The UAE has introduced a new labor law is in line with the country’s Vision 2030 to improve the economy and attract a fresh pool of talent.
On February 2, 2022, Federal Decree Law No. 33 of 2021 took effect, repealing and replacing Federal Law No. 8 of 1980, as amended, in its entirety.
The new law has a new set of labor guidelines governing private-sector employment relations.
The changes in the new labor law are fairly substantial and necessitate amendments to existing employment contracts, as well as modifications to policies and procedures concerning future agreements with new employees.
In implementing the new law, the Ministry of Human Resources and Emiratization (MOHRE) initiated new controls and procedures to allow employers to benefit from the capacities and productivity of their employees and reduce operational costs in line with new labor categories.
Abdulrahman Al Awar, Minister of Human Resources and Emiratization, said the new law would enhance the stature of the Emirati labor market as one of the world’s leading markets.
It is apparently characterized by flexibility, efficiency, ease of conducting business and attracting talents, and available expertise and skills, in light of its protection for both labor-relation parties.
Speaking to TRENDS, legal experts and businessmen termed the new labor law a game-changer.
They said that the law would offer employers and employees various options for their contractual relations.
Deepak J Babani, Managing Director of Satguru Holdings Limited, said, “The last labor law was set in 1980, which is 40 years ago. In the interim period, the world has moved a lot. So, it was high time that UAE also adjusted the labor laws to attract a fresh pool of talent.”
He added: “The UAE government has taken a lot of initiatives to improve the economy in view of the Vision 2030, so it was the right step to take to make changes to the labor law to match the aspirations of the vision.”
Imran Khan, a legal consultant at the UAE-based Bin Eid Advocates, said, “This new law is bringing many essential labor reforms in the sector, like giving equal rights without any kind of discriminations, many types of leaves, no more sudden termination power of the employer, providing various kinds of work permits and part-time work facility, and liability on the company for repatriation if an employee died.”
He added: “This law talks about minimum wage.”
It is more favorable for employees, but actually beneficial and in the interest of both employee and employer, said Khan.
Part-time jobs
The new law sets out various work models that parties may agree to, including a full-time job for one employer.
There is also a part-time job for one or more employers for a specific number of hours or days.
Then there is temporary work carried out during a particular time period that involves a specific task and ends with its completion.
Finally, there is flexible work that involves changing working hours or days depending on workload and the operational and business needs of the employer.
Khan said, “A part-time work permit can be issued for an employee under Cabinet Resolution No: (1) of 2022 article 6 (c).
This work permit apparently allows for the facilities registered with MOHRE.
However, the employee’s working hours should be less than that of a full-time worker.
Also, the employee can work for more than one employer after obtaining a permit from the ministry.
Babani said there are a lot of SMEs that do not require full-time employment of certain staff during the initial startup period. Part-time employment can take care of this problem.
He said, “With the establishment of a lot of educational institutions in the UAE that churn out a lot of students who need to use their time effectively to get practical experience and support their education expenses. Such part-time employment will help both employers and employees.”
There are a lot of residents who want to improve their standard of living. Such part-time employment can help them earn some more, either for extra savings or to improve the standard of living, explained Babani.
Employees can shift jobs easily
Under the new labor law, either party may terminate the employment contract for a legitimate reason by giving the other a prior written notice, provided that such notice is not less than 30 days and not more than 90 days.
The new law also provides that parties to an unlimited-term employment contract that was entered into before the new law came into effect may terminate such contract for a legitimate reason by giving the other any of three options.
The first is 30 days’ written notice if the period of services is less than five years.
The second is 60 days’ written notice if the period of service exceeds five years.
The final one is 90 days’ written notice if the period of service exceeds 10 years.
Khan said, “An employee now can change the job, but particular conditions need to be fulfilled, and both parties before the termination of the employment contract need to issue notice for a certain time period, and the employee needs to work in the notice period.”
Babani said that this was a necessary step — where both employers and employees get their fair share — in order to build a creative workforce in line with international markets,.
Limited contracts
Khan said, “Under the new law, labor contracts will be limited or fixed-term contracts.”
However, this law gives a year’s extension to change for previously signed unlimited contracts.
Babani said this would give both the employer and employees a fair chance to reassess their prospects and growth opportunities with each other.
No minimum wage
Article 27 of the new labor law says about minimum wage: “The cabinet may, based on a proposal by the minister and in coordination with the concerned entities, issue a decision determining the minimum wage for workers, or any category thereof.”
Babani explained: “This is more or less being regulated by the countries where such workers are brought to the UAE.”
He added: “One cannot expect people to work on lower wages than the market. So, I feel with all other restrictions removed, this problem will take care of itself.”
Equal pay for women
Law No 33 of 2021 Article 4 (4) provides that female workers be granted remuneration equal to male workers’ remuneration if they perform the same work or another Work of equal value, explained Khan.
The same article prohibits discrimination on the basis of race, color, sex, religion, national origin, social origin, or disability, he added.
Differently-abled individuals are known termed people of determination in the UAE, and the country has over the past couple of years introduced several initiatives to help them achieve a quality of life comparable to everyone else in the emirates.
Meanwhile, Babani said the move to ensure equal pay for women was a welcome one, and in line with international practice.