A version of this article was first published in November 2021
The new UAE labour law regulating the private sector provides greater protection for employees and introduces more flexibility into the workplace.
Described as one of the largest updates to the laws regulating labour relations, it will come into force on February 2, 2022.
Many of the new regulations make it easier for people to change jobs, while providing protection for employers in the private sector, who might have spent thousands of dirhams on recruiting staff from abroad.
The new rules will bring more certainty and stability to the labour market
Luke Tapp,
Pinsent Masons LLP
Under the legislation, employers may not force workers to leave the country after the end of the work relationship or the termination of a work contract. Instead workers will be allowed to move to another employer.
The new rules also mean employment contracts of indefinite duration will no longer be permitted.
Instead, fixed-term contracts of no more than three years will be introduced. These can be renewed several times with the agreement of the two parties.
Dubai lawyer Ludmila Yamalova said this unifies and simplifies the UAE labour market.
"Before we had limited and unlimited contracts and the calculation of end-of-service benefits and other entitlements differed.
"This complexity has now been removed and made all the entitlements the same, irrespective of what type of contract you hold, and whether you were terminated or resigned."
There are, however, strict new rules regarding probation for the employee and employer, when a worker starts a new job.
Luke Tapp, head of the Middle East employment practice for Pinsent Masons LLP said the new legislation "brings local labour laws in line with international best practice".
Probation periods
The new law states that probation periods may not be longer than six months, and employers are required to give a minimum of 14 days notice in writing if they wish someone to leave their employment before the date specified for ending their service.
Ms Yamalova said this was a notable change.
"Previously the employer could terminate during probation at any time with no notice, for any reason. Now the article is a lot beefier – it no longer allows for immediate termination," she said.
The law has also changed for employees choosing to leave during their probation period.
The length of notice period now depends on the reason why the employee is leaving, and what they plan to do next.
If the staff member wants to switch jobs to work for a new employer in the UAE then they must give one month's written notice. The new employer is also required to compensate the previous employer for all the recruitment costs or fees spent contracting the employee.
If the staff member is leaving the UAE, then only 14 days' written notice is required.
However, if that person returns to the Emirates and obtains a new work permit within three months from the date of departure, and goes to work for another employer, the new employer must compensate the previous employer, unless there is an agreement between the worker and the employer stating otherwise.
Compensation equal to the employee's wage must be made if either the employer or employee fails to adhere to these regulations.
If an expatriate employee leaves the country without abiding by the regulations, he will not be given a work permit to work in the country for one year from the date of leaving the country.
Ms Yamalova said: "These regulations regarding probation are interesting, and all new. They are clearly designed to deter employees using certain employers as a bridge into the UAE from abroad. That is understandable given the recruitment cost to employers."
Mr Tapp, said the private sector has been requesting these changes "for years".
"The new rules will bring more certainty and stability to the labour market in relation to probationary periods.
"In some ways, there will be less flexibility, because neither party can now terminate without any notice during the probationary period. However, the increased financial and employment protection that this provides to both parties will have a beneficial impact on the private sector workforce.
"The medium to long-term practical impact of legislative developments such as this one will ultimately help to further attract and retain leading companies and world class talent into the UAE."
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