Property market expert Ryan Mahoney (Dubai, UAE) serves as CEO of both CenCorp and Better Homes. This article will outline changes in labor laws in the United Arab Emirates (UAE) and how a raft of new policies have made the country even more enticing for both foreign investors and employees.
In 2022, the UAE Government implemented new labor laws. This came in the wake of an overhaul of the Dubai International Financial Center (DIFC), which has pioneered employment law changes by introducing new legal concepts such as secondments and anti-discrimination.
In tandem with these recent pioneering changes, Federal Decree Law No. 33 (the ‘New Law’) became effective in February 2022; the New Law seeks to ensure that the UAE is aligned with international working standards for employees by developing new and improved employment practices.
Key changes under the New Law include:
- Flexible Working Arrangements: In response to COVID-19, many organizations introduced alternative working arrangements that were not expressly addressed within UAE law. The New Law introduces new working arrangements, covering aspects such as temporary, flexible, and part-time working. The legislation acknowledges that employees may work remotely, both within and outside of the UAE, provided that they have the consent of their employer.
- Fixed Term Contracts: Prior to enactment of the New Law, employees were permitted to enter into either unlimited or limited employment contracts. However, under the New Law, unlimited term contracts cease to exist. Instead, all employees must be offered fixed term employment contracts that must not exceed three years in duration, with the ability for the contract to be renewed on a similar or shorter duration. Should the contract not be renewed upon its expiry, then the New Law provides that the parties should continue to operate as though the contract were still in effect, adhering to the same terms and conditions.
- Termination: The New Law provides that employment contracts may be terminated for a legitimate reason and that written notice must be given, with a statutory maximum of 90 days’ notice and a minimum of 30 days’ notice.
- Salaries in Any Currency: The new law also confers upon employers the ability to pay employees’ salaries in any currency.
Other aspects addressed by the new law include protection against bullying and sexual harassment, protection of workers’ documents and right to remain, maternity pay, annual leave, and equal pay for men and women. The measures have been hailed as going a long way towards raising the profile of the UAE and making it more attractive to both foreign investors and workers.