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Navigating Employment Law in the UAE – A Comprehensive Guide for Employers with Al Kabban & Associates

Home / Employment Law / Navigating Employment Law in the UAE – A Comprehensive Guide for Employers with Al Kabban & Associates
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For businesses operating in the UAE, understanding the country’s employment legislation is crucial in fostering strong employee relationships, adhering to legal obligations, and maintaining a compliant workforce. Navigating UAE employment law can be a complex task, given its comprehensive legal framework and continuous developments in regulations and practices. In this comprehensive guide, Al Kabban & Associates shed light on the key aspects of employment law, offering valuable insights and guidance for employers seeking to adopt and implement best practices in the workplace.

Through this guide, we will delve into the essentials of UAE Labour Law, discussing matters such as forming employment contracts, working hours, leave policies, wage regulations, and termination procedures, among others. Furthermore, we will explore recent developments in employment law that may impact your business and explore how Al Kabban & Associates can support employers in navigating these challenges and ensuring compliance with local legislation.

In the dynamic landscape of UAE employment law, businesses must stay well-informed and proactive in ensuring adherence to both federal and local regulations. With Al Kabban & Associates’ expertise at your disposal, you can be assured of expert guidance on compliance, dispute resolution, and HR strategy underpinned by a comprehensive understanding of the UAE employment law landscape.

Equip your business with the knowledge and tools necessary to navigate UAE employment law successfully and rely on Al Kabban & Associates to assist you in maintaining harmonious employee relationships and compliance with the legal framework governing the UAE workforce.

Key Aspects of UAE Employment Law

1. Employment Contracts: In the UAE, you can only have fixed term contracts as per Federal Law no. 33 of 2021, also known as the new UAE Labour law. Limited contracts have a specific duration, typically not exceeding two years, however there are no restrictions or limitations on the maximum number of years. Unlimited term contracts are no longer permitted as per the new UAE Labour Law. Employers must also consider the mandatory clauses, such as job title, salary, benefits, and probation period, when drafting a legally sound employment contract.

2. Working Hours and Overtime: UAE Labour Law stipulates standard working hours, which should not exceed eight hours per day or 48 hours per week. Additionally, during the holy month of Ramadan, working hours for Muslim employees should be reduced by two hours per day. Employers must compensate employees for overtime work at a rate of basic pay plus 25% or 50% for night shifts or irregular hours. It is essential for employers to maintain accurate records of working hours and overtime to ensure compliance.

3. Leaves and Holidays: Employers should be familiar with the UAE’s statutory leave provisions. These include annual leave, which requires employers to provide a minimum of 30 days of paid leave for every year of service for employees who have completed one year of service. Other mandatory leaves include sick leave (up to 90 days per year, subject to conditions of service duration) and maternity leave for female employees (45 days of fully paid leave and 15 days of half paid leave for employees who have completed one year of service). Employers must also observe the UAE’s official public holidays, which include both Islamic and national holidays.

4. Wages and Gratuity: The UAE Labour Law provides specific provisions relating to minimum wage, payment frequency (not exceeding one month), and methods of payment. Employers should ensure they are complying with these requirements when setting salaries and processing payrolls. In addition, the UAE Labour Law mandates the payment of end-of-service benefits or “gratuity” to employees who have completed at least one year of continuous service. Gratuity calculations differ depending on the type of contract, length of service, and, in some cases, the employee’s salary and cause of termination.

Recent Developments and Their Impact on Employers

1. Changes to the UAE Labour Law: In 2021, the UAE issued a new federal decree (Decree Law No. 33 of 2021), amending several provisions of its Labour Law. Some notable changes include the introduction of paternity leave (five days of paid leave), new anti-discrimination provisions, and increased protection for domestic workers. Employers must familiarize themselves with these changes and update their HR policies accordingly to ensure compliance and protect their employees’ rights.

2. Wage Protection System (WPS): The UAE introduced the WPS to ensure employees receive their salaries on time. Employers must register with the system, which monitors and tracks salary payments through approved banks and financial institutions. Failure to comply with the WPS requirements may result in penalties or business restrictions.

3. Remote Work Regulations: In light of the COVID-19 pandemic and the rise in remote work arrangements, the UAE Ministry of Human Resources and Emiratisation (MOHRE) issued temporary guidelines addressing remote work policies. While these guidelines are not part of the UAE Labour Law, employers should consider incorporating remote work policies, focusing on aspects such as working hours, employee responsibilities, and the provision of necessary equipment and tools.

Best Practices for Employers

1. Implement Clear HR Policies: Employers should establish and maintain comprehensive HR policies, ensuring they cover key aspects of UAE Labour Law, such as contracts, working hours, leave policies, wages, and other employee rights. Policies should be regularly reviewed and updated to ensure compliance with changing laws and regulations.

2. Engage in Open Communication: Establishing a healthy employer-employee relationship is vital to a successful business. Employers should foster open communication with their employees, addressing concerns, providing regular feedback, and encouraging employee involvement in the decision-making process.

3. Conduct Regular Compliance Audits: Periodic internal audits can help employers identify and address potential areas of non-compliance and risk. Engaging with experienced legal professionals such as Al Kabban & Associates to carry out these audits can provide valuable insights into areas requiring improvement.

4. Seek Expert Legal Guidance: Partnering with a reputable law firm like Al Kabban & Associates can ensure that businesses stay up-to-date with changes in the legal landscape and maintain compliance with the UAE Labour Law.

Conclusion

As an employer operating in the UAE, it is essential to stay informed about the country’s employment law framework and to implement best practices to ensure compliance. Engaging with a seasoned legal partner, such as Al Kabban & Associates, can provide invaluable guidance and support as you navigate the complexities of UAE Labour Law, protecting both your business and your employees.

Trust in Al Kabban & Associates’ extensive knowledge and experience in UAE labour law to assist you in maintaining a compliant workforce and fostering harmonious employer-employee relationships, ultimately contributing to the overall success of your business.

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