New UAE Labour Law on Probation Period, Contract and Equality
We will take a look at some of the key changes that were introduced by the new Federal Labor Law No. 33 of 2021 (New Law), which repeals Federal Labor Law No. 8 of 1980. The New Law came into effect on 2 February 2022.
DISCLAIMER: The information relayed below is based on the provisions of the Federal Decree-Law no. 33 of 2021. However, there might be certain subjects that still await further clarity on the law.
Equal Pay for Men and Women
In addition, the amendments in the new UAE Labor law accentuates the equal pay provision for men and women as defined under the old law. The recent changes stress that all provisions governing the employment of workers shall apply to working women in the UAE, without any discrimination or violation of the prescribed rights of working women.
The new UAE labor law also grants women the same wage as men if they are doing the same work or work of equal value, as established by the Council of Members.
Probationary Period
The maximum probationary period under the new labour law remains unchanged at six months. The new law does, however, introduce certain notification requirements during the probation period. Specifically, if an employee is on probation, employers must now provide a minimum of 14 days written notice of the intention to terminate the employment contract.
If an employee decides to resign during the probationary period, the employee must:
- give one month’s notice if resigning to join another employer in the UAE; or
- give 14 days’ notice if the employee plans to leave the UAE.
Three Year Fixed Term Contracts
Current Law:
Two forms of contract existed:
- Unlimited term contracts, which continue in full force and effect unless and until terminated; and
- Fixed-term contracts terminate at the end of the agreed term unless renewed by the parties.
New Law:
All employees will be required to enter into fixed-term employment contracts for a maximum period of three (3) years. On the expiry of the term, the employment contract can be renewed or extended for similar or shorter periods (on multiple occasions). If the contract is neither renewed nor extended, but the parties continue to operate as though the contract is still in effect, the contract is deemed as renewed on the same terms and conditions as were set out in the most recent version. Any extension or renewal will automatically count towards an employee’s continuous service (for the purposes of end of service gratuity or otherwise).
For employees currently on unlimited term contracts, the provisions of the New Law will automatically apply following the Effective Date. Employers are required to convert existing unlimited term contracts into fixed-term contracts within one year from the Effective Date (i.e. by 1 February 2023).
Where employees are currently employed under an unlimited term contract, either party may terminate the contract for legitimate reasons
Mored details can be found on MOHRE website: https://www.mohre.gov.ae/en/media-centre/news/1/2/2022/the-new-labour-law-will-come-into-force-as-of-tomorrow.aspx
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