Country snapshot

Key considerations

Which issues would you most highlight to someone new to your country?

Immigration and visa requirements The UAE employment regime is inextricably linked to its immigration regime; without a valid work permit and residency visa sponsorship through a locally licensed and registered entity, it is generally impossible for expatriates to work in the United Arab Emirates lawfully. UAE and other Gulf Cooperation Council (GCC) nationals (ie, citizens of Bahrain, Kuwait, Oman, Qatar and Saudi Arabia) are treated differently, as they are not required to procure or obtain a UAE residency visa due to the principle of freedom of movement across GCC member states. However, the requirement to obtain a UAE work permit still exists. Residency and work permits are valid for two or three years, depending on whether the applicable visa sponsorship is non-free zone-based (ie, onshore) or free zone-based. Such visas and permits are renewable. The only notable exception are Qatari nationals who are not permitted to enter the United Arab Emirates at the present time due to the diplomatic crisis between the two countries.

Emiratisation/nationalisation initiatives Expatriates are estimated to make up 80% of the UAE population. This disproportionate composition has led to a number of changes to the employment regime (particularly in the private sector), in order to facilitate greater emirati employment. In particular, the government has introduced an emiratisation policy for the private sector, which requires employers in most business sectors to recruit a certain number of UAE nationals for certain job categories. Recently, there has been an increased focus on emiratisation, particularly in the banking and insurance sectors. At present, these provisions do not apply in the various free zones.

Pension schemes/end of service gratuity payment Expatriate pension schemes are neither common nor mandatory (UAE and other GCC nationals are treated differently, in that they are entitled to a pension scheme where contributions are made by the employer, the employee and the government). The closest equivalent to a pension is a statutory end-of-service gratuity payment, which is based on a fixed formula and payable on termination of the employment contract, subject to certain qualifying conditions. The gratuity entitlement cannot be waived or contracted out of, but it can be replaced by a company pension scheme (subject to certain requirements being fulfilled).

What do you consider unique to those doing business in your country?

In many jurisdictions, the concept of positive discrimination (ie, treating one person more favourably because they belong to a protected class) is generally prohibited in a workplace context. However, positive discrimination in favour of UAE nationals is a unique feature of conducting business in the United Arab Emirates, with a number of sector-specific quotas and nationalisation percentage requirements in place, resulting in overall lower bank guarantee and visa sponsorship fees. UAE nationals are also afforded, in certain circumstances, special protection regarding dismissal, necessitating the prior consent and involvement of the Ministry of Human Resources and Emiratisation (formerly the Ministry of Labour). 

It is common to find lengthy post-termination restrictive covenants in local employment contracts, but the enforcement of such restrictions in the United Arab Emirates is not as robust as in other western jurisdictions, as the courts do not grant injunctive relief. Accordingly, employers are restricted to bringing a claim for damages suffered as a direct result of a breach of the restrictions, and evidencing such damages can be problematic, as employers must prove actual direct business loss following the breach. Liquidated damages clauses are therefore prevalent.

Trade unions, collective associations and workers’ councils are illegal in the United Arab Emirates. Any industrial action is viewed as a public disorder offence. This is another unique feature of conducting business in the United Arab Emirates and removes the complexities of certain employment practices and processes.

Is there any general advice you would give in the employment area?

The employment and immigration regime – which is fairly static – is a key consideration, particularly in the context of employees who are assigned or temporarily seconded to work in the United Arab Emirates from a non-UAE jurisdiction. Employees require local sponsorship through a locally licensed and registered entity in the United Arab Emirates, which is both employer and location-specific, permitting the employee to work only at the premises of the employer through which they have obtained their visa sponsorship. Limited exceptions to third-party working exist. Accordingly, by virtue of such sponsorship, the assignee or secondee will be deemed an employee of the local UAE entity, irrespective of any concurrent home country employment and documentation. 

