As we step into the new year, let's take a look at the UAE’s first major overhaul of labour law for more than 40 years. It was stated in November of last year that a new UAE labor legislation would go into effect in 2022. These are the ten major changes that will be enacted as a result of the New Law.
1. NEW MODELS OF WORK
The New Law introduces new models of part-time work, temporary work, and flexible work in order to improve the labor market's flexibility and productivity.
2. ABOLITION OF UNLIMITED CONTRACTS
According to Article 8 of the New Law, unlimited contracts are to be replaced with work contracts with a defined term of three years that can be renewed on the same terms with the approval of both parties for a similar length or less.
3. DEADLINE OF 1 FEBRUARY 2023 FOR THE DRAFTING OF NEW EMPLOYMENT CONTRACTS
All private-sector employers will be forced to update their current employment contracts with contracts that conform with the New Law. Employers have a maximum of one Gregorian year from the date of the New Law's adoption, i.e. 1 February 2023, to do so.
4. MINIMUM WAGE
Article 27 of the New Law will establish a minimum salary, a first for the UAE. The minimum salary amount will be established and declared by the UAE Cabinet in response to a recommendation by the Minister of Human Resources and Emiratisation, in conjunction with the necessary authorities.
5. EQUAL PAY FOR EQUAL WORK
In addition to articles prohibiting discrimination based on race, gender, religion, and so on, the New Law expressly states that all provisions governing the employment of workers without discrimination shall apply to working women, with a focus on granting women the same wage as men if they perform the same or other work of equal value.
6. NEW CATEGORIES OF LEAVE GRANTED TO EMPLOYEES
Employees will be able to request additional types of leave under the New Law, including
7. 'CONDENSED" WORKING WEEK
The New Law also allows for a shortened work week via a condensed working hours paradigm. According to Article 65 of the present law, regular working hours in the private sector are 8 hours per day or 48 hours per week. The New Law allows companies to allow their employees to work 40 hours per week on a condensed model, i.e. a four-day week with ten hours each day. This modification was most likely made with the new four-and-a-half-day work week for public-sector employees in mind.
8. NON-COMPETITION CLAUSE
The New Law tightens an employer's non-compete protections by requiring the execution of a Non-Compete Agreement between the employer and employee. This Agreement must specify the duration, geographical area, and types of work to which it applies.
9. 14-DAY NOTICE OF TERMINATION REQUIRED DURING A PROBATION PERIOD
While a company may terminate an employee at any moment during their probationary period, the New Law compels employees to provide their employer 14 days' notice if they choose to do the same.
10. JUDICIAL FEES EXEMPTION
Employees or their heirs may file petitions, pursue litigation, or obtain enforcement orders against employers under the New Law without incurring judicial fees at any step of the procedure, as long as their claim does not exceed Dh100,000 in value. The New Law further states that the employer must shoulder the fees and expenditures of recruitment and employment and may not recoup them from the employee, either directly or indirectly.
11. WORKING WEEK CHANGE
UAE Federal Government announced a shift in the working week for public sector employees from Sunday/Thursday to Monday/Friday, starting from Jan 2022. The private sector is not required to follow suit. However, given that schools will also operate from Monday to Friday, as well as the courts and ministries, many businesses will want to consider a move in the working week as well. Many major UAE businesses have already announced a change in their work week in accordance with the changes made by the UAE Federal Govt.