Hiring employees in the UAE is not just about offering a salary and issuing visas. The country has a structured labour and workplace governance system, and every company—whether small or large—is expected to maintain certain HR documents. These documents protect employees, but just as importantly, they protect employers from disputes, fines, and operational disruption.
Many business owners only realise the importance of HR documentation when a problem arises: an employee complaint, a sudden resignation, or a labour inspection. By then, missing or poorly drafted documents can become expensive mistakes.
Employment Contracts: The Foundation of the Employer–Employee Relationship
The employment contract is the most important HR document in any UAE company. Private-sector labour relations in the UAE are governed by Federal Decree-Law No. 33 of 2021 and Cabinet Decision No. 1 of 2022. However DIFC and ADGM employers and employees are subject to separate regimes. Federal Decree-Law No. 33 of 2021 introduces:
- All private-sector contracts are fixed-term and registered digitally with Ministry of Human Resources and Emiratisation (MOHRE). Term length is agreed by the parties (commonly two years in practice); contracts can be renewed or extended.
- Strict Wage Protection System (WPS) compliance and MOHRE registration timelines
- Flexible working arrangements and structured dispute resolution pathways
- Significant penalties for non-registration or contract delays
It defines the relationship between the company and the employee.
Fixed-Term Employment Contracts
Employers must place all employees on fixed-term employment contracts with a maximum term of three years. Contract terms may be shorter if agreed upon. There is no maximum number of fixed-term contracts that employers may enter into successively. These contracts:
- Clearly state the start and end date of employment
- Set out the job title, duties, and reporting line
- Specify salary, working hours, leave, and notice periods
Under Federal Decree-Law No. 33 of 2021, the “unlimited” contract has been entirely abolished for onshore companies, including those in Abu Dhabi mainland, in favor of standardized, fixed-term agreements.
Why this matters for employers:
A clear, compliant contract reduces misunderstandings and gives legal certainty if employment needs to end.
Salary Structure in the Contract
UAE doesn’t set a statutory minimum wage, but offers must reflect fair market value based on job role, qualifications, and location. It must include:
- Basic Salary
- Allowances: Housing, transportation, schooling, medical, travel, etc.
- Deductions: Emirati pension, GCC social security (if applicable), insurance, loan repayment
This is important because end-of-service benefits are usually calculated on basic salary, not total pay. If the contract is unclear, authorities may calculate benefits on the full amount—raising costs for the company.
HR Policy Manual / Employee Handbook: The Company Rulebook
While the employment contract establishes the individual’s legal standing, the HR Policy Manual or Employee Handbook functions as the “operating system” for the entire organization.
Article 14 of Cabinet Resolution No. 1 of 2022 on the Implementation Regulation of Federal Decree Law No. 33 of 2021 requires employers—particularly those with 50 or more employees—to maintain internal work regulations covering work instructions, disciplinary rules, health and safety, and grievance procedures.
What an Employee Handbook Covers
A well-drafted handbook explains:
- Working hours and attendance rules
- Leave types and how to apply for them
- Sick leave and medical requirements
- Workplace conduct and discipline
- Health and safety rules
- Remote or hybrid work policies
Why it matters
Courts and authorities often look at the handbook to decide whether an employer acted fairly. Without written rules, disciplinary action can be challenged as “arbitrary”.
Leave Policies: Avoiding Confusion and Disputes
Employees in the UAE are entitled to a range of leave benefits under labor law, ensuring a work-life balance.
Common Leave Policies to Document
Key leave entitlements include:
- Annual leave – Article 29 says that employees with one year of service are entitled to 30 calendar days of paid leave
- Sick leave – Article 31 says that employees are entitled to up to 90 days of sick leave, with varying pay scales.
- Maternity leave – Article 30 says that Female employees receive 60 days of leave, with full pay for the first 45 days and half pay for the remaining 15 days.
- Public holidays such as Eid Al-Fitr, National Day, and Islamic New Year are granted as paid leave, and employers must plan their operations accordingly to accommodate public holiday schedules.
The handbook should clearly explain:
- Approval process
- Documentation required
- Whether unused leave can be carried forward
Business benefit:
Clear leave policies prevent misuse and reduce conflict between managers and staff.
Code of Conduct: SettingBehaviouralStandards
A Code of Conduct in the UAE is not merely a “nice to have” cultural document; it is a vital tool for harmonizing a diverse, multinational workforce with the country’s specific legal and cultural expectations. Because the UAE is home to over 200 nationalities, an ethics policy serves as the common denominator that ensures professional behavior remains consistent despite varying cultural backgrounds.
For companies in Abu Dhabi mainland and free zones like ADGM, the Code of Conduct acts as a protective shield against “reputational collapse” and “operational disruption”.
During the holy month of Ramadan, the entire rhythm of business shifts. Muslims fast from dawn to dusk, and out of respect, non-fasting employees must refrain from eating, drinking, or smoking in public spaces or in front of their fasting colleagues. A company’s Code of Conduct should explicitly detail these seasonal expectations, as failure to do so can lead to profound cultural friction and even legal fines of up to AED 2,000 for public consumption during daylight hours. This is is specifically mentioned in of the Federal Penal Code.