An integral element of the visa sponsorship application process is the registration of a standard prescribed (dual Arabic/English) labour contract in a form prescribed by the Ministry of Human Resources and Emiratisation or applicable free zone authority (with certain limited exceptions), depending on where in the United Arab Emirates the sponsor is licensed and registered. For companies falling under the Ministry of Human Resources and Emiratisation’s direct jurisdiction, there is an additional requirement to enter into a standard prescribed job offer letter, which must be registered with the Ministry of Human Resources and Emiratisation. Companies cannot rely on their own internal employment contracts in substitution of the prescribed form labour contract and, where internal contracts are in place, they must ensure consistency in their documentation – both company-specific and UAE labour contract-specific documentation.

Emerging issues/hot topics/proposals for reform

Are there any noteworthy proposals for reform in your jurisdiction?

There have been several discussions about amending Federal Law 8/1980 (the Labour Law), as amended, the principal objectives of which have been to:

  • make the private sector more attractive to UAE nationals;
  • shift the concentration of youth employment away from the public sector, which is saturated; and
  • possibly introduce a pension provision for expatriates to replace or augment the statutory end of service gratuity model which is in place.

No formal legislative amendments or timetable for action has been communicated or implemented.

What are the emerging trends in employment law in your jurisdiction?

The introduction of a pension system for expatriates (to replace the end of service gratuity lump sum that expatriates receive) has been discussed in the media recently. It remains to be seen if and when such a pension system will be implemented.

Additional emerging trends in employment law are greater female participation in the workforce and maternity rights. The Labour Law allows for 45 calendar days of paid maternity leave (at full pay), if the employee has been employed with the same employer for at least one year. If the employee has been employed for less than one year when she gives birth, she is entitled to the same amount of maternity leave, but at half pay.  

While no legislative amendments have been implemented and no timetable has been adopted or proposed, there have been a number of recent press reports regarding proposals to enhance the existing maternity leave and pay regime in the United Arab Emirates, in a bid to:

  • attract greater female participation in the workforce (in particular, the private sector); and
  • provide for a more internationally focused protection regime.

Most notably, a Gender Balance Council has been established, with the aim of:

  • promoting gender equality in the workplace; and
  • leading proposals for increased maternity leave provisions.

Uniquely, the Abu Dhabi public sector recently changed its employment regulations to allow for three months of paid maternity leave and three days of paternity leave. The private sector is expected to follow suit. Nationalisation initiatives and an increasing focus on greater Emirati employment in the private sector remain high on the government agenda.

The employment relationship

Country specific laws

What laws and regulations govern the employment relationship?

Employment relationships in the private sector are generally governed by Federal Law 8/1980 (the Labour Law), as amended. The Labour Law is supplemented by various ministerial resolutions and decrees.

Some UAE free zones (eg, the Jebel Ali Free Zone) have introduced their own employment regulations (which broadly mirror the Labour Law’s minimum provisions). Where there is inconsistency between the applicable free zone regulations and the Labour Law, the terms most favourable to the employee prevail.

The Dubai International Financial Centre and Abu Dhabi Global Market Free Zones both fall outside the Labour Law’s scope and instead have their own free-standing employment regulations.

Who do these cover, including categories of worker?

The Labour Law applies to all employees in the UAE private sector (both expatriates and UAE and other Gulf Cooperation Council nationals). However, there are certain categories of individual who are ‘carved out’ of the protection provided under the Labour Law, including:

  • employees of the federal government and government departments of UAE member emirates;
  • employees, labourers and staff of municipalities and federal and local public authorities and corporations;
  • employees recruited for federal and local government projects;
  • members of the armed forces, police and security force;
  • domestic servants employed in private households (and similar establishments); and
  • farming and grazing labourers, other than those who:
    • work in agricultural firms that process their own products; or
    • are permanently employed to operate or repair mechanical equipment required for agricultural work.

