The United Arab Emirates (UAE) has implemented significant amendments to its labor laws in 2024. The amendments are aimed at modernizing and enhancing various aspects of employment to better align with global standards and the evolving needs of the workforce. Several changes have been brought to the UAE labor law, including salary continuation during disputes, flexible working arrangements, and more stringent regulations on labor disputes.
This article covers the fundamental changes and their implications for employers.
Table of Contents
Understanding the New Labour Law in UAE 2024
The UAE labor law is established in Federal Law No. 8, governing the labor relations in the UAE. It is a set of rules and regulations governing an employer and employee relationship. It underlines the regulations of all private sector employers regarding wages, kind of employment contracts, and how disputes between employers and employees are handled.
The new labor law UAE 2024 is designed to create a more balanced and fair working environment. The changes also encourage employers to embrace a competitive and flexible labor market that supports economic growth while protecting workers’ rights.
Changes in the New Labour Law of UAE
The latest UAE labor law introduced several significant changes designed to empower employees and give employers more flexibility regarding working arrangements. Here’s an in-depth look at the critical changes in the new labor law:
Salary Continuation During Disputes
The Ministry of Human Resources and Emiratisation (MOHRE) has included salary continuation during employment disputes to employ the labor force and give employees more power. This amendment can require employers to continue to give salaries to employees for up to 2 months while any disputes are being resolved.
This change is significant as it provides financial stability to employees during potentially lengthy dispute resolutions and reinforces the commitment to fair treatment in the workplace. Furthermore, if the parties involved in a dispute don’t settle within 14 days, MOHRE can refer the dispute to a competent court.
Probation Period Notice
The new labor law amendments in the UAE for 2024 introduce some significant changes in the guidelines regarding the probation period notice. The notice period can be three to six months and will remain the same in 2024.
However, now employers must provide a minimum notice period of 14 days before terminating an employee during their probation period. Employees should provide 14 days’ notice if they leave the UAE within their notice period.
They should provide one month’s notice if they go to join another company while serving a probationary period. If an employee leaves for another employer during probation, the previous employer can claim recruitment costs from the new employer.
Part-Time and Flexible Working Arrangements
Previously, only full-time employment was allowed in the UAE. Part-time employment was introduced in 2019, but the 2024 reforms make new work models possible. Now, employers can hire employees for temporary, flexible, remote working, and job-sharing roles. These changes allow employees to negotiate work hours and provide all job roles with the same entitlements.
Claim Value Limit for Labour Disputes
The new labor law also revises the claim value limits for labor disputes. If the dispute claim does not exceed Dh 50,000, then MOHRE will make the binding decisions. This adjustment is intended to streamline the dispute resolution process by categorizing disputes based on their monetary value. If the dispute amount is higher, then MOHRE can continue to act as a mediator and refer the matter to a competent court if a settlement is not reached.
Legally Enforceable MOHRE Decisions
New Labor Law UAE 2024 now recognizes the decisions made by the Ministry of Human Resources and Emiratisation as legally enforceable. This change strengthens the authority of the MOHRE and ensures that its decisions are ”writ of execution.” The ”writ of execution” serves as a court order giving more authority to MOHRE’s judgments without requiring lengthy legal processes.
Statute of Limitation for Labour Claims
The statute of limitation for labor claims has been clearly defined as one year in the 2024 amendments. Employees who do not file a dispute within this period lose their right to sue regardless of the claim’s merits.
Labour Laws in UAE 2022 vs. 2024
The labor laws in the UAE have undergone significant changes from 2022 to 2024. Here are highlights of the progress and evolution in employment regulations.
| 2022 | 2024 | |
| Salary Continuation During Disputes | No specific provisions ensuring salary continuation | 2024 amendments introduced the requirement for salary continuation during disputes for up to 2 months |
| Probation Period Notice | No guidelines for employers to provide notice to employees for termination during probation | Employers must now provide 14 days notice period during probation period, ensuring that employees have adequate time to seek alternative employment. |
| Part-Time and Flexible Working Arrangements | Only full-time employment allowed | Flexible working arrangements such as remote work, reduced hours, and job sharing are now allowed |
| Claim Value Limit for Labour Disputes | Labor laws did not specify claim value limits for labor disputes | 2024 amendments introduce revised claim value limits for labour disputes |
| Maternity Leave | Female employees could only have 45 days as Maternity Leave | But in the latest law, they can enjoy 60 days maternity leave |
| Emiratisation | The private companies with 20-49 employees should hire at least 1 Emirati. | This will increase to 2 in 2025. |
How the New Legislation Impacts Business Practices?
The UAE labor law amendments have significant implications for business operations. Companies must adapt to these changes to remain compliant and foster a working environment that respects employee rights.
Compliance Requirements
Regardless of their employee strength or size, businesses must comply with the new salary continuation provisions, probation period notice requirements, and flexible working arrangements. It requires employers to update employment contracts, HR policies, and administrative procedures.
