The UAE’s new labour law will take effect February 2, and it is expected to provide greater protection to employees and help attract more talent to the Gulf country. The wide-ranging changes are expected to boost end of service gratuity for employees by around 35 to 40 percent. The law also introduces part-time, temporary, and flexible working models.
More updates will be released regarding the law, but ahead of the new year, Arabian Business spoke with Bassem Daher, a partner at Dubai-based Galadari Advocates and Legal Consultants, about what the new law means for employees in the UAE.
How will the law boost the overall attractiveness of the UAE to employees?
The main changes in the law are focused on protection, fair and equal treatment and a better organisation of work relationships.
Introducing reforms in matters like anti-harassment, anti-discrimination, gender equality, work flexibility and fair leaves make the UAE more attractive for qualified talent who prioritise work-life balance and wellbeing.
The UAE is a jurisdiction in which the government and the private sector are partners in attracting investments, businesses and talents.
What is the most significant change for employees within the new law?
The law is a positive reform, providing more protection, flexibility and fairness to the UAE work environment. Some of the changes have been implicitly implemented already either by market practice or by jurisprudence precedents. The most significant changes include:
- Flexible contracts, including full-time, part-time, temporary or flexible work
- Prohibition of discrimination, harassment and abuse
- Equal pay between genders
- Prohibition of official documents retention (including passports)
- Non-compete clause limited in place, time (maximum two years) and type of work
- Maternity leave of 60 days maternity including 45 full-pay and 15 half-pay
- Bereavement leave of five days for the death of a spouse and three days for the death of a parent, child, sibling, grandchild or grandparent
- Academic leave of 10 working days
- Fixed-term employment contracts with a three-year maximum term (renewable)
- 14 days written termination notice by employer during probation period (30 days if terminated by the employee)
- One day per week unpaid leave during notice period for job hunt
- No severance pay reduction in case of termination by the employee
- Some minor amendments to the end of service / severance terms and conditions
What do the new rules on non-compete clauses mean for employees?
The non-compete clause must be limited to two years, space and type of work. Such limitations make non-compete clauses fairer to both sides, in a way where the employer is “protecting [its] legitimate interests” without making finding other work impossible for the employee as its non-compete obligation is limited.
The limitations are in fact a reflection of the UAE jurisprudence precedents and market practice on the one hand, and the legal framework in many western countries. We do expect a fine-tuning in practice based on judicial determination of abusive clauses moving forward.
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