New Labour Laws in UAE Demand Greater Accountability from Both Employers and Employees

The new labour laws that have come into effect in the UAE on 2 February 2022 are expected to reflect the needs of businesses and HR in the current world of work. Some of these changes were long overdue, considering that the law is being updated for the first time since 1980. 

Michael Page invited employment law expert Thenji Moyo, Legal Director and Head of Employment, Gateley UK LLP (DMCC Branch), and Agni Skafidas, Managing Director, OLAM Group, to dissect the new labour laws, answer frequently asked questions and explain their practical application to businesses and to people management. The webinar titled ‘UAE’s New Labour Law: The Big Changes and How They Impact You’ helps us make sense of the changes. 

“The most important changes to the laws are to do with the nature of contracts, type of work and maternity leave. I find it interesting that the new laws make room for a safe work environment by drawing attention to stopping bullying, harassment, and discrimination. These new laws will make both employees and employers more accountable and professional in conduct,” said Thenji Moyo. 

Here's a selection of the most important new labour laws and what they mean for employers, HR professionals and employees. 

Employment Contracts 

• The change: All employment contracts will now be limited-term contracts. The contract will be for a maximum period of three years. Employers get time till 2 February 2023 to convert all unlimited contracts to limited-term contracts. 
• What it means for employers: Employers must identify when they can transition their employees to the limited-term contract. Changing all the contracts at once incurs financial costs to the company. Also, a question is that if all contracts end at the same time, what if employees leave at the same time? Employers must consider auto-renew options to maintain continuity and smooth the documentation process. 
• What it means for employees: The big concerns are job security and long-term stability, however many employers have reassured employees that the nature of the employment relationship will be relatively unchanged and opted for automatic renewal.
• Note: A dipstick poll during the webinar showed that 64% of employees are on Unlimited Contract with their employers. “This shows that most companies will have to make fundamental changes to their work contracts. But it is also an opportunity to change the conditions of work, if such a change is needed,” said Agni Skafidas. 

Types of Work 

• The change: Flexible types of work are recognized, making project-based and job-sharing types of work possible. Part-time employees are now entitled to annual leave on a pro-rata basis. End-of-service gratuity will also be paid on a part-time salary.   
• What it means for employers: Employers can hire and plan their human resources based on the skills needed to run an agile and flexible workforce. There could be a reallocation of resources, trimming some departments, expanding some others, and reorganizing for efficiency. 
• What it means for employees: This change offers more flexibility, allowing more control over one’s time. 

Working Hours

• The change: The laws remain similar to the old law with the intention to control overwork. The upper limit of 48 hours per workweek is in line with a unified HR law in many countries. The connected change in this regard is the shift to the Monday-Friday workweek. A poll during the webinar showed that 97% of companies adopted the Monday-Friday workweek schedule. Also, many companies are taking to the 4.5-day workweek or making room for flexible work hours on Fridays. 
• What it means for employers: Companies will have to personalize working hours based on business activity and employee needs. Every company’s approach will be different. Employers will have to focus more on making employees stress-free so that they can be ‘present’ at work when in the office. 
• What it means for employees: This change demands adjustments and reorganizing schedules. For example, in Sharjah, where kids don’t go to school on Fridays, the parents will have to make alternate child-care arrangements.   

Probation Period

• The change: A company can no longer terminate an employment contract without giving 14 days’ notice. Employees must also give notice of 14 days if they are leaving the UAE, and 30 days if they plan to stay in the country. If they leave the UAE, they can return only after a minimum period of three months. The new law gives an employer the right to claim recruitment costs from the new employer if an employee leaves during the probation period. The ‘recruitment costs’ are not defined but are expected to be clarified when the Executive Regulations are released by the Ministry of Human Resources and Emiratisation. 
• What it means for employers: The burden of making the right recruitment choice is higher on the employer. They need to ask more questions while hiring, such as the length of time spent at a previous employer. The HR will have to re-evaluate recruitment processes to focus on skills and capabilities of talent and must also conduct rigorous background checks. 
• What it means for employees: Leaving a company without serving notice makes it difficult to get a work permit again. 

Maternity/Parental Leave

• The change: In a revolutionary move, the new law makes provisions for women to extend maternity leave in case of pregnancy-related sickness, stillbirth, miscarriage and if mothers are tending to a disabled or sick child. The law also streamlines the number of breaks that nursing mothers can take, which are reduced in the new changes. There is also the introduction of parental leave, allowing five days within six months of the child’s birth. This leave is not gender specific and is in addition to maternity leave.  
• What it means for employers: Employers can make use of flexible work contracts to hire part-time workers to cover for the women on maternity leave. 
• What it means for employees: Parents will have a better worklife balance and this will be extremely useful for families with young children and children with medical issues.  

Discrimination, Bullying and Harassment  

• The change: These laws, which had been defined under the penal code, have now been newly introduced within the labour laws. The intent of drawing attention to these issues is to make the workplace safe, dignified, and free of discrimination of all sorts. 
• What it means for employers: Employee training and awareness campaigns are a must to avoid exposing the company to claims of discrimination. The company must build a culture of equality and safety, following healthy work practices. This should start at the induction level and in the various training programmes offered to employees. Failure to comply with the above, may expose the Company for penalties. 
• What it means for employees: There is a need to be aware of one’s rights and must treat fellow colleagues respectfully. Keep records and document any wrongful conduct or harassment to provide evidence. 

We will be hosting part two of this webinar on 22 February 2022 at 11am GST. Click here to register.