UAE labor law revision will help companies in talent war
Dubai-based Luke Tapp of Pinsent Masons, the law firm behind Out-Law, spoke out following Federal Decree Law No. 33 of 2021 regulating industrial relations in the private sector. The new law – the first major update of UAE labor law since 1980 – comes into effect on February 2, 2022.
Tapp said: “This is an extremely positive and exciting development for both international and regional companies operating in the UAE and will be a welcome development for all stakeholders in the UAE private sector. This is a major milestone for the UAE and will only increase and improve working arrangements within the UAE and help the region attract and retain world class talent. The law will develop key provisions on family leave entitlements, anti-discrimination laws and termination provisions. “
In a statement, the United Arab Emirates ‘Ministry of Human Relations and Emiratisation said the new law “aims to improve the resilience, resilience and sustainability of the labor market across the country and ensure the protection of workers’ rights”. The ministry said it had consulted with federal and local government stakeholders as well as business representatives on the reforms.
According to the ministry, the law strengthens the protection against mistreatment of employees, including in relation to sexual harassment and physical or psychological abuse. It also prohibits “all forms of discrimination based on race, skin color, gender, religion, national or social origin or disability that would limit opportunities for equal opportunities, impair equal access to or the continuation of employment and the enjoyment of rights”.
The new law also provides that companies can introduce part-time and flexible working time arrangements. Details of the conditions and control of work patterns, as well as the obligations of each worker and employer, are to be laid down in implementing rules currently being drawn up by the Ministry.
Like the 1980 Labor Act, the new law allows employers to include non-compete clauses in their employment contracts to protect themselves from the risk of employees switching to competing companies and taking confidential information with them. However, the ministry confirmed that strict conditions apply to their use, including that such clauses can only last for a maximum of two years, while the 1980 law is silent about the duration of the restriction.
Further restrictions apply to the use of fixed-term contracts. A maximum of three years can be set for fixed-term contracts, but employers and employees can extend or extend the contract “once or more times for a similar or shorter duration,” the ministry said. All open-ended contracts will be converted to fixed-term contracts, which will be subject to the new restrictions, it said. “How this is put into practice will be a key question and task for HR professionals and in-house lawyers alike,” said Ruth Stephen of Pinsent Masons.
A new right to paid parental leave is introduced and the new law clarifies that five days of paid parental leave applies to both women and men. Previously it was discussed whether this only applies to men in the form of “paternity leave”.
The new law regulates, among other things, “the controls and conditions for the termination of employment contracts in such a way that the rights of both parties are guaranteed,” said the ministry. Significantly, the new law provides for a maximum notice period of 90 days.