The labour law revisions are intended to improve employment conditions, protect labour rights and promote the UAE’s competitiveness as a hub to live and work, assisting the region in attracting and retaining world-class talent. Family leave entitlements, discrimination laws, termination of employment, and ‘non-competition’ provisions in employment contracts have all gone through significant modifications. The Federal Decree-Law No. 33 of 2021 or commonly known as New Labour Laws of the UAE on the regulation of labour relations in the private sector went into effect on February 2, 2022. The new law also allows firms to implement part-time and flexible employment arrangements.

These revisions were first proposed by the government in November of 2021 and have necessitated updates to current employment contracts as well as changes to rules and procedures pertaining to future agreements with new employees. The UAE government intends to release executive rules to give more guidance on the new legislation. Significant amounts of changes have been introduced that improve employees’ rights. Shorter, fixed-term contracts for most private-sector employees, the opportunity to stay in the country for 180 days after quitting your job, and the introduction of job shares, which may fit students and individuals returning to work and changes to maternity leaves, are among the major reforms. If you are thinking about applying for a job in the UAE, a major part of the laws that you need to focus on is the Probationary Laws.

5 Major Changes introduced in the labour laws in the UAE

1. Fixed-Term Contract

This is the most significant reform, requiring firms to revise existing employment contracts (to the extent that they are not already fixed term). Employers are required to place all employees on fixed-term contracts with a maximum period of three years. If agreed upon, contract terms can be shortened. Employers may enter into an unlimited number of fixed-term contracts in a row. Employers have until February 2023 to transition all staff to fixed-term contracts.

2. Probationary Period

Under the new labour legislation, the maximum probationary term stays at six months. However, the new law imposes specific notification obligations throughout the probation period. Employers must now offer a minimum of fourteen days written notice of their intention to terminate an employee’s employment contract if the employee is on probation.

3. Flexible Working Environments

The law defines three different categories of Flexible Work. We have already gone through them in a previous blog. They are Part-Time, Temporary and Flexible Work. According to  Dr Abdulrahman Al Awar, the Director-General at the Federal Authority of Government Human Resources, “In the condensed-hours model, if an employee works 40 hours a week as per the contract, he can now perform the 40 hours in three days,”. It provides for a more flexible workweek in which workers may work as many hours as they need to suit their demands rather than having to commit to full-time employment.

4. Contract Termination

The minimum notice time for terminating an employment contract is still thirty days, but the maximum notice period is now ninety days. The new labour legislation also mandates minimum notice periods for terminating existing unlimited-term contracts before the implementation of new fixed-term contracts. In this case, the employer must provide at least thirty days’ notice if the employee has been with the company for less than five years; sixty days’ notice if the employee has been with the company for more than five years but less than ten years; and ninety days’ notice if the employee has been with the company for more than ten years.

5.  End of Service Gratuity

Previously, an end-of-service gratuity (EOSG) for a resigning employee was reduced based on how long the employee had been employed, i.e., no EOSG if the employee had not completed at least one year of service; one-third EOSG if the employee had completed up to three years’ service; two-thirds EOSG if the employee had between three and five years’ service; and 100% EOSG if the employee had completed more than five. Employees who have served at least one year will be eligible for full EOSG when they retire under the new law. Furthermore, employees must be paid their EOSGs within fourteen days of their termination date. There was no officially specified deadline before.

Rules And Regulations under the UAE Labour Law concerning Probation Period

The Probationary Term is arguably the most crucial aspect of starting a career in the UAE. You must go through a mandated probation term when starting a new job in the UAE. It may last anywhere from three to six months, depending on the company’s regulations. The purpose of a probation term in the UAE is to evaluate an employee’s performance over the first few months before providing them with a permanent position. During the probation term, the employee is subjected to a detailed examination and performance review. Once the evaluation is completed, the business will recruit the individual as a permanent employee if they are found appropriate for the role and the probation period will be counted as part of the complete term of service.

I.  Termination of Employment during the Probationary Period

According to the requirements of the UAE Labour Law, the employer may dismiss you by notifying you in writing 14 days before the date specified for termination. If you underperform during your probation period, your employer has the authority to terminate your employment contract by delivering the same number of (14 days) written notice before the contract’s end date, and you will not be entitled to severance pay or other compensation and benefits.

The employee also possesses the right to resign from the job while on probation. There are two scenarios in this case. One, the employee wishes to join another company in the country. In this case, the employee has to mandatorily serve a notice period of 30 days in writing. The new employer shall compensate the original employer for the costs of recruitment or contracting with the employee unless otherwise agreed upon. Two, the employee wishes to leave the country for whatever reason. In this case, the employee has to mandatorily serve a minimum of 14 days notice period before the date of termination. In case, the employee wishes to return to the country to join another company within three months of the departure, the new employer must compensate the costs of recruitment incurred to the original employer, unless agreed upon to the contrary between the employee and the original employer.

II.  Extension of Probationary Period

Your employer cannot extend your probation term for more than six months. Any probation period extension that exceeds six months is illegal. Furthermore, the same company cannot place you on probation more than once. The company has either to hire you as a regular employee or fire you at the end of your probation period. Six months is ample time for a corporation to evaluate its personnel, and by the conclusion of that time, the employer must make a choice. The law defines and restricts the probationary period to a maximum of 6 months.

III.  No Entitlement to Sick Leaves

In the UAE, an employee is not permitted to take paid sick leave while on probation. If a scenario occurs that necessitates you to take time off while on probation, the issue must be discussed with your employer. You may take leave with the approval of the manager and it will be considered unpaid leave.

Final Thoughts

The new labour laws emphasise and underline the protection of anybody in the workplace, particularly employees. It makes it illegal to discriminate based on race, colour, gender, religion, nationality, social background, or handicap. The laws will also introduce minimum wage policies in the UAE, which is the first of its kind in the country. Furthermore, employees are not required to perform more than two hours of overtime every day. Furthermore, if their employment necessitates them, they must be paid 25% more than their usual hourly wage. In addition, the laws prohibit employers from withholding employee documentation, such as passports, or charging workers recruiting costs. Most labourers and employees are unaware of these regulations and have to be made aware, only then will these laws will have any effect.