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Updates of November 2023

The UAE Labour Law amendment has brought in a transformative development. We explore the implications for employers and employees in the UAE, with the introduction of Federal Decree-Law No. 20/2023 on 13/09/2023. These amendments, particularly replacing Article 54 of the Labour Law, mark a significant evolution in the realm of labor relations. This article explores the key changes and their implications for employers and employees in the UAE. 

Enhanced Ministry Authority

The cornerstone of the amendments lies in the expanded authority of the Ministry of Human Resource and Emiratisation (the Ministry) in addressing employment disputes. Effective from January 1, 2024, the Ministry plays a pivotal role in facilitating amicable resolutions before resorting to legal proceedings. 

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Dispute Resolution Process

As per the Labour Law, prior to initiating a case in the Court of First Instance concerning an employment dispute, both the employer and the employee are obligated to submit an application to the Ministry. The Ministry is tasked with reviewing the application and undertaking necessary measures to facilitate an amicable resolution of the dispute between the involved parties. This provision was articulated in the first subclause of the amended article.  

Before the amendments took effect, if the involved parties couldn’t reach an amicable resolution, the Ministry was obligated to refer the matter to the courts, specifically the Court of First Instance. As per subclause 2 of Article 54 of the Labour Law, if the claimed value remains below (AED 50,000), the Ministry will furnish a conclusive resolution to the dispute. Conversely, when the dispute originates from the failure of either party to adhere to a previously issued amicable settlement decision by the Ministry, the Ministry will intervene and issue a final decision, irrespective of the claim’s value. 

The prevailing party, as determined by the Ministry’s decision, is entitled to initiate the execution process, a mechanism for enforcing the decision, in accordance with the execution rules outlined in the UAE Civil Procedure Law. 

Free Zone Companies

Notably, free zone companies and their employees follow a different procedure. While the obligation to submit an application to the Ministry does not apply, the aggrieved party must seek resolution from the free zone authority initially. However, even in free zone cases, the Ministry’s involvement is essential for obtaining a referral letter for court proceedings. 

Appealing the Ministry’s Decision

Either party has the right to initiate legal proceedings directly before the Court of Appeal within 15 working days of the Ministry’s decision notification. The Court of Appeal is mandated to schedule a hearing within three working days and deliver a final decision within 15 working days, providing a swift and conclusive resolution. 

Disputes Exceeding AED 50,000

In case if the involved parties be unable to reach an amicable settlement within the stipulated legal timeframe, and if the disputed claim exceeds AED 50,000, the Ministry will escalate the matter to the competent court, specifically the Court of First Instance. Accompanying this referral will be a memorandum containing a succinct overview of the dispute, the arguments presented by the parties, and the Ministry’s recommendations. The competent court is obligated to promptly schedule a hearing within three working days from the date of receiving the application from the aggrieved party and expeditiously reach a decision on the dispute. 

Ministry’s Authority and Preventive Measures

During a dispute, the Ministry has the authority to mandate the employer to continue salary payments for up to two months if the worker’s salary is withheld. Additionally, the Minister holds the discretion to impose administrative procedures on the establishment to prevent the escalation of collective labor disputes that could impact public interest. 

Procedural Adherence and Time Constraints

Emphasizing procedural adherence, the competent court will not entertain lawsuits that do not comply with the outlined procedures. Furthermore, any lawsuit pertaining to labor rights specified in the Decree-Law will not be considered if filed more than one year after the entitlement date. 

In conclusion, the amendments to the UAE Labour Law, particularly through Federal Decree-Law No. 20/2023, represent a paradigm shift in the landscape of labor relations. The proactive approach of the Ministry in dispute resolution, the comprehensive legal framework for free zone cases, and the emphasis on procedural adherence underscore the commitment to fairness and efficiency in the UAE’s evolving labor landscape. As these amendments come into effect, they aim to strike a delicate balance between the interests of employers and employees, ensuring a robust framework for labor relations in the UAE. 

Updates of November 2021

Employees in the private sector are protected by Federal Law No. 8 of 1980, as amended. It applies to all employees working in the UAE, whether they are UAE citizens or expats. Certain kinds of employees, however, are exempt from the amended law.

The UAE President, on 15th November 2021 has issued a new decree to regulate labour relations in the private sector, including part-time workers, temporary workers and flexible workers, along with safeguarding employee rights, introducing new leaves policy and 3 year contract. Also covers rights of freelancing, condensed working weeks, shared job models and self-employment.

3 Year Job Contract

The new law establishes one sort of contract, a limited (or fixed-term) contract that lasts no more than three years and can be renewed for a similar or shorter duration if both parties agree.

