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The United Arab Emirates (UAE), known for its peaceful and prosperous society, is widely regarded as one of the
world’s top places to work. With its tax-free salary, exceptional standard of living, cultural richness, ample job prospects, inclusive atmosphere, and top-notch quality of life, the UAE has long been a sought-after destination for job seekers across the globe.
Employment Contracts: Employers should have written employment contracts in Arabic that clearly outline the terms and conditions of employment, including job responsibilities, salary, working hours, leave entitlements, and terminationprocedures.
Unlimited term contracts — An unlimited term contract is open-ended, more flexible, and commonly used in the UAE. It can be terminated with mutual consent or by giving a notice of 1 to 3 months. The parties involved must honor their obligations throughout the notice period.
Limited-term (fixed-term) contracts — In general, limited-term contracts mention the start and end dates of an employment period. Unless the contract is renewed, it is automatically cancelled when it expires.
Limited-term contracts are adopted when an employer needs employees to engage in specific projects or specific duration. According to recent reforms in the UAE’s labor market, limited-term contracts are for a maximum duration of 2 years. The contract must also include a termination notice.
Part-time contracts — These types of contracts are limited only to skilled workers, namely holders of universityor higher degrees and those who have completed two or three years diploma in any technical or scientific field. Under this new system, part-time contract employees can take several part-time jobs without the approval oftheir original or other secondary employers; however, they are obligated to take a permit from the MOHRE.
The part-time contract is subject to the same rules and penalties applicable to the regular employmentcontracts common in the UAE, whether limited or unlimited.
United Arab Emirates does not have a minimum wage.
Pay rates must be agreed upon directly with the employer through collectivebargaining or other means of negotiating a fair living wage.
Although there is no minimum salary in United Arab Emirates, people cannot accept a labor salary lower than the following:
People with university degrees have to earn a minimum of 12,000 AED per month. Skilled workers have to earn a minimum of AED 5,000 per month.
Qualified technicians have to earn a minimum of 7,000 AED per month.
The UAE Labor Law identifies the normal working hours for the private sector as 8 hours per day, or 48 hours per week. During the holy month of Ramadan, working hours are reduced to 6 hours per day. The daily working hours may increase or decrease for certain economic sectors or certain categories of workers, as specified by the
‘Executive Regulations of the Labor Law’. The time spent by the worker in commuting from his place of residence tohis workplace is not included in the working hours, except for certain categories of workers as specified by the
‘Executive Regulations of the Labor Law’. If the worker works for more than one employer, the original employerand other employers may not require the worker to work more than the hours agreed upon in the employment contract, unless the worker agrees to do so in writing.
If the worker requests to perform his work remotely, either from within the UAE or from abroad, the employer must stipulate specific working hours. The worker has the right tohave one or more breaks if he works five consecutive hours. These breaks must not be less than one hour. Breaks are not calculated within the working hours.
The employer may ask the worker to work overtime, provided the number of extra hours does not exceed two hours in one day. If the nature of the work requires the worker to work beyond the normal working hours, then he will be entitled to a pay equal to normal working hours’ remuneration (which is based on basic salary) plus 25 per cent of thatpay. It could increase to 50 per cent if overtime is done between 10 pm and 4 am. This rule does not apply on workerswho work on basis of shifts.
If the circumstances require the worker to work on his off day, as specified in the labor contract, or work regulations,then the worker will be entitled to a substitute rest day, or to a pay equal to normal working hours’ remuneration (which is based on basic salary) plus 50 per cent of that pay.
Overtime work should be compensated at a rate of at least 125% of the regular hourly wage.
However, certaincategories of employees, such as managerial and supervisory staff, are exempt from overtime pay.
As per Article 21 of the UAE labor Law, employees of the private sector are entitled to at least, one day of paid rest per week as specified in the employment contract or work regulations of the company. The company may increase thenumber of weekly rest days. Additionally, employees are entitled to a paid leave on public holidays.
Annual leaves are granted in accordance with the Federal Decree Law No. 33 of 2021 on the Regulation of Labor Relations in the Private Sector, the ‘UAE Labor Law’.
Employees are entitled to a fully paid annual leave of:
30 days, if they have completed one year of service and 2 days per month, if they have completed six months of service, but not one year. Note that if the employee’s service is ended before he used his annual leave balance, he willget leave for the fraction of the last year of service.
Part-time employees are entitled to annual leave according to the actual working hours they spent at work, as specified in the employment contract, and in accordance with the ‘Executive Regulations of the Labor Law’.
