Federal Law No. 33/2021 on Regulation of Labour Relations, which will come into force on 2 February 2022, will repeal the current Federal Labour Law on the same issue (Law No. 8/1980). The new law refers to Implementing Regulations to be issued by the Ministry of Human Resources and Emiratisation, which will include additional explanatory provisions to the new law and also set out further frameworks.
Some key changes include:
- Recognition of non-traditional forms of employment, including; part-time, temporary and flexible employment relationships.
- Unlimited term contracts will be obsolete under the new law, with employees being required to engage on fixed term contracts not exceeding three years, which may be renewed by mutual agreement any number of times.
- Termination by either party whilst under probation will require service of 14 days’ notice.
- A number of new provisions introduced permitting assignment of different work to an employee in specific circumstances.
- Overtime hours have been overhauled with a cap of 144 hours of working time over a three-week period.
- Expanded list of permitted salary deductions.
- Notice period have been revised, with the minimum notice remaining 30 days but with a new maximum cap on notice of 90 days.
- Additional circumstances have been added as reasons for terminations of the employment contract, including; permanent closure of the employing establishment, the employer’s bankruptcy, insolvency or inability to continue the business for any economical or extraordinary reasons, or the worker being unable to renew their work permit for reasons beyond the employer’s control.
- End of service gratuity has been amended to be based on working days and not calendar days, there is no reduction due to employee resignation, and termination without notice does not impact an employee’s entitlement to gratuity.
- The new law no longer contains specific entitlements for arbitrary dismissal.
- The law imposes an obligation on the employer to pay the employee their wages and any other dues within 14 days of the termination date.
- Some clarity added around restrictive covenants.
Key Action Points for Human Resources and In-house Counsel
Employers need to review the current employment contracts and policies and ensure they are compliant with the new legislation. Employers will also need to place all employees on fixed-term contracts within 12 months of the law coming into effect.
