2023 UAE Labour Law Updates: Essential Legal Insights for Employers and Employees — Understand the Significant Changes in Employment Contracts and Employee Rights in the UAE

By Karam Shakra

Whether you are an individual or a corporation, it’s crucial when in the United Arab Emirates, including Abu Dhabi, to be well-acquainted with the latest amendments in the UAE Labour Law. The new law introduces significant changes that affect employment contracts, employee benefits, and the overall legal framework governing employer-employee relationships. Here’s a comprehensive overview of what you need to know.

Key Changes in Employment Opportunities and Contracts:

Fixed-Term Contracts: The new law transitions from unlimited to fixed-term contracts, not exceeding three years. This aligns with the typical duration of UAE residency visas. Employers are required to convert all existing unlimited-term contracts to fixed-term ones by February 2023.

Probation Periods: The law mandates a probation period of 3 to 6 months, with specific regulations for termination and rights during this period. This includes restrictions on the use of sick leave and gratuity entitlements during probation.

Employee Benefits and Protection:

Minimum Wage and Working Hours: The law does not specify a universal minimum wage for expatriates, while Emirati nationals’ minimum wage depends on their educational level. The standard workweek is set at 48 hours, with variations for public sector employees.

Overtime, Leaves, and Insurance: Employees are entitled to overtime pay, various leaves (maternity, paternity, sick, etc.), and mandatory health insurance coverage.

Termination and Severance:

Contract Termination: The law allows termination of fixed-term contracts for legitimate reasons, with the necessary notice. Redundancies under specific conditions, such as insolvency, are now recognised as legitimate grounds for termination.

End-of-Service Gratuity: The new law ensures that employees are entitled to their gratuity regardless of the termination reason, removing previous restrictions related to length of service or summary dismissal.

New Regulations for the Private Sector: The amendments introduce flexible working hours, job-sharing arrangements, and extended stay duration post-employment. It also emphasises non-discrimination and protection against harassment, enhancing employee rights in the workplace.

Implications for Employers and Employees: Businesses need to update their HR policies and employment contracts in line with these changes. It’s essential for employers to communicate these changes to their workforce to ensure compliance and avoid legal repercussions.

Conclusion: The UAE Labour Law 2023 brings forth a paradigm shift in the employment landscape of the UAE. It’s imperative for both employers and employees to understand these changes to navigate the legalities effectively. As a leading law firm in Abu Dhabi, Al Murshed is committed to assisting businesses and individuals in adapting to these legal changes seamlessly.