Financial Impact
Companies will have to consider the financial obligation while hiring employees on probation with their current employer, as the new amendments give employers the right to seek compensation for the cost of hiring employees who leave during the probation period. Businesses with a large workforce may need to allocate additional resources to cover these potential costs.
Operational Adjustments
Adopting part-time and flexible working arrangements requires operational adjustments. Employers must develop policies and systems to manage diverse work schedules and ensure high productivity.
Potential Liability to Employers
The new labor laws also introduce more defined potential liabilities employers can face if they don’t provide workers with certain protections. It is important to know about these liabilities too. These include fines, discrimination, harassment etc.
Discrimination
The previous Anti-Hate Legislation provided limited protection against discrimination for employees. The new labor law emphasizes non-discrimination and equal treatment of all employees. It protects employees against discrimination based on race, sex, religion, social origin, disability, and national origin. However, any positive discrimination in favor of Emiratis is an exempted category.
Fines
Non-compliance with the new labor law now can result in hefty fines. Fine ranges introduced in new amendments include:
- AED 20,000-100,000 for furnishing false information to recruit an expatriate employee
- AED 50,000-200,000 for illegal employment or recruiting an employee without having any work to provide
- AED 5,000-1,000,000 for any violation of the UAE Labour Law
Harassment
While the old labor laws had no anti-harassment provisions, the new amendments underscore the importance of a harassment-free workplace. Employees are protected by sexual harassment, physical or psychological violence, and bullying. According to Article 14(2) of Employment Law and Article 413 of UAE Penal Law, the individuals who are found guilty of sexual harassment may have to face serious penalties like minimum jail sentence of a year, fine of Dh 10,000 etc.
Non-Compete Restrictions on Employers
The latest UAE labor law includes specific guidelines on non-compete clauses. These clauses must only go as necessary and be reasonable in scope, duration, and geographic area. They should not unduly restrict an employee’s ability to find new employment.
The new law also makes the non-compete restrictions unenforceable if the employer terminates the employment in breach of its legal obligations due to the employee. Other ways to avoid non-compete limits include:
The Parties' Written Agreement
Restrictive covenants can be set aside if both the employer and the employee mutually agree in writing to nullify the restrictions. The written agreement can effectively release the employee from the constraints of the covenant, provided both parties must consent to the agreement for it to be valid. There must be no ambiguity about the intentions of both parties regarding the covenant. Also, the agreement must be documented in writing.
Compensation Payment by New Employer or Employee
Restrictive covenants can also be set aside if the new employer or the employee compensates the old employer. This compensation typically includes up to three months’ salary to cover the cost of hiring the employee by the previous employer.
Termination During the Probationary Period
If the employee is terminated during their probationary period, the restrictive covenants cannot apply. The probationary period is typically a trial phase, and employment terms, including post-termination restrictions, may not fully apply if the employment ends prematurely.
Termination of Employment Changes Under the New Law
The 2024 amendments introduce changes to the termination of employment procedures.
Dismissal on Notice
Legitimate Reasons for Dismissal
Under the new labor law, employees can be dismissed for any ‘legitimate reason.’ This encompasses a broad range of valid grounds for termination, ensuring that employers have the flexibility to manage their workforce effectively. The expiration of a fixed-term contract is explicitly stated as a legitimate reason for dismissal, providing clarity for both employers and employees.
Fixed-Term Contract Dismissal
Employees on fixed-term contracts can now be dismissed on notice, similar to those on unlimited-term contracts. This change means employers do not need to provide additional compensation beyond the notice period for dismissing employees on fixed-term contracts. This standardization simplifies the termination process and aligns the treatment of different types of employment contracts.
Unlawful Victimization
The new law explicitly states that victimization, where an employee is dismissed for filing a complaint against the employer, is unlawful. This provision protects employees’ rights to raise concerns and complaints without fear of retaliation, fostering a more transparent and fair workplace environment.
Summary Dismissal
Expanded Grounds for Summary Dismissal
The exhaustive list of reasons for summary dismissal under the old labor law has been retained, with two additional grounds introduced:
- Abusing Position for Personal Gains: Employees who abuse their position to obtain personal gains and profits can now be summarily dismissed. This addition aims to maintain integrity and ethical conduct within organizations.
- Unauthorized Employment: Employees who join another establishment without complying with existing controls and procedures can be summarily dismissed. This provision helps prevent conflicts of interest and ensures employees adhere to contractual obligations.
Procedural Safeguards
Further limitations have been placed on summary dismissal for failure to carry out basic duties. Employers must conduct an investigation and issue written warnings before proceeding with summary dismissal. This procedural safeguard ensures that employees are given fair warning and an opportunity to rectify their performance issues before termination.
