New Labor Law in the United Arab Emirates (UAE) – A Reconstruction of an Outdated Labor Legislation
The United Arab Emirates passed a new Federal Law Number 33 of 2021 (New Labour Law) in November of 2021 which came into force on February 2, 2022. This law shall repeal Law Number 8 of 1890 (Old Labor Law) in its entirety.
The New Labor Law incorporates most of the amendments made by the Ministry of Human Resources via various regulations over the past few years. The law also establishes a significant amount of new changes in terms of time offs and overtime provisions leading to a revamp in the employment landscape across UAE.
The New Labor Law would apply to all employers across the UAE including each of the seven Emirates and its free zones except the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM). The significant changes introduced via the New Federal Law are as follows:
The New Federal Law paves way for different working models which can be agreed upon between the employer and employee, such as:-
- Full-Time – This working model involves working for one employer on a full-time basis.
- Part-Time – This model involves working for one or more employers for a specific number of hours or days.
- Temporary Work – This kind of working model involves carrying out a specific type of work during a specific time period which ends with the completion of such work.
- Flexible Work – Under the flexible working model, an employee may agree to work for the employer with working arrangements depending on the circumstances and requirements of the work. This involves changing working hours or working days depending on the organizational requirements.
In case the employee wishes to work remotely whether from or outside the State, the employer may approve such request and set the working hours of the employee accordingly. There are no other specific dos and don’ts given under the law to be kept into consideration in case of remote work. However, guidelines on the same are being anticipated from the ministry in the near future.
The new law provides a cap on overtime hours wherein the total working hours for the employees may not exceed 144 hours in any period of 3 weeks. Further, the overtime will be calculated on the basic wage as compared to the previous law, where the overtime calculation was based on the salary including the allowances.
And, in case, the employees are required to perform overtime between 10 pm and 4 am, then the employee shall be entitled to receive a premium of 50% on the regular pay. Previously, the overtime premium of 50% was applicable for the work performed between the time period 9 pm and 4 am.
Under the previous law, the employees in a supervisory or managerial position were exempted from the overtime provision. However, under the new law, the executive regulations will determine the category of employees to be exempted from the provisions relating to working hours.
Employees will now be granted a weekly paid rest for a period of no less than 1 day as per the arrangement in the employment contract or the work regulations/bylaws. The government authority may also increase the period of weekly rest upon passing a resolution. Previously, Friday was considered as the mandatory rest day for employees.
The New law does not provide for extension in the duration of annual leave, however, it provides clarity on the timing of use of annual leave. The law states that the employees shall take their annual leave in the same leave year. This means that the employees will have to make use of their earned annual leave in the year in which it falls due.
Carry forward of leave – Upon the employer’s approval and in accordance with the regulations applicable within the organization, the employee may carry the annual leave balance either in full or in part to the following year. The employer may not prevent the employee from taking the annual leave accrued for more than 2 years unless the employee wishes to carry forward or receive cash payment against such annual leave balance.
The new law also states that an employee will be entitled to payment upon termination of employment for the amount of annual leave unused, and this payment shall be calculated using basic pay only.
With the onset of the new law, the employers will be required to maintain records and registers with respect to employees for a minimum period of 2 years from the date of the end of service of the employee.
The maternity leave duration shall be increased to 60 days of which 45 days will be fully paid and the rest 15 days shall be paid in half. Further, there is a provision for additional maternity leave for a duration of 45 days without pay after the initial maternity leave is ended in case of any post-pregnancy complications or ailment in the newborn child.
Employees will now also be entitled to maternity leave and pay in the case of delivery after 6 months whether the child born is stillborn or dies after being born. The new mothers of children in need of special care shall be entitled to 30 days of paid leave after completing their initial maternity leave period which can also be renewed for another 30 days without pay.
Under previous law, employees were entitled to maternity leave for a duration of 45 days only.
Further, the new law also states that maternity leave pay shall not be available to such female employees who work for another employer during the authorized maternity leave.
Breastfeeding Break – Female employees after returning to work from maternity leave will now be entitled to one or two breaks for the purpose of breastfeeding for a period of no more than 6 months. The total duration of the break shall not exceed 1 hour.
Under the previous law, female employees were entitled to breastfeeding breaks for a period of 18 months from the date of delivery.
Under the new law, an employee who is an affiliate student or a full-time student at an accredited educational institution inside the State may be granted a study leave for 10 working days per year for the purpose of taking the examinations, provided that the employee has completed at least 2 years of service with the employer.
The bereavement leave is an addition to the different types of time off available to the employees. The law provides for 5 days of paid leave for the death of a spouse and 3 days in case of the death of a parent, child, sibling, grandchild, or grandparent calculated from the date of the death.
An Emirati employee shall be entitled to a paid sabbatical leave to perform the National or Reserve Service, according to the laws applicable in the State.
The employee may upon receiving the employer’s consent take unpaid leave. However, such leave would not be taken into consideration for the purpose of calculating the term of service with the employer. Also, the provision of Hajj leave under the previous law is no longer made available.
The new labor law has also introduced the concept of minimum wages. The law states that labor relations will set a minimum wage to be determined and announced by the cabinet following a proposal by the Minister of Human Resources in collaboration with the relevant authorities.
Previously, the UAE labor law did not include a minimum wage and provided that the salaries must cover the basic needs of the employees.