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Labour Law of UAE

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Introduction

Labour Law in UAE is regulated by Federal Law No.8 of 1980. Regulating Labour Relations as amended by Federal Laws No.24 of 1981, NO.15 of 1985 and No.12 of 1986. In some of the Free Zones in the UAE like the Jebel Ali Free Zone certain special labour related regulations are applicable.

Applicability of Labour Law of UAE

The law is applicable to all staff and employees working in UAE including UAE Nationals as well as expatriates (Article 3 of Law). But there certain categories of individuals who are not regulated by this law, such as Staff and workers employed by the Federal Government or any of its departments or projects, public bodies and institutions. Members of armed forces, police and security units, Domestic servants and Agricultural workers and persons engaged in grazing are also exempted.

Aspects of the Labour Law of UAE

The Law regularizes all the aspects of the employer-employee relationship which includes matters related to employment contracts, restrictions on the employment of juveniles and women, maintenance of records and files, wages, working hours, leave, safety, medical and social care, codes of discipline, termination, compensation, penalties, inspection and employment related accidents, injuries and death.

Enforcing Authority of the Law

The Law is federal and is enforced by the Ministry of Labour (http://www.mol.gov.ae/english/newindex.aspx). All labour related disputes are first referred to the Ministry. If either the employer or the employees is not satisfied with the decision of the Ministry and the matter cannot be amicably settled, the dispute is then referred to federal and local courts by the Ministry. After two weeks from the date when the complaint was filed, the parties can directly revert to the court.

Primary Pre-requisites for employment

Employees who are a UAE national can enter into an employment contract at any time. Such contracts need not be in writing and the terms and conditions of employment may be proved by any admissible means of proof. However, in order to employ an expatriate employee, an application must be made to the Ministry for approval before the employee entering UAE. In addition to this certain immigration procedures need to be followed. A bank guarantee as security for end of services benefits and repatriation costs related to the employees is also required to be submitted to the Ministry by certain employers. The employment contract for non-nationals must be in written format approved by the Ministry unless which labour permit for an expatriate employee will not be issued.

Types of Employment Contracts

There are two types of Employment Contract which are as follows-

  1. Limited or fixed term employment contract – Contract which has a commencement and completion date with term of not more than four years. Such contract can be renewed with mutual consent.
  2. Unlimited employment contract – Contract which has a commencement date but no completion date. Under such contract employee continue to work from a specific date until such time as the contract is terminated by either party after giving a minimum of 30 days notice or by mutual agreement.

Contents of employment contract

Employment contract must contain the following information:

  1. Wages/remuneration payable.
  2. Date of the employment contract.
  3. Date of commencement of the employment contract.
  4. Nature of the contract (limited or unlimited).
  5. Nature of work.
  6. Duration of contract in cases of fixed term contract.
  7. The location of employment.

Standard employment contracts in Arabic and English are provided by the Labour office at the Ministry which can be filled in by the employer and employee.

Probation Periods for Labour in UAE

Probation period is not compulsory under the law and can be waived off. However, it is a common practice in UAE to employ persons on an initial period not extending more than six months. During the probation period the employment contract may be terminated without valid reason or notice. The employer will not be liable to pay any compensation or end of service benefits to the employee in such cases. Once completed the probationary period is included as part of overall employment term and is also taken into account while calculating gratuity and other terminal benefits.

Wages for Labour in UAE

Wages include the following as per law:

“All payments made to the worker on a yearly, monthly, weekly, daily, piece work, or production, or commission basis in return for the work he performs under the contract of employment, whether such payments are made in cash or in kind. Remuneration shall include the cost of living allowance. It shall also include any grant given to the worker as a reward for his honesty or efficiency if such amount are provided for in the contract for employment or in the regulations of the establishment or have been granted by custom or common practice to such an extent that the workers of the establishment regard them as a part of their remuneration and not as donations.”

Restrictions on employment of Juveniles and Women

Employers must obtain certificates proving age, medical fitness and consent of guardian of the juveniles before employing them. Employment of juveniles below the age of 15 is prohibited. Juveniles cannot be employed to work at night or in hazardous jobs. Working hours is restricted to a maximum of six hours and working in overtimes and holidays are also restricted by law. Employment of women at night between the hours of 10.00 pm and 7.00 am is prohibited with exceptions such as employees in technical and administrative positions and in health sectors.

Working Hours for Labour in UAE

An adult employee can work for a maximum period of eight hours per day or forty-eight hours per week with certain prescribed exceptions.

Leaves for Labour in UAE

An employee is entitled of the following types of leaves:

  1. Annual leave – Two days of leave for every month if his service is more than six months and less than one year and a minimum of thirty days leave if his service exceeds one year.
  2. Official leave – On listed holidays the employee is entitled to official holiday with full wage.
  3. Sick leave – An employee is entitled to avail sick leaves if reported to the employer in case of illnesses or injuries.
  4. Maternity leave – A working woman is entitled to 45 days maternity leave with full pay.

Disciplinary Actions

The law prescribes disciplinary actions to be imposed on employees, which included fines, warnings, suspensions, prevention or postponement of periodic allowances, deprivation of promotion and termination.

Termination of contract-

An employment contract can be terminated by mutual agreement or end of the contract term or by one of the parties where the contract has an unspecified term after giving prescribed reasons and notice.