Understanding Labour Laws in the UAE: A Comprehensive Guide

April 18, 2024by ATB Research Team0

The UAE’s labour law landscape is characterized by a general federal framework applicable throughout the Emirates, alongside distinct legal systems in the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM). Each system has its own unique regulations and procedures. Here’s a deep dive into the employment regulations in each of these unique and mutually enriching jurisdictions. 

Navigating the complex landscape of labour laws in the UAE (United Arab Emirates) is crucial for businesses and workers alike. The UAE’s robust legal framework is designed to regulate employment relationships, enhance worker protections, and support the country’s dynamic economic environment. This guide provides a comprehensive overview of the main legal systems governing employment in the UAE: the UAE Federal Labour Laws, the Dubai International Financial Centre (DIFC) Labour Laws, and the Abu Dhabi Global Market (ADGM) Labour Laws. 

UAE Federal Labour Laws: Overview 

The foundation of employment law in the UAE is the Federal Labour Law, Federal Law No. 32 of 2021, (the “Law”) which has been amended several times to adapt to the country’s evolving economic landscape. This law outlines the essential conditions of employment, employee rights, and employer duties applicable throughout the seven emirates. 

The applicable legislation and subordinate executive regulations governing private sector labour and employment for onshore UAE are as follows:

  • Federal Decree Law No. (33) of 2021 regarding the Regulation of Labour Relations (Labour Law). This primary legislation repeals Federal Law (8) of 1980 and came into force on 2 February 2022.
  • Cabinet Resolution No. (1) of 2022 on the Executive Regulations of Federal Decree Law No. (33) of 2021 (Executive Regulations). This is subordinate legislation to the Labour Law.
  • Cabinet Decision No. (43) of 2018 on the Support of Employment of Persons with Disabilities. • Federal Decree Law No. (29) of 2021 regarding Entry and Residence of Foreigners (Foreigners Law). This repeals Federal Decree Law (6) of 1973 and came into force on 26 October 2021.
  • Federal Decree Law No. (30) of 2021 (the UAE Penal Code).
  • Federal Decree Law No. (47) of 2021 regarding Uniform General Rules of Work in the UAE (Uniform Work Rules) which came into force on 2 February 2022.

The UAE Onshore Legislation extends to all individuals officially authorized by the Ministry of Human Resources and Emiratisation (MoHRE) to work for a licensed organization within the UAE, including foreign nationals. However, certain exceptions apply, including individuals employed by companies registered in the Dubai International Financial Centre (DIFC) or the Abu Dhabi Global Market (ADGM), public officials, employees of governmental departments or those appointed for government projects, public sector employees, and domestic workers, security officers and agricultural employees.

Amendments to the Labour Laws in the UAE 

Explore the recent amendments to the labour laws in the UAE, which enhance worker protections and modernize employment practices to support the country’s economic growth.” 

Key Provisions of UAE Federal Labour Law 

Employment Contracts 

The law mandates that all employment contracts be documented in writing and specify certain details such as duration, compensation, and job description. Contracts are generally categorized into limited (fixed-term) and unlimited (open-ended) contracts. 

After the amendment of the Law in 2021, the employment contract shall be concluded for a fixed term that shall be renewable as agreed by the parties. The employee and the employer may agree to introduce new clauses to the approved contract forms, provided they agree with the provisions of the Law and its executive regulations.  

Wages and Compensation 

The UAE does not have a universal minimum wage; however, compensations must comply with standards set by the Ministry of Human Resources and Emiratisation (MOHRE). Regulations concerning overtime, bonuses, and other forms of compensation are strictly enforced. 

Working Hours and Leave 

Standard working hours are capped at eight hours per day or forty-eight hours per week. The law also provides for paid leave, including annual leave, maternity and paternity leave, sick leave, and public holidays. Leave policy is crucial for both employers and employees operating within the United Arab Emirates (UAE). The article Leave Policy in the UAE Labour Law delves into the diverse spectrum of leave options available under UAE labour laws.

Employee Rights and Welfare 

UAE law ensures the right to work in a safe and healthy environment, offering protections against discrimination and provisions to support disabled workers. 

Termination and End of Service 

The law outlines fair grounds for termination, notice periods required, and calculations for severance and end-of-service benefits. Learn about the alternative schemes available for end-of-service benefits in the UAE, offering flexibility and potentially enhanced benefits for both employers and employees. 

Compliance and Enforcement 

The MOHRE plays a pivotal role in enforcing labour laws, resolving disputes, and ensuring compliance. 

