UAE’s new labor laws

UAE’s new labor laws

By now, most of us heard about the Ministry of Labour’s new rules which were effective from the 1st of January.

How they are going to impact the employer-employee relationship? If  you want a better understanding of this then you should read on, if not, we suggest you keep reading anyways :).

Keep in mind that these new rules are for private companies registered under the UAE Ministry of Labour.

The new rules are based on 3 Ministerial Decrees; 764, 765 and 766 which we will highlight one by one, you can find all Decrees on the official website of the Ministry of Labour.

The Ministerial Decree 764 – Approved Standard Employment Contracts

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An employment offer must conform with the ” Standard Employment Contract” as defined by the Ministry of Labour, and must be signed by the employee and presented to the Ministry of Labour to obtain the tentative approval to admit a foreigner worker. This contract must be signed by the employee and employer and presented to the Ministry of  Labour to obtain tentative approval to admit a foreign. No clauses can be added to the contract after this, without a new approval by the Ministry on any changes that need to be incorporated. Click here to read the decree

 

The Ministerial Decree 765 – Rules and Conditions for the Termination of Employment Relations

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Termination of fixed-term contracts (ie. 2 years contracts) need to be approved by the Ministry and can be terminated on one of these such grounds:

  • Mutual agreement between the employer and the employee.
  • Expiration of the contract without renewing it.
  • If either party terminates the contract, the following applies:
    • They should provide a written notice to the other party in advance as agreed between the employer and the employee and stated in the employment contract.
    • The notice period should be a minimum of one month and should not exceed 3 months.
    • Indemnification should be provided as agreed between the employer and the employee; this must not exceed the equivalent of three months of gross wages.
    • The party that terminates the contact without complying with the legal conditions  and for no reason of non-compliance by the other party; in this case the terminating party bears any legal consequences of early termination.
  •  If a worker commits violations prohibited under Article 120 of the Federal Labour Law.

In the case of unlimited contracts termination can occur if there is a:

  • Mutual agreement between the employer and the worker.
  • A written notice submitted from the party that terminates the contract and must continue to honor contractual obligations for the duration of the notice period. The notice period is as agreed between the employer and the worker and cannot be less than one month and cannot exceed three months.
  •  If a worker commits violations prohibited under Article 120 of the Federal Labour Law.

Click here to read the decree

 

The Ministerial Decree 766 – Rules and Conditions for granting a permit to a worker for employment by a new employer

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A new work permit may be granted to a worker upon the termination of an old employment contract, if it is for reasons stated in the decree: Click here to read the decree.

What this now means, is that the six-month rule is waived if the worker has skill levels classified by the ministry as 1, 2, and 3 meaning those who hold a university degree, post secondary diploma or high school diploma, respectively. This will surely give employees more flexibility so as long as the conditions in the contract are abided to and in line with the decree.

 

In a nutshell, here are what these new rules are all about:

  • Standard Contracts must be presented to the Ministry of Labour to obtain the tentative approval.
  • These contracts can be terminated upon mutual agreement or a written notice.
  • A new work permit can be granted to the employees with skill levels 1, 2, and 3 as long as the employee abide to the conditions of their contract and in line with the decree.

This is surely a step in the right direction to making the  employer – employee relationship smoother and more transparent.

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