Year of the 50th legislative amendments – key considerations for directors of UAE companies
Employment, Pensions & Immigration
In November 2021, we outlined the main provisions of the new UAE Labour Law; Law No 33 of 2021 (New Labour Law) which came into effect on 2 February 2022 and completely replaced the old federal labour law (Law No 8 of 1980) (Old Law). The Implementing Regulations have now been published and provide further details on the practical application of the new UAE Labour law. Our article outlines five key takeaways for UAE employers.
The Implementing Regulations add two more work patterns to the four introduced by the New Labour Law: remote work and job sharing. Remote work is defined as a job where all or part of the work is performed outside the workplace and the communication between the employee and the employer is electronic instead of in person, regardless of whether the work is performed part-time or full-time. Job sharing further grants employers the option to split a job between more than one employee. The New Labour Law already set out full-time work, part-time work, temporary work and flexible work. The Implementing Regulations introduce specific work permits for each individual arrangement and clarify that the Ministry of Human Resources & Emiratisation will offer special employment contracts reflecting the arrangements between the parties, such as a remote employment contract or a flexible employment contract.
The Implementing Regulations have now clarified that the normal working hours will continue to be reduced by two hours during the holy month of Ramadan. Based on the Implementing Regulations, the following categories of employees will be exempt from overtime pay (including being exempt from enjoying the reduced hours during Ramadan):
The Implementing Regulations confirm that commuting time is generally not part of the working hours. However, exceptions, such as bad weather conditions and traffic accidents to this principle apply and this is a new provision under the Implementing Regulations.
Many employers have already noted that the New Labour Law makes no reference to Hajj Leave (also called Pilgrimage Leave). The Implementing Regulations are also silent on this previously granted leave and therefore, there is no longer an entitlement to Hajj Leave under the New Labour Law; such time off is instead left to the discretion of the employer.
The Implementing Regulations further provide that:
It is now a requirement for companies with more than 50 employees to have a grievance procedure in place. This is a deviation from the Old Law under which there was no mandatory grievance process to be followed.
Companies with more than 50 employees must further have work regulations which should include work instructions (working hours, weekly rest, festive holidays, measures to avoid workplace injuries), penalties, promotions and rewards and procedures for terminating employees. Employees must be made aware of these regulations and they must be published in a language that the employees understand.
It has been expressly clarified in the Implementing Regulations that non-compete clauses do not apply if the employer terminates the employment relationship or if the employee leaves work due to the employer breaching its obligations. The Implementing Regulations further confirm that the maximum term of a post-contractual non-compete restriction amounts to two years from the date of the expiry of the contract. The Implementing Regulations also set out conditions for the execution of a non-compete clause.
We anticipate that going forward, these Implementing Regulations will be reissued by the Ministry of HR and Emiratisation from time to time as it seeks to regulate the labour market. We recommend employers review their employee handbooks and policies as well as their employment contracts for compliance with the New Labour Law and its Implementing Regulations.
Our previous article regarding the new Labour Law summarises the changes made to gratuity, employment contracts, employer policies and flexible work patterns.