Two key employment law deadlines are looming for UAE companies, with the first in just over a week.
According to the latest labour law, all employers must transfer contracts by Wednesday, February 1, unless they are in The Abu Dhabi Global Market and Dubai International Financial free zones.
Families employing domestic workers are also exempt from the changes.
Businesses that fail to update employment contracts risk a fine or penalty — although authorities have yet to reveal what the penalty will be.
With the lifting of the cap of three years for a limited-term contract, this arrangement more closely reflects an unlimited-term employment contract than a true fixed-term employment contract
Shiraz Sethi, Dentons
The legislation may not affect your day-to-day employment,but it is part of a bigger overhaul of the private sector work landscape and a law first brought in in 1980.
The change will allow firms and staff to agree on part-time work, job-sharing and project-based tasks with more ease.
A federal decree issued in October removed a planned three-year cap on contracts, so it is up to employers to agree a term with the employee. Companies that already updated contracts, after the original decision last February but before the decree in October, may need to do so again.
Shiraz Sethi, a lawyer in Dubai who specialises in UAE labour law, said only time would show how the new rule affects the labour market.
"It is of paramount importance that employers in the private sector are advised to review and amend employment contracts if they are currently on an unlimited time frame by February 1, 2023 to avoid possible fines or sanctions," said Mr Sethi, regional head of employment at Dentons.
"With the lifting of the cap of three years for a limited-term contract, this arrangement more closely reflects an unlimited-term employment contract than a true fixed-term employment contract.
"Only time will tell how this new requirement will play out in practice and how it will impact the labour market in the UAE."
The way private sector businesses operate will change to accommodate more flexible working and job-sharing.
Most of those in the private sector will work shorter, fixed-term contracts and be allowed to stay in the country for up to 180 days after leaving a job, under rules introduced last February.
In an update issued in October, the government lifted a three-year cap on the duration of fixed-term employment contracts in the private sector.
Under the new amendments, employment contracts must cover a defined term but the law will no longer set a cap on how long the contract can be.
search icon
HOME
UAE
GULF
MENA
WORLD
BUSINESS
OPINION
CLIMATE
HEALTH
LIFESTYLE
ARTS & CULTURE
TRAVEL
SPORT
WEEKEND
PODCASTS
SIGN UP
alert bell icon
Deadline nears for UAE employment contract changes
Employers must switch workers on to limited-term contracts by February 1
Employment contract changes will affect most workers in the Emirates. Amr Alfiky / Reuters
Caption
Nick Webster | Sarwat Nasir
Jan 23, 2023
Listen In English
Listen in Arabic
Beta V.1.0 - Powered by automated translation
Twitter logoFacebook logoLinkedin logoWhatsApp logoEmail logo
Two key employment law deadlines are looming for UAE companies, with the first in just over a week.
According to the latest labour law, all employers must transfer contracts by Wednesday, February 1, unless they are in The Abu Dhabi Global Market and Dubai International Financial free zones.
Families employing domestic workers are also exempt from the changes.
Businesses that fail to update employment contracts risk a fine or penalty — although authorities have yet to reveal what the penalty will be.
With the lifting of the cap of three years for a limited-term contract, this arrangement more closely reflects an unlimited-term employment contract than a true fixed-term employment contract
Shiraz Sethi, Dentons
The legislation may not affect your day-to-day employment,but it is part of a bigger overhaul of the private sector work landscape and a law first brought in in 1980.
ADVERTISING
The change will allow firms and staff to agree on part-time work, job-sharing and project-based tasks with more ease.
A federal decree issued in October removed a planned three-year cap on contracts, so it is up to employers to agree a term with the employee. Companies that already updated contracts, after the original decision last February but before the decree in October, may need to do so again.
Shiraz Sethi, a lawyer in Dubai who specialises in UAE labour law, said only time would show how the new rule affects the labour market.
"It is of paramount importance that employers in the private sector are advised to review and amend employment contracts if they are currently on an unlimited time frame by February 1, 2023 to avoid possible fines or sanctions," said Mr Sethi, regional head of employment at Dentons.
UAE salaries at a glance - in pictures
TEACHER/LECTURER: The average salary in UAE is Dh9,000 with lows of Dh4,000 and highs of Dh21,000. Headteachers earn an average of Dh46,000 with highs of Dh75,000. University staff are typically well paid, with assistant professors and full lecturers earning between Dh20,000 and Dh40,000. AFP
TEACHER/LECTURER: The average salary in UAE is Dh9,000 with lows of Dh4,000 and highs of Dh21,000. Headteachers earn an average of Dh46,000 with highs of Dh75,000. University staff are typically well paid, with assistant professors and full lecturers earning between Dh20,000 and Dh40,000. AFP
"With the lifting of the cap of three years for a limited-term contract, this arrangement more closely reflects an unlimited-term employment contract than a true fixed-term employment contract.
"Only time will tell how this new requirement will play out in practice and how it will impact the labour market in the UAE."
The way private sector businesses operate will change to accommodate more flexible working and job-sharing.
Most of those in the private sector will work shorter, fixed-term contracts and be allowed to stay in the country for up to 180 days after leaving a job, under rules introduced last February.
In an update issued in October, the government lifted a three-year cap on the duration of fixed-term employment contracts in the private sector.
Under the new amendments, employment contracts must cover a defined term but the law will no longer set a cap on how long the contract can be.
READ MORE
UAE's new labour law explained: all you need to know about the 2022 changes
Students and those returning to the workplace after a period away are most likely to benefit from more flexible working arrangements.
It will allow people to work for more than one employer for a specified number of working hours or days and also work on a temporary basis to complete a set contract.
A reminder was issued to employers, advising them to review their employment contracts and amend them where applicable to avoid fines or sanctions.
Unemployment insurance
The deadline for residents in the UAE to register for the unemployment insurance is also approaching.
All employees working for a company subject to the Ministry of Human Resources and Emiratisation must register by June 30.
The insurance scheme came into effect from January 1.
It will cost workers only Dh5 to Dh10 per month. If they lost their job, they could receive thousands of dirhams per month for three months to tide them over.
"Whilst employers are not obligated to register for their employees, they are able to if they would like to offer this as an additional benefit to their staff," said Mr Sethi.
"Employers should, however, continue to remind their employees of the need to register and encourage them to do so within the deadlines provided, otherwise face fines and penalties once the deadline has lapsed, similar to fines having already been issued to some companies who have failed to meet their Emiratisation quotas."
The social security support programme is a welcome financial safety net that will pay Emiratis and residents a cash sum for three months if they lose their jobs.
The system will ensure the sustainability of a decent life for Emiratis and residents during their unemployment period and will redu
)