The Labour Law does not distinguish between full and part-time employees. As such, part-time employees are entitled to the same benefits and entitlements as full-time employees. 

Misclassification

Are there specific rules regarding employee/contractor classification?

The Labour Law contains no specific provisions regarding employee/contractor classification. At present, the concept of a ‘contractor’ or ‘self-employed’ individual (as commonly understood in other jurisdictions) is not expressly recognised under the law. The only exception is that in certain free zones there is a freelancer visa that individuals can obtain in order to work independently. Individuals can establish their own consultancy company (akin to a contractor) and render services within the confines and terms of their trade licence, but such arrangements are limited.

In practice, there is a distinction between expatriates and UAE nationals insofar as the latter are afforded additional benefits and protections not otherwise enjoyed by expatriates.

Contracts

Must an employment contract be in writing?

Employment contracts must be in writing. As part of the visa sponsorship application process, employees must execute the UAE labour contract, as issued by the Ministry of Human Resources and Emiratisation (formerly the Ministry of Labour) or applicable free zone authority, which is in Arabic and English. Arabic is the official language of the United Arab Emirates and therefore prevails in the event of inconsistency in terms contained in English documents. It is common practice for employers to supplement a UAE labour contract with their own more comprehensive employment agreements, which need not be registered with the Ministry of Human Resources and Emiratisation or applicable free zone authority.

Are any terms implied into employment contracts?

The Labour Law establishes a minimum framework of employment terms and all employment contracts should be read in conjunction with this framework. Implied terms of, for example, good faith and fidelity, are not incorporated in the UAE labour contract or any supplementary company employment contract, given that the United Arab Emirates is a civil jurisdiction and such common law concepts do not apply (with the exception of the Dubai International Finance Centre and Abu Dhabi Global Market free zones). 

Are mandatory arbitration/dispute resolution agreements enforceable?

In an employment context, the UAE labour court has exclusive jurisdiction for hearing and determining disputes. The mechanisms of arbitration and dispute resolution are unavailable as a means of redress in labour disputes.

The first step in resolving a labour-specific complaint is the mandatory process of informal mediation through the Ministry of Human Resources and Emiratisation or the applicable free zone authority’s labour department. In the event that the parties are unable to resolve the dispute amicably at this stage, it will be escalated to the labour court for adjudication, on the ministry’s referral.

How can employers make changes to existing employment agreements?

Employee consent is required before any change to the key terms and conditions of an employment contract can be effected. This should be in writing. The Labour Law permits an employee to terminate the employment relationship immediately without notice in the event that the employer breaches its contractual or legal obligations towards the employee. 

In case of companies falling under the remit of the Ministry of Human Resources and Emiratisation or free zone authorities, changes to core contractual terms – such as remuneration package details – will likely necessitate formal amendments to the employment agreements registered with the ministry or applicable labour authority, which may, depending on the circumstances, also necessitate formal execution before or in front of the ministry or applicable free zone authority.

Employers and employees cannot opt out of the minimum requirements mandated by the Labour Law. 

Foreign workers

Is a distinction drawn between local and foreign workers?

All expatriate employees must be sponsored by a local UAE entity for UAE work permit and residency visa purposes. UAE nationals are required to have an appropriate and valid work permit regulating their employment in the UAE. There are no mandatory requirements for:

  • expatriates to be employed under fixed-term contracts; or
  • employment to be tied or equal to the duration of an expatriate’s residency visa or work permit.

Employers have a statutory obligation to repatriate expatriate employees on cancellation of their visa sponsorship (limited exceptions apply). 

A distinction is drawn between expatriate workers and UAE nationals in the context of the provision of specific benefits, entitlements and, in certain circumstances, termination provisions. For example, UAE nationals must generally be enrolled in the state federal pension scheme (there is no equivalent state scheme for expatriates). Further, UAE nationals are afforded special protection regarding termination, limiting the grounds under which their employment can be terminated and necessitating, in certain circumstances, the Ministry of Human Resources and Emiratisation’s prior consent and involvement. Expatriates are not afforded a corresponding protection.