Entitlement to End-of-Service Gratuity
While summarily dismissed employees lose their entitlement to their notice period, they now retain their right to an end-of-service gratuity payment. This change provides a degree of financial security for employees who are dismissed summarily, acknowledging their service tenure despite the summary dismissal.
How Employers Can Adhere to the New Labour Law?
Adhering to the latest UAE labor law amendments requires a proactive approach from employers. Employers can ensure compliance by understanding the changes, updating internal policies, and ensuring compliance through training and technology. Here are key strategies that employers can implement to adhere to the new labor law:
Update Employment Contracts
Employers must review their existing contracts and company policies and update them to reflect the new provisions of the 2024 labor law. Clauses for salary continuation, probation periods, and flexible working arrangements must be included in every employee contract.
Develop Clear Policies
Employers need to develop clear policies that align with the new law to remove any ambiguity or confusion. This includes anti-discrimination, harassment prevention, and non-compete policies.
Training and Communication
Training HR personnel and managers on the new labor law is crucial. Clear communication with employees about their amended rights and any changes to company policies under the new labor law UAE 2024 is also essential.
Leverage Technology
Utilize technology to manage compliance with the new labor law. Workforce management software, like Truein, can help streamline processes, ensure accurate record-keeping, and facilitate flexible working arrangements.
Benefits of UAE Labour Law to Employers
The new labor law focuses on making the UAE compete in the employment market and helping employers attract and retain top talent. A positive and fair work environment enhances the company’s reputation. It makes it more appealing to potential employees. Here are some significant benefits of UAE labor laws for employers:
- Employers now have the option to terminate fixed contracts without paying additional compensation.
- Flexible working arrangements and part-time options can lead to increased productivity. Now, employers can hire freelancers and offer job sharing.
- Employers can reach out to MOHRE as the ministry can make legally enforceable decisions.
How can Truein help businesses?
Truein is a software with robust time and attendance features. The cloud-based solution can help UAE businesses comply with the new labor law amendments as per your selected settings.
Its key features include:
- Accurate attendance tracking using facial recognition technology ensures precise attendance records, supporting compliance with the new law.
- Provisions for flexible scheduling, such as part-time work arrangements, should be aligned with the 2024 amendments.
- Comprehensive reporting features to generate detailed reports to facilitate compliance with regulatory audits and internal reviews.
- Advanced data security measures protect sensitive employee information, ensuring compliance with data protection regulations.
For more information on how Truein can help your business explore its complete workforce management features, check here.
“Get centralized and foolproof Time & Attendance for your organization”
Book a Free Demo Now
Conclusion
UAE is one of the fastest-growing economies, offering businesses a global platform. The UAE labor law 2024 reforms represent a significant step towards modernizing their policies, enhancing worker protections, and providing greater flexibility in work arrangements. Truein, as an employee attendance system, reflects the UAE’s commitment to fostering a competitive and dynamic labor market. It offers all features that allow businesses to adapt to new labor law changes to ensure compliance and leverage the benefits of a fair and transparent working environment.
FAQs
1. What are the primary goals of the 2024 amendments to the UAE's labor laws?
The primary goals of the 2024 amendments to the UAE’s labor laws are to enhance employment rights and increase the UAE’s competitiveness as a prime location for living and working. These changes aim to attract and retain world-class talent by offering improved employee protections, greater flexibility in work arrangements, fair treatment in the workplace, and streamlined dispute resolution processes, fostering a more dynamic and attractive labor market.
2. How will the new labor law amendments impact working hours and overtime regulations?
The new labor law amendments promote flexibility and fairness in working hours and overtime regulations. The amendments encourage employers to offer flexible working hours, part-time positions, and remote work options, enabling work-life balance and overall job satisfaction. While the amendments support flexible work arrangements, they maintain the same guidelines for overtime. Employees who work beyond the standard working hours are entitled to overtime pay, calculated based on their regular wages and accurate working hours and overtime records.
3. Are there any changes in probation periods or notice periods for the termination in the new labor law?
Yes, the new labor law introduces specific changes and guidelines for probation and termination notice periods. The minimum notice period of 30 days continues; however, new rules are introduced.
4. Are there exceptions or special provisions for certain industries or types of employment?
Notably, the law does not apply to employees of federal and local government entities, members of the armed forces, police and security services, and domestic employees.
- Federal and local government entities’ employees are excluded from the new labor law’s provisions. This exclusion acknowledges the distinct nature of public sector employment, which operates under its own set of rules and regulations.
- Members of the armed forces, police, and security services are also excluded from the general labor law. Given the critical and sensitive nature of their duties, these personnel are governed by specialized regulations that ensure they meet the high standards of discipline, readiness, and security required in their fields.
- Domestic workers, including housemaids, nannies, and personal drivers, are excluded from the standard labor law and covered under separate legal provisions.
- The new labor law also allows for the possibility of future ministerial decisions or decrees that may carve out exceptions or extend certain provisions to these excluded categories.
