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Brief insight into New Labour law - UAE

MEDIA / Articles / Brief insight into New Labour law - UAE
From February 2, 2022, Federal Law No. 33 of 2021 (New Labor Law), shall repeal the current labor Law (Federal Law No.8 of 1980) and this is applicable to all entities and employees in the private sector, including free zone, except for Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), which implement their own set of employment laws.

It is understood that since 1980, the new UAE labour law is the most comprehensive and significant change to the emirate’s existing labour laws. The new law is designed and aimed to align the current labour laws with the international best practices on numerous fronts.

The overview below are the notable points of the new Labor Law:
  1. Ending the unlimited contract structure and replacing with fixed term work contracts for a period of three (3) years, renewable on same conditions agreed upon by both the consenting parties.
  2. Replacing previous contracts with new employment contract that sets a deadline of February 1, 2023.
  3. The new law sets a minimum wage.
  4. No discrimination based on race, religion, sex must be made, further affirming that women are granted the same wage as men based on the performance of the same work or other work of same value.
  5. Introduction of new work models such as full-time, part-time, temporary and flexible working.
  6. The new law requires a 14-days’ notice period of termination to dismiss an employee anytime during their probationary period.
  7. Competition restrictions are eased as the new law attempts to restrict the scope of non-compete clauses, contrary to the current law, setting a maximum restrictive period of two (2) years from the date of termination of employment. Furthermore, certain scenario under the new law will nullify the non-compete clause, shall limit the timeline of lawsuit hearing in connection with non-competition clauses.
The new changes are definitely aimed to enhance the sustainability of the labour market nationwide, ensure protection of worker’s rights, create and maintain a healthy, safe and business-conducive environment.

The benefits of placing a work environment with decent standards leads a nations’ path to a full and productive employment. It promoted for all and promote fair and stable globalization and indicates greater economic performance, a safety net in the times of economic crisis and especially during the times of the pandemic due to Covid-19 which shall ultimately result attracting more businesses willing to settle in the UAE region.

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