Rules regarding using annual leaves:
Employees must use their leaves in the year of entitlement. The employer may, in agreement with the employee set the dates of leave according to the work requirements. Employer must notify the employee of the date of the leave atleast one month in advance.
The employee may, with the consent of the employer, and in accordance with company’s regulations, carry over hisannual leave balance to the next year. In this case, the employee will be entitled to be paid for the days he/she worked during the annual leave. The payment is calculated according to the basic salary.
The employer may not prevent the employee from using his accrued annual leave for more than two
years. Ontermination of employment, any accrued leaves will be calculated on basic salary only.
The calculation of the duration of annual leave will include official holidays specified by law or by agreement, and any other leaves caused by sickness if they fall within the annual leave unless the employment contract or the company’sregulations have other provisions.
Unpaid leave
The worker may, after the consent of the employer, take an unpaid leave. Such leaves are not included in the periodof service that is calculated for the employee, to determine his or her end-of-service benefits.
A female worker is entitled to a maternity leave of 60 days, out of which:
✓ 45 days will be fully paid leave ✓ 15 days will be half-paid leave.
A female worker may apply for her maternity leave up to 30 days prior to the expected date of delivery.
In addition to the basic maternity leave above, she may take additional 45 without pay if she has an illness as a result of pregnancy or childbirth and is unable to resume work. The illness must be proved via a medical certificate issued from the respective medical authority. These leave days can be consecutive or intermittent.
If the baby is sick or suffers from a disability, the female worker may take additional leaves of 30 days fully paid. This leave can be extended for additional 30 days without pay. The illness or the disability of the child must be proved via a medical certificate issued from the respective medical authority.
After the female worker resumes work, she is entitled to one or two additional breaks each day for nursing her child. The duration of the two breaks must not exceed one hour. The woman is entitled to such breaks for 6 monthsfollowing the date of delivery. Such breaks are fully paid for.
Parental leave
Employees of the private sector are entitled to a parental leave of 5 working days from the day of the birth of theirchild to six months. The parental leave is a paid leave that can be applied for by both mother and father of the baby.
Paternity leave
Fathers in the UAE are entitled to five working days of paternity leave with full pay, which they can choose to takeconsecutively or at any time during the first six months after the birth of the child.
An employee is entitled to a sick leave of not more than 90 days per year, only after the end of probationary period.The 90 days’ sick leave can be continuous or intermittent, and the salary is paid as follows:
✓ full pay for the first 15 days ✓ half pay for the next 30 days ✓ no pay for the rest 45 days.
However, during the probationary period, the employee may get a sick leave without pay, subject to the approval of the employer and based on a medical report issued by the medical entity that stipulates the necessity of the leave.
On the other hand, the employee is ineligible for a paid sick leave in the following situations:
— during the probation period
— if the illness directly arises from the misconduct of the worker, such as the consumption of
alcohol or drugs
— if the worker violated the safety instructions in accordance with the effective legislations in the
UAE, andthe rules set out in the firm’s regulations, which the employee was informed of.
Notifying your employer of a sick leave
According to Article 31 of the UAE Labor Law, the employee must notify the employer about his sicknesswithin maximum three days and submit a medical report on his condition, issued by the medical entity.
An employer may not dismiss an employee or give him a termination notice while the employee is on sick leave. If the employee uses all of his 90 days’ sick leave and has not been able to report to work afterwards, the employer may terminate his services. In such a case, the employee shall be entitled to the end of service benefits in accordance with the provisions of the labor law.
A strong United Arab Emirates benefit management plan includes both guaranteed benefits and additional perksthat employees may expect in a particular position. UAE employment law stipulates all workers are entitled to a mandatory health insurance program that must be provided to all employees. It is not mandatory but common for employers in the UAE to provide employees’ dependents with employer-sponsored health insurance.
The most common benefits for employees are:
Employees’ Provident Fund
Health Insurance for Employees
Paid leaves
Statutory leaves
Maternity and Paternity leaves
Allowances, for instance, transportation allowance
Gratuity
Reimbursement of mobile and Internet bills, etc.
The employer may appoint the worker under a probationary period not exceeding 6 six months from the date of commencement of work. The probation period of the employee must not exceed six months, or be extended for another term. When the employee completes the probation period and continues in service, the probation will be calculated as part of his service.
If the employer wants to terminate the employee for any reason during the probation period, he has to give 14 days’ prior written notice.
If an employee wants to change the job while on probation, to join another employer in the UAE, he has to give the employer a written notice of minimum one month. In this case, the new employer has to compensate the current employer for the employee’s recruitment cost, unless it is otherwise agreed between the current employer and the employee.