What a Code of Conduct Usually Includes
- Professional behaviour at work
- Dress code expectations
- Respectful communication
- Use of company property and systems
- Conflict of interest rules
Why this is important:
Many workplace problems are not about performance but behaviour. A Code of Conduct gives management a clear basis to act.
Anti-Harassment and Workplace Safety Policies
Under Article 14 of Federal Decree-Law No. 33 of 2021, harassment and bullying is illegal in the workplace and can be reported to the MOHRE. Such behaviour in the workplace is unprofessional and unacceptable. A company of any reasonable size should have a company handbook that details procedures to handle this type of problem.
Anti-Harassment Policy
If an employer fails to act on a harassment complaint, the employee has the right to resign without notice within five working days of the incident, provided they report the matter to the MOHRE, as outlined under Article 45 of Federal Decree-Law No. 33 of 2021. In such cases, the employer is often ordered to pay “arbitrary dismissal” compensation, which can be up to three months’ salary.
Therefore, an Anti-Harassment Policy must include:
- Clear Definitions: Examples of what constitutes harassment (verbal, non-verbal, physical).
- Safe Reporting Channels: A way to report abuse without going through the direct manager .
- Zero Retaliation Guarantee: A promise that the “complainant” will not be penalized for raising a concern in good faith.
Why this is important:
If a company can show it had proper policies and acted promptly, it greatly reduces legal risk.
Disciplinary Procedure: Handling Misconduct the Right Way
A workplace without a clear disciplinary framework is a liability waiting to happen. Under Article 39 of Federal Decree-Law No. 33 of 2021, the UAE has codified a specific a hierarchy of penalties that must be followed before an employee can be dismissed. This ensures that summary termination, dismissal without notice, is reserved only for the most egregious offenses, while minor infractions are dealt with through corrective measures.
The Hierarchy of Sanctions
- Written Notice: For minor lapses.
- Written Warning: For repeated lapses or more serious issues.
- Wage Deduction: Cannot exceed five days’ pay per month.
- Suspension Without Pay: For a maximum of 14 days.
- Deprivation of Promotion/Bonus: For up to two years.
- Termination with Benefits: For continued failure to perform or serious policy breaches.
Disciplinary Policy Should Explain the types of misconduct and Investigation steps. Authorities expect a gradual and documented approach, except in very serious cases.
Termination Without Notice
Article 44 of Federal Decree-Law No. 33 of 2021 provides the “Nuclear Option”: ten specific scenarios where an employer can terminate an employee immediately without notice and without end-of-service benefits. These include:
- Using forged documents to get the job.
- Causing “material loss” to the employer through a gross mistake (must report to MOHRE within seven days).
- Breaching workplace safety instructions repeatedly despite written warnings.
- Assaulting the employer or colleagues.
- Being under the influence of alcohol or drugs during work hours.
For a layman, the “Material Loss” clause is the most dangerous. If a worker crashes a company truck or deletes a database, the employer must report this to the MOHRE within seven working days of discovery. If they wait until day eight, they lose the legal right to terminate without notice under this specific clause. This highlights the need for a “Disciplinary Procedure Document” that includes a clear timeline for reporting incidents to HR.
Grievance Policy: An Internal Problem-Solving Tool
A “Grievance Policy” is the reverse of a disciplinary policy; it is the mechanism by which employees can raise concerns about their pay, their manager, or their working conditions. As we know Under Article 14 of Cabinet Resolution No. 1 of 2022 on the Implementation Regulation of Federal Decree Law No. 33 of 2021 employers with more than 50 workers must adopt and publicise written internal regulations on discipline and grievances, aligning with MOHRE’s expectations.
The policy should provide:
- A clear reporting channel
- Escalation options if the manager is involved
- Fair and timely investigation
Business advantage:
Many disputes can be resolved internally before they reach authorities or courts.
Whistleblower Policy (Especially for Free Zone Companies)
While the mainland regime focuses on “complaints,” the financial free zones have introduced formal “Whistleblower Protection” frameworks that mirror those in London or New York. For example the ADGM Whistleblower Protection Regulations 2024 are particularly robust, requiring all “Large Establishments” (over 35 employees) to have written policies and procedures in place.
A “Protected Disclosure” in the ADGM covers reports of financial crime, money laundering, or breaches of any ADGM regulation. The law protects the whistleblower from any “detriment” or “disadvantage,” meaning they cannot be demoted, have their salary reduced, or be excluded from promotion because they “blew the whistle”. If an ADGM entity fails to protect a whistleblower, it can even have its commercial license suspended.
For a company operating across both mainland and free zones, the strategic recommendation is to adopt the “highest common factor.” By implementing an ADGM-standard whistleblower policy across all branches, the company ensures it is protected against both the criminal obligations of the UAE Penal Code (which requires all persons to report crime) and the specific administrative requirements of the free zone regulators.
Final Thoughts: HR Documents as a Business Asset
Many business owners see HR documents as paperwork created only to satisfy regulators. In reality, they are management tools.
Well-drafted HR documents:
- Reduce disputes
- Improve workplace discipline
- Support growth and scaling
- Build trust with employees and authorities
In the UAE’s evolving regulatory environment, strong HR documentation is no longer optional—it is a core part of running a successful and sustainable business.
For companies unsure whether their contracts, policies, or handbooks are compliant or up to date, a legal review can prevent costly mistakes and ensure the business is prepared for future growth.
