It is important to know the changes brought about by the recent federal labor law issued in UAE ( 33/2021). The law, along with its implementing regulations are applicable to employees and employers within the UAE’s private sector; save for the free zone companies in Dubai International Financial Centre and Abu Dhabi Global Market.
The major changes in the employment law regime in UAE are:
- Unlimited employment agreement are forbidden. Limited term employment agreement cannot exceed 3 years, however they can be renewed.
- Termination of the employment agreement during the probation period is subject to a notice period and potential indemnifications.
- Modifications were included to the annual, maternity and parental leaves. The law introduced the bereavement, study and job hunting leaves.
- Employment agreement can be terminated prior to its term for legitimate reason, subject to serving a notice 30 to 90 days in advance.
- Employees summarily dismissed and resigning employees working on full time basis retain their right to end of service indemnity.
The new Law requires to take the necessary steps to ensure compliance with the additional and amended provisions of the labor law such as (1) transfer all unlimited agreement into limited by February 1st 2023 at the latest and (2) modify the internal regulations, policies and procedures to reflect the provisions of the new law and its implementing regulations.
Non- Compliance and Penalties
UAE courts are entitled to levy fines against employers for breaching the Labor Law, the penalties range between AED/5000/ to AED/1 000 000/. For instances of repeated breach, fines can be doubled and imprisonment can be imposed.
For further information, please get in touch by sending your query to [email protected]
Disclaimer: This publication is for informational purposes only and does not provide any legal advice.