New UAE labour law: Here's everything we know so far

The groundbreaking law aims to create a flexible work environment that responds to the ever-changing post-Covid-19 labour market and complements the UAE’s recent sweeping reforms to attract and retain talents from all over the world to be part of the country’s next 50-year development journey.

From new work models, innovative gratuity schemes to increased leaves, the law’s provisions balance the different needs of both employees and employers, drive innovation, and harness a diversity of talents in the labour market.

Details of the law’s implementations will be outlined in the Executive Regulations, which were lately approved by the cabinet.

Here’s what we know about the law so far:

1. Employees can opt for part-time work besides their main job

The new Labour Law enables employees to take up part-time jobs, besides their full-time jobs, without having to seek their employer’s permission. All they need is a temporary work permit and ensuring they do not work over 144 hours every three weeks to avoid burnout and ensure wellbeing. Details of the mechanisms of this process are yet to be detailed.

2. There will be innovative gratuity schemes

Companies and entrepreneurs will be able to adopt different gratuity schemes to attract talents and increase their competitiveness in the labour market. Different gratuity schemes will be developed for the work models introduced in the new law that employees can opt for. A savings scheme, for example, will enable employees to invest in their gratuity from the date of joining until end of their service. Details of the schemes are to be announced later in 2022.

3. Employees can work in jobs other than full time

Employees can work on a project or hourly basis under different work models, including flexible, temporary or part-time, while guaranteeing their rights in contractual agreements with employers. More job models, such as condensed workweeks or shared job model, will be introduced in the Executive Regulations, which will outline the conditions and responsibilities of employers and employees, gratuity and leaves for each model. Samples of contracts of each model will also be presented.

4. Employees can shift jobs easily

The new law prohibits employers from withholding employees' official documents and forcing them to leave the country after the end of the work relationship. Instead, employees will be allowed to stay in the country and move to another job. Employers shall also bear all recruitment costs, without deducting anything directly or indirectly from the employee.

5. There will only be limited contracts

Unlimited contracts will no longer be permitted in the UAE’s labour market, and will eventually be replaced, by maximum February 2, 2023, with limited contracts of no more than three years. The contracts are to be renewed several times under the agreement of both parties. This unifies entitlements across all sectors, and removes the reduction of the end-of-service gratuity for employees choosing to terminate an unlimited contract.

6. There will be a minimum wage

In a first-of-its-kind move, the new law will introduce a minimum wage for private sector employees to be detailed in the Executive Regulations. Previously, the UAE labour law had no minimum wage set beyond broadly stating that salaries must cover the basic needs of employees. The minimum wage will protect the rights of low-skilled workers by setting a minimum wage threshold for employers to adhere to.

7. Parents and postgraduate students will have more leaves

Mothers in the private sector will receive longer maternity leave, with 45 days of full pay and the next 15 days with half pay. Fathers are eligible for paternity leave of five days, to be taken intermittently or consecutively within six months of the baby’s birth. Part-time postgraduate students are entitled to a 10-day leave per year, provided that they complete two years of work with the employer. Such leaves shall not be deducted from an employee’s end-of-year gratuity.

8. Women will be equally paid

Employer are bound by a non-discrimination provision in the hiring process on the basis of race, gender, colour, religion, national origin, social origin, or on the basis of disability. All provisions regulating the employment of workers shall apply without discrimination to working women, with an emphasis on granting women the same wage as men when performing the same job, or a job with the same value to be determined by the cabinet.

9. Employees cannot take up competing projects for two years

Under the non-competition clause, employers can require employees not to participate in a competing project in the same sector for a maximum of two years from the contract termination if the work allows them to have access to the employer's clients or professional secrets. The clause must stipulate the time, place and types of work it applies to.

10. Teenagers aged 15 can work part time

The law allows teenagers aged 15 to work in part time jobs, not exceeding six hours daily, after obtaining a written consent from their guardians and a medical fitness report. The Executive Regulations will determine the type of jobs that teenagers are banned from working in, while detailing the responsibilities of employers.

11. Workers are exempted from judicial fees

Employees wanting to file a dispute case in court with a value not exceeding Dh100,000 will be exempt from court fees from initiation to execution. A group of workers can also collectively file a dispute through the Ministry of Human Resources & Emiratisation.

12. Employers must be compensated if employees leave during probation

Employers will be required to give a minimum of 14 days written notice before terminating an employee during probation, which may not be longer than six months. Employees who wish to switch jobs during probation shall submit a one-month notice, while the new employer must pay all the recruitment costs to the previous employer. Employees who wish to leave the country shall submit a 14-day notice, but if they return to the country for a new job within three months from the date of departure, the new employer must compensate the previous employer, unless there is an agreement between the worker and the employer stating otherwise.