The Labour Law also provides for a system of positive discrimination in favour of UAE nationals, granting them preferential status at the recruitment stage over expatriates. This system of positive discrimination is generally implemented by the Ministry of Human Resources and Emiratisation, with the Labour Law specifically providing that the ministry cannot approve the recruitment of non-UAE nationals unless its records show that there are no unemployed UAE nationals who are capable of performing the job. If no UAE national is available, Arab employees who are nationals of other Arab states must be prioritised over employees of other nationalities.

Recruitment

Advertising

What are the requirements relating to advertising positions?

There are no specific requirements, rules or regulations governing the advertisement of positions in the United Arab Emirates. It is common for advertised posts to be restricted to Western-qualified candidates, specific genders or nationals of specific countries. The hierarchy of importance stipulated above (ie, UAE nationals first, followed by nationals of other Arab states and then individuals of other nationalities) should apply, but this is generally not implemented by the Ministry of Human Resources and Emiratisation, despite there having been more robust enforcement in certain sectors.

Background checks

What can employers do with regard to background checks and inquiries in relation to the following:

(a) Criminal records?

As of February 4 2018 all employees applying for employment residence visas must obtain a Good Conduct Certificate (or No Criminal Record certificate, or similar) from every country in which they have resided in the last five years, at the time of work permit application.  

(b) Medical history?

As a pre-condition to the issuance of a UAE residency visa (and as part of the general visa sponsorship application process), all expatriates must undergo a medical test at a local government-approved medical testing centre. This test is intended to screen for certain infectious diseases (eg, HIV, AIDS and tuberculosis). A UAE residency visa will not be granted if an expatriate fails this test. 

An employer may ask a candidate to undergo additional medical tests at a clinic or hospital of the employer’s choosing and at the expense of the employer. The employer may make employment conditional on the candidate passing these tests.

(c) Drug screening?

There are no general restrictions in Federal Law 8/1980, as amended, regarding employer screening for drugs or the implementation of drug testing measures as part of the pre-employment stage. The United Arab Emirates adopts a zero-tolerance approach to the possession and misuse of narcotic drugs. In practice, such pre-employment checks are rare.

(d) Credit checks?

In November 2014 the Central Bank established the Al Ittihad Credit Bureau to check the creditworthiness of individuals. Timelines for credit check reports vary depending on the bank. 

(e) Immigration status?

Expatriate employees require a UAE work permit and residency visa issued through a locally licensed and registered entity to lawfully reside and work in the United Arab Emirates. The Emirates ID Authority will also issue a unified identification card, which residents should carry at all times.

(f) Social media?

There are a number of laws in place (eg, the Penal Code and the Cybercrimes Law) that establish an overarching framework for protecting privacy and punishing the misuse of information or data breaches. However, depending on a candidate’s user privacy settings, certain information may be publicly available. It is common for employers to utilise professional social media sites, such as LinkedIn, as part of the general pre-employment and recruitment stage.

(g) Other?

N/A.

Wages and working time

Pay

Is there a national minimum wage and, if so, what is it?

There is no national minimum wage for expatriate employees. However, UAE nationals are subject to certain specific salary thresholds and requirements. If a UAE national has no high school certificate, his or her salary should be no less than Dh3,000 per month. High school graduates must earn a minimum of Dh4,000 per month and UAE nationals with a college certificate or more must earn a minimum of Dh5,000 per month.

Are there restrictions on working hours?

Normal working hours must not exceed eight hours per day and:

  • 48 hours per week over a six-day working week; or
  • 40 hours per week over a five-day working week.

This daily cap can be increased to nine hours per day for certain industries (eg, hotels and security services) or as directed by the Ministry of Human Resources and Emiratisation. Senior employees are exempt from the working hours provisions, including the overtime provisions. However, such categories of personnel are narrowly defined in the applicable ministerial order (see below).

