What is UAE Labour Law 2023 all about?
According to the UAE Labour Law 2023, it was formerly mandatory for all workers to have fixed-term contracts, and a one-year period was given to convert indefinite-term contracts. Initially, the maximum duration for fixed-term contracts was three years, but this rule was modified, and now there is no limit, and employers and employees can mutually agree on the duration of the fixed-term contract.
UAE new labour law is governed by Federal Law No. 8 of 1980, or the “Law,” as revised by Federal Laws No. 24 of 1981, No. 15 of 1985, and No. 12 of 1986.
Federal Law No. 8 of 1980, enacted on April 20, 1980, specifies the basic requirements of employee rights and benefits to which companies must comply, as well as the duties of workers working within the UAE.
UAE Labour Law 2023
Except for the Dubai International Financial Centre and the Abu Dhabi Global Market, which have their own employment laws in place, the UAE New Labour Law would also apply to all businesses and employees operating in the UAE’s private sector, including those located in the country’s free zones.
Many surprising changes are brought about by the UAE New Labour Law. In part, because much of the UAE New Labour Laws specifics have been delegated to upcoming executive regulations, the justification for some of the changes is not always evident, and it is challenging to predict how certain sections will function in reality.
With these executive regulations, it is intended that any current ambiguities would be resolved.
However, there are several important considerations for impacted firms to keep in mind, and adjustments will need to be made to employment contracts, policies, and procedures.
Probationary Period Termination by Employer
Employers can terminate a contractual employee’s employment without 14 days’ written notice.
Employee Termination During Probationary Period
During their probationary period, employees who wish to transfer to another company in the UAE may do so by delivering at least one month’s written notice of their intent to do so.
According to the UAE New Labour Law, the previous employer shall be reimbursed for the expenses related to hiring the employee in this situation by the new company.
If an employee wants to quit their job during their probationary period, they must give at least 14 days of written notice. According to the UAE New Labour Law, if an employee leaves the UAE and returns within three months with a work visa issued by the MOHRE and another employee, their new employer is required to pay their former employer’s recruiting expenses.
Termination on Notice
By providing written notice, either party may end the employment relationship for “good cause.”
Notice Period in UAE
Although notice durations are now restricted to 90 days, the minimum notice period is still 30 days. Employers who have to deal with the departure, replacement, and recruiting of top executives, who normally have notice periods of six to twelve months, are likely to find this to be an unwanted development.
UAE Labour Law Visa Cancellation
Your sponsor is often the only one who may revoke your visa for residency. You are unable to handle the application by yourself.
If a company decides to cancel an employment visa for its employee, it must first approach the Ministry of Human Resources and Emiratization with an application to compensate the employee’s labour contract and labour card. The employee must also sign this application.
Then, the employer should apply to the General Directorate of Residency and Foreigners Affairs (GDRFA) for visa cancellation.
The company must also cancel the work permit. For this, it must submit a letter signed by the employee stating that he has already received all his wages and end-of-service benefits to the Ministry of Human Resources and Emiratisation.
Before cancelling his or her own visa, a person who is sponsoring his or her spouse, children, and other dependents must first cancel the visas of the dependents.
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Registered typing centre
The sponsor is free to go to any license typing office in the relevant emirate that has been registered with GDRFA. The typing centre will complete the cancellation form on your behalf and submit it electronically via the relevant GDRFA.
As an alternative, the sponsor may carry out the cancellation electronically using the relevant GDRFA or the Federal Authority for Identity and Citizenship’s channel portal.
For cancellation of a resident visa through the GDRFA, the subsequent documentation is necessary:
Original passport of the sponsored original positive identification of the sponsored if the sponsored ones are outside of the UAE, the sponsor may present the first passport or a computerized extract of their UAE residence visas.
Cancellation form signed by the sponsor if the sponsor could be a company or a firm, the cancellation form must be signed and sealed by the corporate stamp and a clearance certificate from the Ministry of Human Resources and Emiratisation must be attached.
UAE Labour Law 2023: Final Settlement
How does the final settlement work?
The procedure used to determine all of the outstanding debts for a worker who is leaving, resigning their employment, or being fired by the corporate is understood as the final settlement calculation.
It includes the calculation of each obligation that has to be paid, including the top-of-service gratuity, repatriation ticket, notice period pay, any unused leave, i.e. vacation pay, unprocessed salary, the other benefits or compensation mentioned within the contract, the other outstanding payment or deduction, etc.
Encashing paid leaves as per the UAE Annual Leave law 2023
An employee has the proper to 30 calendar days of annual leave annually within the UAE. This complies with Employment Law’s Article 29(1)(a).
For unused yearly leaves, an employee will be eligible for “cash in lieu.” This computation is predicated on the employee’s base monthly compensation. If the worker decides to not use the yearly leave, they may jointly choose to receive compensation from the corporate in its place.
In line with Article 19(1) of Cabinet Resolution No. 1 of 2022, which states: “Subject to the provisions of paragraphs (8) and (9), Article 29 of the utilization Law, an employee may carry over less than half his annual salary, an employee may carry over no more than half his annual salary, and an employee may carry over less than the opposite 1/2 his annual salary.
What is the new rule of gratuity in 2022?
There would be legal expenses to pay if the sum is greater than Dh100,000. As specified in the employment contract, end-of-service gratuities can now be paid in either UAE dirhams or the employee’s preferred currency. According to Dr. Elhais, all end-of-service benefits must be paid within 14 days to avoid penalties.
Do I need to pay if I resign on a limited contract?
Over Limited Contract Resignation, the employee will need to pay a penalty decided by the company.
What is the UAE new labour law 2023?
The law forbids forced labour as well as discrimination based on disability, gender, race, colour, sex, religion, or national or social origin. It also outlines the obligations employers have to their workers. Whether UAE citizens or foreigners, all employees who work in the UAE must abide by the law.