination with relevant authorities.

Previously, the UAE labour law had no minimum wage set beyond broadly mentioning that salaries must cover the basic needs of employees.

6. Coverage of repatriation costs

In the event of a worker’s death, the employer bears repatriation costs upon the family’s request. The employer shall also pay the worker’s wages, entitlements and severance expenses to the family within 10 days of the worker’s death.

7. Right to remain in country after quitting

The employer is prohibited from forcing employees to leave the country after the end of the work relationship or termination of a contract. Under the new law, workers are allowed to move to a new employer and stay to benefit in the labour market.

Under the new law, employers cannot confiscate the official documents of employees.

8. Anti-discrimination and harassment provisions

Under the new law, the employer is now bound by a policy of non-discrimination in hiring employees on the basis of gender, race, colour, nationality, religion, social origins or disability.

The law also protects employees against sexual harassment, bullying, verbal, physical or emotional abuse by employers, superiors and colleagues.

Employers shall not use any means of force against employees or threaten to penalize employees for failing to perform an action against their will.

9. Women empowerment

The law expressively states an equal pay for women doing the same job, or other work of equal value, as men. The value of work to be determined later by the cabinet.

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It is emphasised in the law that all provisions regulating the employment of workers shall apply without discrimination to working women.

10. Judicial fees exemption

The new law exempts workers from judicial fees at all stages of litigation, enforcement and petitions filed by workers or their heirs with a value not exceeding Dh100,000.

It also provides that the employer shall bear the fees and expenses of recruitment and employment and shall not recover them directly or indirectly from the employee.

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