An Understanding of the Changes in Employment Contracts in the UAE

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Labour and Employment Laws get changed everywhere in world. Similarly, the Labour and Employment Laws of UAE also keep evolving. Most recently, the United Arab Emirates has implemented changes in its Labour and Employment Laws with the introduction of the new Labour and Employment Law. 

Therefore, there is an urgent need to protect employee rights. This comprehensive blog is written to simplify and explain the key aspects of Labour and Employment Laws. It also discusses the changes that are brought into action and its repercussions on Employment Contracts.

There is an introduction to Flexible Working Models. Before there was a proper recognition of full-time workers. Whereas, the part-time workers were not considered. Still, there are 12 types of work permits available in the UAE.

Moreover, there are almost 6 flexible working options. This initiative will bring benefits from various groups and will be extended to students as well. Normally, students choose to work part-time, and thus, in the reform they are facilitated including students. 

There is an elimination of Unlimited Contracts in the UAE. The new labor law replaces them with fixed-term contracts. Such types of contracts can last up to the time of 3 years. Once the fixed-term contract has expired, it can be renewed for an indefinite time period.

 Furthermore, the employers also need to implement the changes to their workforce in 2023. The renewals made in the employment contracts can contribute to the employee’s continuous service period. They can even continue if their contract is not renewed in a formal manner.

Employees who are transitioning from unlimited-term contracts to fixed-term contracts will face changes in the contract. There is a need for mutual understanding of the terms and conditions.

There is an introduction to the penalties for Non-Compliance in labor laws. Any failure to comply with the changes mandated by the new labor law can result in serious penalties. The employers will encounter a substantial fine of approximately AED 1,000,000. Latest and exact info can be grabbed from Labour and Employment Lawyers in Dubai.  

The employers need to ensure that they update all the employment agreements. It is also done to align them with the new regulations. This is essential to avoid any such penalties.

Modification is brought to Notice Periods and Termination Rules. The new law modifies the notice periods for termination. 

It is important to submit a 1-month notice if an employee joins another employer within the country. In case the worker chooses to leave the country, he needs to submit the 14-day notice. In case of a dismissal of the employee, there is a need for 14 days’ notice. There are changes bought into action for End-of-Service Gratuity. The new rules are introduced for the calculation of end-of-service gratuity. It is attached to the condition that they have served the provided the full year of their service. 

All the changes are equally applicable to foreign and full-time employees. The new law has maintained the annual leave entitlements.  The only change is to annual leaves and the employees must use all the annual leaves in the same calendar year. Previously, they were carried to the next year if not used in the same calendar year.

The new Labour and Employment Law explains the disciplinary sanctions for companies and organizations. It is for companies with over 50 employees. Such organizations must outline rules and internal policies on work regulation.

They need to explain the penalties, promotions, and termination procedures. Disciplinary sanctions can be imposed by the employers for breaches. This may include written warnings, deductions of five days’ wages, or suspensions of less than 14 days. 

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