During Ramadan, the standard normal working hours are reduced by two hours (with no corresponding reduction in pay).

Hours and overtime

What are the requirements for meal and rest breaks?

Employees cannot work more than five consecutive hours without taking a break of at least one hour for rest, food and prayer. This time does not constitute a working hour. There are limited exceptions to these requirements.

How should overtime be calculated?

Overtime cannot exceed more than two hours per day, unless the work is necessary to prevent or alleviate a substantial loss or a serious accident. Overtime is payable at statutory rates, depending on when the overtime work is performed. In general, the rate is 125% of the normal hourly rate. However, if the employee works between 9:00pm and 4:00am, the rate is 150% of the normal hourly rate. For Friday working (which is generally designated as a statutory day off), an employer must offer:

  • a compensatory day off work; or
  • basic salary for hours worked and additional compensation equal to 50% of that salary.

Unless an employee is paid daily, he or she cannot be required to work for more than two consecutive Fridays per month.

What exemptions are there from overtime?

Employees cannot opt out of the working time and overtime restrictions. However, the restrictions do not apply to:

  • senior employees occupying managerial or supervisory roles, if their roles gives them authority over other employees; and
  • naval crew and seamen working under special conditions because of the nature of their work (excluding dock workers and persons that load and unload ships and perform similar operations).

These exclusions do not apply to work performed on a public holiday where employees are entitled to time off and/or overtime pay.

According to the applicable ministerial order, the above senior employees are expressly defined as including the chair of the board of directors, general and departmental managers and employees with supervisory functions acting with the employer’s authority.

Is there a minimum paid holiday entitlement?

In the first year of employment, an employee is entitled to no fewer than two days’ paid leave between his or her sixth and 12th month of service. Thereafter, an employee is entitled to 30 calendar days’ paid leave. In practice, employers generally offer the 30-calendar day entitlement (or the working day equivalent) from commencement and on a pro-rata basis.

What are the rules applicable to final pay and deductions from wages?

On the termination of an employment contract, employers can deduct any amounts owed by the employee to the employer from his or her statutory end of service gratuity payment.

During employment, employees can recover advances or overpayments of salary of up to 10% of the employee’s gross monthly salary. 

Record keeping

What payroll and payment records must be maintained?

All employers with five or more employees must keep a personal file for each employee, detailing:

the employee's:

  • name;
  • occupation;
  • age;
  • nationality;
  • place of residence;
  • marital status;
  • start date;
  • pay rate and any changes to this rate;
  • annual leave entitlements;
  • any disciplinary penalties imposed;
  • any occupational injuries and diseases suffered; and
  • the date of and reasons for the employment contract’s termination.

Employers with 15 or more employees must keep at their place of business separate registers recording details of employees' wages and occupational injuries and diseases.

It is generally recommended that employers keep records for at least two years after the termination of an employment contract.

Discrimination, harassment & family leave

What is the position in relation to:

Protected categories

(a) Age?

Federal Law 8/1980 (the Labour Law), as amended, includes no specific or express anti-discrimination provisions. Accordingly, there are no statutory measures or regulations protecting employees of a particular class or protected characteristic. 

UAE residency visas are normally granted to expatriates up to the age of 65. Thereafter, they are issued on an annual basis, but are subject to the approval of the Ministry of Human Resources and Emiratisation.

(b) Race

The Labour Law includes no specific or express anti-discrimination provisions (please see above).

(c) Disability?

The Labour Law provides that, if a disabled employee (notwithstanding a partially disabled employee) can perform other work consistent with his or her health, the employer must assign the employee – at his or her request – to that other work, if possible, and pay the employee his or her normal wage. The Labour Law includes no additional specific or express anti-discrimination provisions.

(d) Gender?

