The Implications of the Latest UAE Labour Laws

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By greytHR
2 minute read ● July 28, 2022
UAE Labour Laws

Change. It's the shortest and sweetest way to sum up the implications of the new UAE laws.

Private-sector employment in the UAE won't be the same again. The latest amendments made to the federal law expect employers to make significant changes to their policies and processes.

The core objective of these sweeping changes is to offer equal opportunities to employees while encouraging employers to enhance their competitiveness in the market.

As guest speakers at greytHR Meets, Sara Khoja (Partner, Clyde and Co's MEA Employment Group) and Yahya Zakir Sait (General Manager, Gulf Infotech) discussed the fundamental aspects of the new law. Featured below is an edited version of the conversation excerpts.

Whom does the new UAE labour law apply to?

The new federal labour law came into force on 2 February 2022. It applies to all the private-sector employees across the seven emirates and free zones (except the DIFC and ADGM).

The new law does not apply to people working in the government public service or armed services. It is also inapplicable to people working on vessels, agricultural workers and domestic workers.

What are some of the recent changes made to the laws?

Contract: All employees, regardless of grade or pay, can only be engaged on fixed-term contracts for up to three years. If employees already have unlimited-term contracts, they need to be converted to fixed-term contracts within a year of the new law.

Leave: As per the implementing regulations, an employee can only carry forward a maximum of half of the leave entitlement.

Gratuity: Every employee who has completed a year of continuous service will be entitled to 100% of the end-of-service gratuity (EOSG).

Are there any new concepts introduced in the new law?

The new law has introduced new types of leave and increased the leave entitlement of employees.

The law also states that employers should not be discriminated on the basis of ethnicity, sex, age and so on. Employers should also prevent harassment in the workplace, and employees should be given the right to raise internal grievances.

The provisions offer greater recognition to different types of work patterns like part-time work, flexible work, temporary work, job sharing and remote working, among others.

What should organisations keep in mind to comply with the new labour laws?

The employers have to amend their employment contracts, policies and handbooks in line with the new law.

They should also provide the necessary training on workplace behavior and etiquette to avert complaints regarding discrimination or harassment.

What happens to the final settlement if an employee breaks the limited contract?

Even if employees break the limited contract, there's no penalty. The only requirement for them is to serve a notice period of 30 to 90 days. Even the employer need not pay a penalty, but the settlement of mandatory payments has to be made in 14 days of the employment termination.

Are there any specific implications for small and medium enterprises?

No. The labour law applies to small businesses in the same manner, and there are no special rules for them. Some ministerial resolutions may have an impact, but the law per se is the same.

How do you think technology can help in implementing this new labour law?

The processes and calculations related to employee records, remuneration, attendance, leave and overtime can be automated by HRMS platforms like GreytHR. It offers the much-needed flexibility, so non-compliance need not be a concern. Greytip Software, in partnership with Gulf Infotech, has been meeting the HR software needs of customers in the region for years.

Want to hear it directly from the experts? Use the link below to view the video. Want to take a critical decision based on the amended law? Check the official communication from the authorities or talk to your experts.

Watch the recording of the entire webinar

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