Judicial fee exemptions

Workers are excluded from judicial fees at all phases of litigation, enforcement, and petitions filed by workers or their heirs with a value of less than AED 100,000, according to the order. Employers are no longer allowed to seize employees’ official documentation under the new law. Workers should also not be pushed to leave the nation at the end of their employment contract. The legislation states that the employer is responsible for all recruitment and employment fees and expenses, and that the employee cannot recover them directly or indirectly.

Leaves in the private sector

Employees are entitled to one paid day off every week, with the possibility of expanding weekly rest days at the company’s discretion. In addition to the five-day parental leave and other leave days specified by the cabinet, they can get a variety of leave days, including bereavement leave that ranges from 3-5 days depending on the degree of connection of the deceased. Workers are entitled to a 10-day study leave per year after two years of employment with an employer if they are enrolled in a recognised university in the UAE.

Maternity leave in the private sector

In the private sector, maternity leave can last up to 60 days: 45 days at full pay, followed by 15 days at half pay. In the event of any post-partum difficulties or ailment in the newborn, new moms are eligible for an additional 45 days of unpaid leave once their initial maternity leave period has ended. To apply for sick leave, they will need to produce supporting documentation. After their original maternity leave term, new mothers of infants with exceptional needs are entitled to a 30-day paid leave, renewable for another 30 days without pay.

Flexible work week

If an individual is required to work 40 hours per week, he can now complete the 40 hours in three days.

Prohibition of discrimination, bullying by employers

Employees are now protected from sexual harassment, bullying, and the use of verbal, physical, or psychological abuse by their employers, superiors, or colleagues under the new law. Employers may not use force or threaten to penalise employees for refusing to execute an action or deliver a service. Discrimination on the grounds of race, colour, sex, religion, nationality, or handicap is likewise prohibited under the law.

No discrimination against working women

The revisions emphasise that all regulations governing worker employment must apply to working women without discrimination, with a focus on ensuring that women are paid equally to men when performing the same task or other obligations of similar value.

Employment of teenagers

Employers are prohibited from hiring juveniles under the age of 15. Teenagers should not be allowed to work more than six hours per day with a one-hour break, according to the new rule, and should only be allowed to work after receiving a written consent from a guardian and a medical fitness report. Teenagers are not permitted to work shifts from 7 p.m. to 7 a.m. or to engage in hazardous jobs that could cause harm to their physical health, morals, or well-being.

Working hours and overtime wage

Employees are not allowed to work for more than five hours in a row without taking a one-hour break under the new regulation. Workers are not permitted to work more than two hours of overtime in a single day. Employees must be paid an overtime wage equal to normal hour pay plus a 25% increase if the nature of the job requires more than two hours of overtime. Employees who are compelled to work overtime between the hours of 10 p.m. and 4 a.m. are entitled to an extra payment equal to normal hour pay plus a 50% increase. This restriction does not apply to people who work in shifts.

If employees are required to work on a day off, they are entitled to one day off or overtime pay equal to normal day pay plus a 50% increase.

Employees exempted from the amended law

As amended by Federal Law No. 24 of 1981 and Federal Law No. 12 of 1986, the provisions listed in the law do not apply to the following categories:

  • employees and workers of the federal government and the local governmental departments
  • employees and workers in public entities and institutions, whether federal or local, and employees and workers appointed for governmental, federal and local projects
  • members of armed forces, police and security
  • domestic servants in private households and similar occupations
  • workers in farms or pastures with the exception of persons working in agricultural institutions processing the products thereof or the persons permanently operating or repairing mechanical machines required for agriculture.

The new Labour Law regulates the controls and conditions for the private sector, including part-time workers, temporary workers, and flexible workers. The amendments also strengthen the controls for the employment of juveniles, maternity leaves, harassment at workplace and as well as with regards to the entitlements of the deceased worker, the requirements for occupational safety, and other controls that guarantee the rights of both parties in a balanced manner.

About ATB Legal

ATB Legal is a full-service legal consultancy in the UAE providing services in dispute resolution (DIFC Courts, ADGM Courts, mainland litigation management and Arbitrations), corporate and commercial matters, IP, business set up and UAE taxation. We also have a personal law department providing advice on marriage, divorce and wills & estate planning for expats. Please feel free to reach out to us at office@atblegal.com for a non-obligatory initial consultation.

by Reshma Rose Jacob

Reshma is a legal consultant at ATB Legal. She is a law graduate from St. Joseph’s College of Law, Bangalore, and is enrolled with the Bar Council of Kerala.

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