The Labour Law contains no specific anti-discrimination provisions (please see above). However, it does provide that female employees are entitled to the same wage as male employees performing the same work. 

(e) Sexual orientation?

Homosexual acts are a criminal offence in the United Arab Emirates. 

(f) Religion?

The Labour Law includes no specific anti-discrimination provisions (please see above). However, the United Arab Emirates enacted an anti-discrimination law in 2015, which is primarily aimed at preventing and criminalising hate crimes and the incitement of hatred. The law expressly defines ‘religion’ as “the heavenly religions – Islam, Christianity and Judaism”. 

To date, the anti-discrimination law’s scope in the employment context has been largely untested.

(g) Medical?

Employees cannot be dismissed or served with a notice of dismissal while on annual or sick leave. 

(h) Other?

N/A.

Family and medical leave

What is the position in relation to family and medical leave?

An employee who has completed one year of continuous service is entitled to 45 calendar days’ paid maternity leave (at full pay). If the employee’s service is less than one year, she will be entitled to the same leave at half pay. Additional unpaid leave for up to 100 consecutive or non-consecutive days is possible, provided that the employee can prove the existence of a medical condition relating to the pregnancy or birth, evidenced by a medical certificate, preventing her from returning to work.

The Labour Law provides no rights regarding adoption or paternity leave.

Sick leave and pay do not accrue during a probationary period (which can be a maximum of six months). Once the employee has successfully completed his or her probationary period and a further three consecutive months of employment thereafter, he or she is entitled to 90 calendar days’ sick leave per annum, paid as follows:

•For the first 15 calendar days, the employee will receive full pay.

•For the next 30 calendar days, the employee will receive half pay.

•For the remaining 45 days, the employee will receive no pay.

Sick pay is paid by the employer (unless the employee’s sickness results from or is attributable to the employee’s misconduct or consumption of narcotics).

Harassment

What is the position in relation to harassment?

The Labour Law includes no express provisions dealing with harassment. However, sexual harassment is a criminal offence. 

Whistleblowing

What is the position in relation to whistleblowing?

There is no specific whistleblowing legislation in the United Arab Emirates and no specific protection for whistleblowers. 

Privacy in the workplace

Privacy and monitoring

What are employees’ rights with regard to privacy and monitoring?

The Penal Code and the Cybercrimes Law prohibit and criminalise the disclosure and dissemination of confidential information without consent or authorisation, including in regards to the invasion of privacy (in certain circumstances). Monitoring of employee emails on company work systems should be expressly included in employment contracts (and express employee consent and acknowledgement should be obtained). In practice, such monitoring should:

  • serve a legitimate purpose;
  • not be disproportionate or an unwarranted invasion of privacy; and
  • fall within the framework of the applicable UAE laws.

To what extent can employers regulate off-duty conduct?

Article 120 of Federal Law 8/1980, as amended, permits employers to terminate an employment contract immediately if the employee is convicted of an offence involving honour, honesty or public morals.

An employer can also temporarily suspend an employee without pay where the employee has been charged with committing a deliberate offence against life, honour or honesty or an offence associated with a strike (if acquitted or not prosecuted, the employee is entitled to reinstatement at full pay).

In general, conduct that occurs outside work cannot be punished or result in termination, unless it is connected to an employee’s work or results in a criminal conviction.

Are there rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?

There are no specific rules protecting social media passwords in the employment context. Insofar as the monitoring of employee social media accounts is concerned, please see the above comments regarding the Cybercrimes Law and Penal Code considerations.

Trade secrets and restrictive covenants

Intellectual Property

Who owns IP rights created by employees during the course of their employment?

In general, an inventor is the owner of his or her invention, unless he or she is hired specifically to invent. An employer can apply for a patent for the invention where it was made in the course of an employee’s employment. However, an employee is entitled to compensation for the assignment of an invention and further compensation if the economic value of the invention ends up being greater than contemplated when the contract was signed.

