Decoding the new UAE Labour Law: Key Provisions for Employers & Employees

Dubai has become a global economic powerhouse over the past few decades, attracting individuals from all over the world to work and live in the city. As such, the Dubai government has implemented a comprehensive set of laws to regulate the working conditions of employees in the emirate, known as the Dubai Labour Law. 

Recently, the UAE has approved widespread reforms to the country’s legal system; the most significant within its 50-year history. As a result, the existing federal employment and labour laws have been completely overhauled to bring them in line with internationally recognised business standards.

The new provisions, known as Federal Decree Law No.33 of 2021, replace the previous Federal Law No.8 of 1980 and address a wide variety of business practices.

This new law came into effect from 2 February 2022. However, a grace period of one year is given for employers to draw up new employment contracts and company policy guidelines, therefore these changes are enforceable w.e.f. 01/02/2023. This article aims to highlight the most important provisions of the Dubai Labour Law, which every employee and employer should be aware of.

Key Changes brought by the new regime:

• In the past, the UAE labour law delineated two types of employment arrangements: Limited and Unlimited, with the latter referring to engagements of an indeterminate duration, typically reserved for long-standing employees. However, under the UAE’s latest labour regulations, a new employment contract must specify both the date of commencement and conclusion, as well as the job’s nature, location, and remuneration. While the duration of this new contract is limited to a maximum of three years, it may be extended or renewed for the same or a shorter period if mutually agreed upon by the concerned parties. Pre-existing unlimited employment contracts remain legally binding, but must be revised to conform with the limited contract framework before the looming deadline of 1 February 2023.
• The new UAE labour law mandates a 14-day notice period for employers to terminate contracts during the probationary period. If an employee wishes to change jobs, they must provide at least 30 days written notice and the new employer must reimburse the previous employer for recruitment expenses. If an employee terminates their contract within the probationary period while leaving the country, a 14-day notice is required, and the new employer must compensate the previous employer for visa and hiring costs as per the labour contract. Additionally, if the employee returns to the UAE within three months, the new employer is responsible for the previous employer’s visa and labour expenses. These provisions offer enhanced protections for both employers and employees.
• Employees are entitled to 30 days of leave per year after completing one year of service, or two days per month for service of less than a year. The new law also permits leave to be taken on an accrual basis during the probationary period. The law has also introduced additional forms of leave, such as bereavement leave of 5 days for the loss of a spouse and 3 days for other immediate family members, as well as parental leave of 5 days for either parent within the first six months of a child’s birth. For those who have been employed for over two years, study leave of up to 10 days is available if they are enrolled in an accredited institution within the UAE. Furthermore, new mothers are granted greater rights under the law, with a minimum of 45 days at full pay and an additional 15 days at 50% pay. If further leave is needed, an additional 45 days can be taken without pay. In case of postpartum complications or the birth of a child with a disability or illness, the mother is entitled to an additional 30 days at full pay, extendable for an additional 30 days without pay.
• The new labour law in the UAE prohibits employers from confiscating employees’ identification documents and from making employees leave the country upon the completion of their work period. Gratuity settlements have also been revised, with the new law providing for 21 days of basic salary per working year for employees who have served less than five years and 30 days of basic salary per working year for those who have served more than five years.
• One of the most fundamental provisions of the Dubai Labour Law is the principle of non-discrimination. Under this provision, employers are prohibited from discriminating against employees on the basis of their gender, race, ethnicity, religion, or nationality. This provision ensures that all employees are treated fairly and equally, regardless of their personal characteristics.

Important Provisions of the Existing Law:

• The minimum age for employment remains the same at 15 years, with certain exceptions for children working in family businesses.
• The working week is still capped at 48 hours, with a maximum of 8 hours per day. However, employees may work up to 9 hours per day if the work requires continuous presence, provided they are compensated with overtime pay.
• Annual leave entitlement remains unchanged at 30 days per year for employees who have completed one year of service, with an additional 2 days per month for employees who have not completed one year of service.
• Employers are still required to provide end of service gratuity pay, which is calculated based on an employee’s length of service and final salary.
• Employers are still required to provide health insurance for their employees, covering both work-related and non-work-related illnesses and injuries.
• As with the previous law, employers are required to provide end-of-service gratuity to employees who have worked for at least one year. This gratuity is calculated based on the employee’s last salary and length of service.
• The new law retains the provisions for maximum working hours per day and week, as well as mandatory rest breaks. For instance, employees are entitled to a rest period of at least 30 minutes for every five consecutive hours of work.
• The previous labour law contained strict regulations for the health and safety of employees in the workplace, and the new law retains these provisions. Employers must provide a safe and healthy working environment, and ensure that employees are trained and informed about relevant health and safety procedures.
• The new law retains the provision that employees on sick leave cannot be terminated during that period. This ensures that employees are not unfairly penalized for taking time off due to illness or injury.
•  The previous labour law contained strict provisions for the employment of minors, and the new law maintains these regulations. For example, minors under the age of 15 are not allowed to work, and those between the ages of 15 and 18 are subject to certain restrictions on working hours and conditions.

The Dubai Labour Law is a comprehensive set of regulations that govern the working conditions of employees in Dubai. The provisions of the law are designed to ensure that employees are treated fairly and with dignity, and that they are able to maintain a healthy work-life balance. Employers should be familiar with the provisions of the law in order to ensure that they are complying with their obligations, while employees should be aware of their rights under the law. Overall, the Dubai Labour Law plays a vital role in promoting a healthy and prosperous working environment in the emirate.

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