DIFC Labour Laws 

The DIFC is an autonomous jurisdiction within Dubai that operates under a unique legal framework derived from English common law. This financial hub has its own set of labour laws, which are designed to be progressive and attract international businesses. Get started with the essential guide to DIFC Employment Laws tailored specifically for businesses operating within the DIFC. 

Disputes within the DIFC are handled by the DIFC Courts, which provide a fast, transparent, and independent dispute resolution mechanism. Key provisions of the DIFC labour laws are discussed below. 

Employment Contracts in DIFC 

DIFC employment contracts offer flexibility and can include clauses not typically seen in federal contracts, such as non-compete clauses and confidentiality agreements. 

Wages and Compensation in DIFC 

Employers in the DIFC often offer competitive compensation packages, including pension plans for expatriates, which are not mandated under federal law. 

Working Hours, Leave, and Holidays in DIFC 

The DIFC provides enhanced leave entitlements such as paternity leave and compassionate leave, which are not covered under federal laws. 

Employee Rights and Protections in DIFC 

The DIFC is known for its strong anti-discrimination laws and enhanced protections for employees, setting a benchmark for employment standards in the region. 

End of Service Gratuity for DIFC Employees: A Comprehensive Guide 

Delve into our comprehensive guide on End of Service Gratuity for DIFC employees, outlining everything employers and employees need to know. 

DIFC Employment Law: Employers and Employees of DIFC 

In this detailed analysis, understand the rights and responsibilities of employers and employees under the DIFC Employment Law. 

DIFC Employment Law: Salient Features and Key Changes 

Explore the salient features and the key changes recently introduced in DIFC Employment Law, impacting how businesses and employees interact. 

ADGM Labour Laws 

Similar to the DIFC, the ADGM is a financial free zone in Abu Dhabi with its own legal system based on English common law, tailored to foster an environment conducive to business and financial services. Gain a quick but thorough understanding of the ADGM Employment Regulations. This overview covers the key aspects that businesses and employees need to know.  

The ADGM Courts handle labour disputes, providing efficient and effective legal recourse for employees and employers alike. Key provisions of ADGM labour laws are discussed below. 

Employment Contracts in ADGM 

ADGM regulations allow for greater use of electronic contracts and digital signatures, facilitating modern business practices. Discover the specific requirements for contracts and offer letters within ADGM, ensuring legal compliance from the start of the employment relationship. 

Wages and Compensation in ADGM 

Similar to the DIFC, the ADGM offers attractive compensation packages, including pension schemes for expatriates. Explore how ADGM labour laws protect employee wages, detailing the mechanisms in place to ensure fair compensation and timely payment. 

Working Hours, Leave, and Holidays in ADGM 

ADGM laws provide flexible working arrangements and generous leave policies, aligning with global best practices. Learn about the regulations concerning working hours in ADGM, including standard hours, overtime provisions, and flexibility options. 

Employee Rights and Protections in ADGM 

The rights and protections under ADGM’s regulations are comprehensive, ensuring a balanced and fair working environment. Understand the comprehensive obligations of employers in ADGM, from workplace safety to the equitable treatment of employees. 

Employee Obligations in ADGM 

Review the key obligations of employees under ADGM regulations, which ensure a professional and compliant work environment. 

Hiring in the ADGM 

Get detailed guidance on the hiring process within ADGM, including best practices and legal considerations for successfully recruiting top talent. 

Document Requirements in ADGM for Employers 

Identify the critical documentation requirements for employers in ADGM, essential for compliance and smooth business operations. 

Employment Visas and Work Permits in ADGM 

Navigate the specifics of obtaining employment visas and work permits in ADGM, critical for employing international talent. 

Leave Requirements in ADGM 

Examine the leave entitlements in ADGM, covering annual leave, maternity and paternity leave, and other types of leave benefits. 

Termination of Employment in ADGM 

Explore the proper procedures and legal frameworks for terminating employment in ADGM, including rights and responsibilities of both parties involved.

Federal, DIFC, ADGM Labour Laws: Unique and Mutually Enriching 

Understanding the nuances of UAE’s diverse labour law landscape is essential for anyone operating within its borders. This guide serves as a starting point for employers and employees to navigate the legal complexities, whether under the federal system, DIFC, or ADGM. Each jurisdiction offers unique advantages and protections, underscoring the UAE’s commitment to maintaining a robust, fair, and competitive labour market. 

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.

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