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Employment Law in the United Arab Emirates

Overview

The United Arab Emirates (UAE) is a federation of seven states — Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah, Ajman, Umm Al Quwain and Fujairah. Employment is a matter for regulation at federal level, and the principal item of legislation is the Labour Law (Federal Law No. 8 on the Organisation of Labour Relations), accompanied by a range of Ministerial Decrees and Resolutions. The Labour Law generally applies to employment relationships throughout the UAE, excluding the public sector, domestic servants and many agricultural workers, though the situation is complicated by the existence within the federation of around 35 “free zones”. These are areas where companies can operate under specific rules on matters including foreign ownership, taxation, repatriation of profits/capital and, in some cases, employment. Free zones are established by individual emirates, with Dubai especially active in this respect.

Two free zones, Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC), have entirely distinct legal systems (based on the common law) and their own employment legislation (replacing the UAE Labour Law) — specifically the ADGM Employment Regulations and DIFC Employment Law. The other free zones are broadly covered by the provisions of the UAE Labour Law. However, in some cases the rules and regulations governing these zones contain provisions on employment that differ to some extent from the Labour Law. The main areas of difference relate to the employment of foreign and UAE nationals, payment of wages, health and safety, and termination of contract.

In this article, we provide information on the employment legislation applicable to the UAE as a whole, and briefly note areas where the rules in free zones (except ADGM and DIFC) differ from these general provisions, referring mainly to the examples of Abu Dhabi Media Zone (ADMZ), Dubai Airport Free Zone (DAFZ), Dubai Healthcare City (DHCC), Dubai Multi Commodities Centre (DMCC), Dubai Silicon Oasis (DSO), Jebel Ali Free Zone (JAFZ) and Ras Al Khaimah Economic Zone (RAKEZ). As ADGM and DIFC have their own separate employment laws, we summarise their provisions in a table at the end of each section.

Only around 20% of the population of the UAE consists of UAE nationals, with the rest made up of migrants/expatriates, and the proportion of UAE nationals in the private sector workforce is very low (often estimated at under 1%). In this context, a range of “Emiratisation” statutes and programmes seeks to increase employment levels among UAE nationals, for example by giving them priority in recruitment and special protection against dismissal. These are not generally applicable in the free zones.

This topic refers only to the private sector.

Temporary COVID-19 Crisis Measures (as at 5 June 2020)

During the Covid-19 pandemic, the federal Government has taken a number of temporary employment-related measures. It has required private sector employers, except in certain key sectors, to limit the number of employees physically attending work to a minimum, and no more than 30% of the workforce. Other employees are generally expected to work remotely and the Government has stipulated the obligations of employers and employees in respect of such remote working. In order to protect jobs and businesses, employers can, with employees’ agreement, temporarily cut their pay (any permanent cut requires the approval of the public employment authorities) or place them on unpaid leave. In the case of expatriate employees, under a temporary “early leave scheme” they may return to their home country (at the employer’s expense) during unpaid leave and return to their jobs afterwards. Various measures have been taken to assist non-UAE nationals who lose their job because of the crisis.

Employment Law in the United Arab Emirates: Quick Facts

  • Recruitment and selection are generally subject to little statutory regulation, except for measures that promote or require the employment of UAE nationals. Recruitment and Selection

  • Probationary periods, during which the employer may terminate the employment contract without notice, may last up to six months. Recruitment and Selection

  • An employment contract is defined as an agreement between an employer and a worker, whereby the latter commits to working for, and under the management and supervision of, the former in return for a wage. Employment Contracts

  • All workers must have a standard-format written employment contract, containing specified minimum information, which must be registered with the Ministry of Human Resources and Emiratisation. Employment Contracts

  • The maximum duration of a fixed-term contract is two years, renewable for one or more equal or shorter terms. Employment Contracts

  • Employers must generally pay employees once a month or once a fortnight depending on how their wages are calculated by bank deposit, using a government-run electronic Wage Protection System, and must observe rules on deductions from pay. There is no statutory minimum wage. Pay and Benefits

  • Workers’ normal working time must not generally exceed eight hours per day, six hours during Ramadan and 48 hours per week, and overtime above these limits entitles a worker to a pay supplement of 25%, or 50% for overtime between 9pm and 4am. Working Time, Rest and Holidays

  • Workers are generally entitled to a one-hour break after five hours’ work and to a weekly rest day, usually on Fridays. Working Time, Rest and Holidays

  • Workers are entitled to 30 calendar days of paid annual leave after they have completed one year’s service. Working Time, Rest and Holidays

  • Pregnant workers are entitled to 45 days of maternity leave on full pay, or half pay if they have less than one year’s service. An employer must not dismiss a pregnant employee. Parenthood and Work-life Balance

  • During their period of employment with an employer, workers are entitled on one occasion to take up to 30 days’ unpaid leave to undertake the Hajj pilgrimage. Parenthood and Work-life Balance

  • Workers are generally entitled to up to 90 calendar days of sick leave each year, with the first 45 days full or partly paid. Parenthood and Work-life Balance

  • There is a general, non-specific ban on any discrimination that prejudices equal opportunity employment, equal access to jobs, equal continuity of employment or equal enjoyment of rights, and on discrimination between employees with the same work duties. Disability is the only grounds on which discrimination is specifically prohibited. Equality and Discrimination

  • Female workers must be paid a wage equal to that of any men performing the same work. Equality and Discrimination

  • Trade unions and strikes are illegal and collective bargaining non-existent. Industrial Relations and Collective Rights

  • Employers must provide workers with adequate means of protection against hazards of occupational injury and disease that may occur during work. They also have a range of specific obligations in this area. Occupational Health and Safety

  • In principle, an employer may dismiss a worker at any time by giving the required notice, and may also dismiss a worker without notice on certain misconduct-related grounds. However, if the employer dismisses a worker with notice for “arbitrary” reasons, the worker may claim compensation, and special protection applies to UAE nationals. Termination of Employment