Main Points of New UAE Labour Law

The Ministry of the Labour of the U.A.E. has introduced new Labour Law by the Ministerial Decrees of 764, 765, and 766.
This new Law regulation has been introduced to pave the way for a better industrial harmony between the workers and employers.
The new Law came into effect from 1st January 2016 and do not cover the domestic workers (Domestic helpers such as House-maids, House boys, Nannies, Baby Sitters, House Cooks, House Drivers etc) work force in the U.A.E. They will be continued to be governed by the immigration rules and regulation.

Ministerial Decree 764 OF 2015

• Under Decree 764, the ministry has provided a standard employment contract.
• The terms of the offer cannot be altered or substituted without the approval of the Labour Ministry.
• The important fact is, that no clauses can be added to any contract unless approved by the Labour Ministry.
• Further the Decree deals on filing the offer for eventual capture as a legal contract, termination clauses, employer’s commitment etc.

Ministerial Decree 765 of 2015

• The Decree mainly deals on rules and conditions for the termination of a contract.
• Subjected to a due process, any contract can be terminated by either party.
• A fixed term contract shall be terminated under the following condition.
  • If the terms of the contract expires.
  • On mutual consent by both parties.
  • If either parties act unilaterally to terminate or renew the contract in terms of clause four of the article.

Claus four of the article : Decree 765

Either party acts unilaterally to terminate a renewed term contract, whether renewal has occurred before or after this decree enters into effect, provided the terminating party complies with the following legal steps

• Notify the other party in writing of its intent to terminate the contract in accordance with the notice period to be agreed to by the two parties not to be less than one month and not to exceed three months. If renewal occurred before this decree enters into effect and the parties had not agreed to a notice period this notice period
  Shall be three months.
• Continue to honor his/her contractual obligations for the duration of the notice period
• Indemnify the other party to the level that was agreed to by both parties not to exceed the equivalent of three months of gross wages. If renewal occurred before this decree enters in to effect and the parties had not agreed to the amount of indemnification this indemnification shall be the equivalent of three months of gross wages.
• If worker commits violation, describe in article 120 of Federal Labour Law

Termination of Unlimited Contract

• Termination of unlimited contract can be done with both parties consent.
• If one party gives notice of termination at least one month notice in advance and not exceeding three months.
• If one party unilaterally act to terminate but bears consequences of early terminations.
• If an employee violates the Labour Law under article 120 of Federal Labour Law.

Further the contract is considered to be terminated in the event of

• The employer does not meet the contractual obligation to the worker.
• If an employer cease to empower workers to perform duties without complying with due process.
• If the worker abscond without complying with due termination procedure.

Ministerial Decree 766 of 2015

• The Decree has introduced rules and conditions for granting a permit to a worker for employment by new employers.
• Notably it is ascertained that the power of determine the status of a worker whose employment has ended is a public authority.
• As per article 01 of the decree, the new employer must meet the set of new rules and conditions for granting a permit to a worker .
• For both, term and non-term contract, a new permit may be granted upon termination of the workers employment when the term of the contract has expired.
• Further a new permit can be granted when the worker and employer mutually consent to terminating the contract during the term, provided that the worker has complete at least six month of employment or if the worker qualifies for a set of skills classified by the Ministry.
  A new permit can also be issued for a worker who has been terminated by the employer without providing reasons the worker has completed six month.
• Six month rule is waived off ,if the worker skill levels classified by the Ministry (i.e. University degree/Post secondary diploma etc )
  • Term contract can be terminated within a notice period between 1 -3 month.
  • If the terminating party continues to honor contractual obligations for the term duration.
  • If the terminating party indemnifies the other party without exceeding the three month gross salary.
  • If the employer has failed to meet the legal and contractual obligation, worker may granted a work permit.
  • Worker may be granted a permit ,if the Labour Ministry confirms that the employer has not provided work due to the firm being inactive for more than two months and if the worker report to the ministry the company shut down.
  • Work permit may also be issued incase where a labour complaint is referred by the Ministry to the Labour court for an early termination of a worker, provided the final ruling is in favor ,the worker in question owes not less than two months of wages.

The Standard Employment Contract

• Standard Employment contract has come in to effect on 01.01.2016
• According to the new regulation, a worker must be presented with a standardized contract prior to the entry in to U.A.E.
• Worker and employer must sign the contract at the Labour Ministry.
• Duration of the limited term Employment contract may not exceed two years.
• All expenses related to employment must be born by the employee.

Employers Obligation

• Clause nine of the contract indicates, that a worker has a labour card and authenticated contract in language the worker may understand.
• Deduction cannot be made from remuneration except under stipulated conditions.
• In the contract, working hours, public holidays, O.T., compensation ,are detailed.
• Employers are obliged to provide all occupational health and safety measures.
• The employer cannot terminate an employee due to medical reason, in which case the worker is entitled to a sick leave.
• In case of a work related injuries or occupational diseases, the employer is required shoulder the medical expenses in a Government medical centre.
• If work related injuries prevent an employee from working, the salary should be paid through out the treatment period, or for six month period which ever comes first.

Employees Obligations

• The employee must report to the Ministry if he is unemployed in U.A.E. for more than three month.
• The Ministry may refrain from granting work permits for those who do not abide by the termination procedures in terms of the contract.
• The worker has also the right to retain possession of passport.

Click edit button to change this text.