Where an employee invents outside the scope of employment, the employer has ownership over the patent for a specific period starting from when the employee notifies it of the invention, where the invention relates to the employer’s business. Accordingly, UAE legislation assists employers by providing for a presumption of ownership insofar as patents and designs are concerned.

Conversely, there is no principle of an employer’s automatic ownership of copyright materials. This applies even where the employee was hired to invent.

Restrictive covenants

What types of restrictive covenants are recognised and enforceable?

Although Federal Law 8/1980 (the Labour Law), as amended, and the Civil Code recognise an employer’s ability to include post-termination restrictions – in particular, non-compete clauses – in employment agreements, the law is silent with regard to:

•soliciting and dealing with clients and customers; and

•poaching employees.

However, in practice, it is common for companies (particularly multinationals) to include various post-termination restrictions in their employment contracts or as part of separate standalone agreements.

In theory, the UAE courts will recognise restrictive covenants provided that they are no wider than reasonably necessary to protect the employer’s legitimate business interests (in terms of scope, territory and duration). However, in practice, restrictive covenants are difficult to enforce due to the fact that the courts do not grant injunctive relief (ie, orders prohibiting an employee from performing a certain action, such as joining a competitor or contacting specific clients). Accordingly, employers are restricted to bringing a claim for damages suffered as a result of the breach, and evidencing such damages can be problematic, as the employer must prove actual direct business loss as a consequence of the breach.

Non-compete

Are there any special rules on non-competes for particular classes of employee?

Non-compete clauses are not specific to a particular class of employee. The Labour Law provides that where the employee in question has become acquainted with the employer’s customers or familiar with the employer’s trade secrets or confidential information, the employer can subject the employee to non-compete restrictions. The basic requirements under the law regarding non-compete clauses are that:

  • the employee must be 21 or over;
  • the restriction must be in writing;
  • the clause must be limited in time, jurisdiction and the nature of the business; and
  • the clause must be no wider than is reasonably necessary to protect the employer’s legitimate business interests.

Employers generally contractually restrict such restrictions to the emirate in which the employee was employed and for a duration of no more than six months.

However, as indicated above, such an analysis is largely academic in the context of enforcement action for breach of post-termination restrictions, given the absence of injunctive relief. It is therefore common for employers to incorporate as part of the employment contract a liquidated damages clause which has the added advantage of shifting the burden of proof on to the employee, who must disprove that the pre-agreed estimate of loss has been sustained, which is invariably problematic in practice.

Discipline and grievance procedures

Procedures

Are there specific laws on the procedures employers must follow with regard to discipline and grievance procedures?

Federal Law 8/1980 (the Labour Law), as amended, contains minimal procedures that regulate disciplinary action. For instance, employers must comply with strict minimum legal formalities and penalties cannot be imposed unless:

  • the employee has been notified in writing of the allegations against him or her;
  • the employee has been given an opportunity to comment on the allegations. There is no prescribed or typical period for the employee to respond; in practice, employers usually provide for up to seven days;
  • the employer has investigated any defence provided by the employee in respect of the allegations; and
  • the process listed in the above points is recorded in the employee’s personnel file and the penalty is noted at the bottom of the report.

Employers cannot impose more than one penalty simultaneously or combine a disciplinary penalty with a deduction of part of an employee’s wages. Employees must also be notified in writing of:

  • the nature of the disciplinary penalty;
  • the reasons for the penalty; and
  • the action that will be taken against the employee if the offence is repeated (where appropriate).

The Labour Law provides strict time limits for taking disciplinary action. An employer must initiate a disciplinary procedure within 30 calendar days of discovering the alleged misconduct and a disciplinary penalty must be imposed within 60 calendar days of the investigation having been concluded and the employee’s guilt established.

There are no statutory rules governing or regulating grievances or grievance procedures.

Industrial relations

Unions and layoffs

Is your country (or a particular area) known to be heavily unionised?

