The United Arab Emirates' new set of labor laws governing private-sector employment relations took effect on February 2. The changes in the law are substantial and necessitate amendments to existing employment contracts, as well as modifications to policies and procedures concerning future agreements with new employees. Gordon Barr, Partner at Al Tamimi & Company elaborated on the changes and implications in a recent global webinar. A summary of the call is below the video.
Fixed-Term Contract Requirements
The most significant change requires employers to amend any unlimited-term employment agreements to fixed-term employment contracts with a maximum term of three years. Contract terms may be shorter if agreed upon and can be renewed for unlimited times. Employers have until February 2023 to move all employees to fixed-term agreements.
Probationary period refers to the time when an employer scrutinizes an employee's performance. Under the new labor law, it remains unchanged at six months maximum, however, it introduces certain notification requirements during the probation period. Specifically, if an employee is on probation, employers must now provide a minimum of fourteen days’ written notice of the intention to terminate the employment contract.
The New Leave Landscape
Annual Leave Rollover: Under the new law, employees must use their 30-day annual leave in the same calendar year that it accrues, unless otherwise agreed by the parties. Employees are entitled to payment in lieu of unused leave upon the termination of employment calculated based on an employee’s basic salary only.
Maternity Leave: The new law increases maternity leave entitlements to 60 calendar days by adding 15 days at half pay. Maternity leave should be provided to all employees, including those who have served the company less than one year. The law reduces employees’ entitlement to nursing breaks from 18 months to 6 months from the date of delivery. Employees still have extended unpaid time off after exhausting maternity leave for pregnancy related medical conditions, but the entitlement has been reduced to 45 days from 100 days.
Compassionate Leave: In the event of the death of an employee’s spouse, the law entitles the employee to five days’ paid leave. In the event of the death of an employee’s parent, child, sibling, or grandparent, the law entitles the employee to three days’ leave.
Study leave: Employees with more than two years’ service who are affiliated or regularly studying with an approved UAE educational institution are entitled to ten working days of study leave per year. More detail is expected to be provided regarding payment to these employees.