However, if an employee resigns from his employment during the probation period, with the intention to leave the job and the UAE, he must provide prior written notice of 14 days.
Situations in which an employment contract may be terminated:
➢ if the term of the contract expires and is not, extended or renewed
➢ if both, the employer and employee mutually agree in writing to end it
➢ if either party wishes to end it, provided that the terminating party observes the provisions of terminationof the employment contract and the notice period agreed upon (details below)
➢ in the event of the employer’s death if the subject of the contract is related to its entity
➢ in the event of the worker’s death or full permanent inability to work, based on a certificate issued by a medicalentity
➢ where a worker faces a final court judgement of a freedom-restricting penalty for a period of not less than threemonths
➢ if the establishment is closed permanently, in accordance with the legislations in force in the UAE
➢ if the employer becomes bankrupt or insolvent, or faces any economic or exceptional reasons that prevent thecontinuation of the project
➢ if the worker fails to fulfil the conditions for renewing the work permit for any reason beyond the control of theemployer.
Notice period of termination
Article 43 provides that either party in the employment contract can terminate the contract for any ‘Legitimate reason’, provided that:
a written notification is given to the other party and
the terminating party serves a notice of 1 month (30 days) to 3 months (90 days).
Additionally, the following provisions must be adhered to: work as agreed upon in the contract must be performed during the notice periodthe worker is entitled to his full wage as per the contract, for the notice period the party who fails to serve the notice period must pay the other a ‘notice period’ allowance, which is equal to theworker’s wage for the full notice period or in proportion to the remaining period.
The allowance for the notice period is calculated according to the last wage received by the worker. In the event that the employer terminates the contract, the worker is entitled to an unpaid leave of one day perweek during the notice period to search for another job.
Termination of contract without notice by the employer
Article 44 of the UAE Labor Law mentions that an employer may terminate the services of the employee withoutnotice, if the latter:
The law stipulates that the employer may terminate without notice only after conducting a written investigation ofthe worker. The dismissal notice must be in writing, justified and handed over duly to the employee.
Termination of contract without notice by the employee
Article 45 mentions that an employee may terminate the contract without notice, if the employer:
If an employee believes that he has been dismissed illegally, he can complain to Ministry of Human Resources and Emiratization. The ministry will try to solve the issue amicably. If an amicable settlement is not reached, the case willbe referred to the respective court. If arbitrary dismissal is proven, the court will order the employer to pay a compensation to the employee. The court will assess the value of compensation taking into account the type of work, the extent of damage caused to the employee and the duration of his employment. In all cases, the amount ofcompensation must not exceed the wage of the employee for a period of three months, calculated on the basis of the last wage he was entitled to.
In addition to compensation, the employee can claim his gratuity, notice period dues or any other unpaid dues he isentitled to, from his employer.
Changing jobs or working for another employer after termination of contract
Foreign employees can work for another employer and get a new work permit after the termination or expiry of thecontract if:
After termination or expiry of the contract, foreign employees get a grace period from the date of cancellation,in which they can either obtain a new work permit and residency or leave the country. Illegal residents are liable to be fined/deported.
Unless contractually agreed otherwise, the employee is legally entitled to a severance payment of 21 days’ wages foreach year of employment for the first five years, and 30 days’ wages for each additional year.
A worker who has spent one year or more in continuous service shall be entitled to an end of service gratuity upon the termination of his service. The days of absence from work without pay shall not be included in the calculation ofthe period of service and the gratuity shall be calculated as follows:
If a worker has served for less than 1 year, he is not entitled to any gratuity pay.
If a worker has served for more than 1 year but less than 5 years, he is entitled to full gratuity pay based on 21 days’salary for each year of work.
If a worker has served more than 5 years, he is entitled to full gratuity of 30 days’ salary for each
year of workfollowing the first five years.
In all cases, the total gratuity shall not exceed the wage of two years.
One of the reasons why Dubai and the UAE are popular among expats as a work destination is due to their numerous visa benefits. The UAE offers variousvisas and entry permits, including Job exploration visa.
The job exploration visa is mainly introduced as a means to attract young talents and skilled professionals to explore job opportunities available in thecountry. The visa does not require a sponsor or a host and will be granted if the applicant meets the following requirements:
Entry permit for temporary work missions under the new UAE visa rules — the UAE introduced an entry permit for temporary work missions. This entry permit allows visitors with temporary workassignments, such as probation testing or project-based missions sponsored by their employer, to apply for a temporary work mission entry permit.
Relatives or friends of UAE citizens or residents can also apply for this entry permit.Some of the requirements for this entry permit include:
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