Trade unions, collective associations and workers’ councils are illegal in the United Arab Emirates.

What are the rules on trade union recognition?

N/A.

What are the rules on collective bargaining?

N/A.

Termination

Notice

Are employers required to give notice of termination?

To dismiss an employee (engaged for an indefinite period) other than for ‘cause’ (which is exhaustively defined in Federal Law 8/1980 (the Labour Law), as amended), employers must provide a minimum of 30 calendar days’ prior written notice (or longer, if required under the employment contract).

Redundancies

What are the rules that govern redundancy procedures?

There is no concept of redundancy under the Labour Law and therefore no prescribed process that employers must follow when dealing with a redundancy. Redundancies fall under the ordinary dismissal provisions provided for under the Labour Law. Consequently, when carrying out redundancies, employers must ensure that they comply with the Labour Law and pay the employee appropriately.

Are there particular rules for collective redundancies/mass layoffs?

No.

Protections

What protections do employees have on dismissal?

The termination of an indefinite contract for an invalid reason (ie, a reason unconnected to the employee’s performance) exposes the employer to the risk of an unfair dismissal compensation award of up to three months’ gross salary. Comparably, the premature termination of a fixed-term contract in circumstances not otherwise permitted under the Labour Law entitles the employee to claim early termination compensation of three months’ gross salary (or gross salary for the remaining period of the contract, if shorter).

Further, UAE nationals are afforded special dismissal protections.

Courts/tribunals

Jurisdiction and procedure

Which tribunals or courts have jurisdiction to hear complaints?

For parties under the remit of the Ministry of Human Resources and Emiratisation, an employee must first file a labour complaint with the ministry, which will attempt to broker a settlement between the parties. The Ministry of Human Resources and Emiratisation has no power to make binding decisions or judgements, but will generally provide recommendations in an attempt to resolve matters between the parties mutually and amicably. Although the ministry technically has the power to schedule up to three hearings with the parties to mediate the dispute (lawyers are not generally permitted at this stage), in practice, if matters cannot be resolved at the first hearing, the ministry will generally refer the complaint to the labour court. In the free zones, the first port of resolution of labour complaints is the free zone’s applicable labour department, which will operate in a similar manner to the ministry. If matters cannot be resolved at this stage, the complaint will be escalated to the labour court, on the ministry’s referral.

What is the procedure and typical timescale?

Complaints under Federal Law 8/1980, as amended, should be raised within one year of the termination of an employment contract (or other cause of action). However, in practice this can be extended on the basis that the claim may be filed within one year of a complaint being filed with the Ministry of Human Resources and Emiratisation (provided that the complainant had filed the claim at the ministry within one year of the cause of action).

The general timeframe for the resolution of a straightforward labour case (ie, one not necessitating the appointment of an expert) is three to six months. Where a case is sufficiently complex and requires an expert to examine or analyse certain elements, this is increased to 12 months or more. 

Witness evidence is not generally permitted. Case resolution is ordinarily on a written basis and once the judge is satisfied that he or she has sufficient evidence to determine a case on the papers filed, judgment will be rendered. A brief verbal summary of the judgment will be provided first, with the detailed written judgment given at a later date (about 10 working days post judgment).

Parties have 30 calendar days from the date of receipt of the summary judgment to decide whether to appeal. In the absence of an appeal, the judgment becomes final and the winning party may then open an execution account with the court, into which the losing party must pay the judgment amount.

Appeals

What is the route for appeals?

Parties can appeal a Court of First Instance decision within 30 calendar days of receipt of the judgment. The appeal mechanism involves filing proceedings before the Court of Appeal and then the Court of Cassation. Typical timeframes are six to 12 months for Court of Appeal proceedings and four to eight months for Court of Cassation proceedings.

Successful parties can recover costs from the losing party. However, UAE judges tend to award only nominal or minimal costs.