New UAE Rule On Job Contracts

In order to enable a more balanced environment for both employers and employees in the UAE, the UAE government has updated its regulations on employment relationships which will further provide flexibility between employers and employees.

The new UAE labor law came into effect on the 22nd day of February 2022.

In this post, we shall be giving an insight into some of the significant changes that have been introduced into the UAE Labour law.

The first update we will be discussing is the term of the employment contract. It has now been introduced in the new Labour law that the employment contract between an employer and an employee must carry a defined term. Still, the law no longer specified how long the contract should be unlike what was provided in the previous law. The new provision also provided that if a contract is not renewed upon its expiration and the parties continue to implement their obligations and duties as contained in the contract, the contract shall be considered renewed under the same terms as set out in the actual contract.

The second update that was introduced into the Labour law creates an opportunity for a flexible, temporary, and l part-time work model for employees which will make it easy for employees to combine more than one job under the condition that the employee does not violate the maximum number of hours stipulated in the employment contract for each employer.

The work models that employees will be entitled to in the new law are briefly explained below;

Part-time Work Model: this model allows an employee to work for more than one employer for a distinct number of hours or days.

Flexible Work Model: under this model, working hours or days may change depending on the need of the employer.

Temporary Work Model: an employee under this work model works on a specific assignment as instructed by the employer.

Full-Time Work Model: an employee works only on a full-time basis.

Another significant change that was made in the new UAE Labour law is that in the previous law, an employee was subjected to a maximum of six months probationary period with no notice required from either party to terminate the contract. But under the new provision, the maximum probationary period still remains but employees must give a 14days notice to dismiss the employee. While the employee is mandated to give a 14days notice to resign if they want to leave the country and a one-month notice to the employer if they are leaving to join another employer within the UAE.

The new update now also provided that an employee can be paid in currencies other than dirham(AED) by reaching a mutual agreement between the employer and employee to this effect, unlike the previous law which stated that salaries had to be paid in dirhams.

The new Labour law permits the employer to include a non-compete restriction in the contract with its employees. This was provided for in Article10 of the UAE Labour law. These restrictions must be limited to the extent necessary to protect the business interest. The non-compete restriction can last up to a period of two years.

Conclusion

The UAE government is tirelessly burning the midnight oil to pave the way for businesses and workers to agree on long-term contractual agreements to further provide stability in the work sector. This newly amended law governs employment in the private sector and not the public sector and domestic workers.

For more information about Labour Law and for all your business needs, advice, compliance, and legal requirements as well in the Middle East, Asia, and Africa please feel free to contact us for a free consultation. We are just a click away. We also assure you that we will tend to your requests.

We at eLegal consultants look forward to meeting you and are ready to journey with you to realize your dreams. Contact us today.

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