On the 15 November 2021, the UAE Cabinet approved a new Labour Law, Federal Law Number 33 of 2021 (the New Labour Law) which came into force on 2 February 2022 and repeals Law Number 8 of 1980 (the Old Law); replacing it entirely.
The New Labour Law consolidates many of the changes which have been introduced by the Ministry of Human Resources and Emiratisation (MHRE) through various regulations over the past five years and also introduces significant new changes, thus amounting to a radical overhaul of labour relations in the UAE. It will apply across the UAE, in each of the seven emirates and its free zones (with the exception of the DIFC and ADGM).
"The new Federal Labour Law is the most significant overhaul of labour relations in many years. It seeks to provide a modernised framework for businesses to resource their operations and for individuals to pursue their careers and develop their skills." - Sara Khoja, Partner
What are the top priorities for employers in the UAE?
In the first year of the new law, employers will need to review their policies and employment contracts for compliance with the new provisions. Importantly, they will also need to project manage the conversion of existing unlimited term contracts into limited term contracts.
"The new Labour Law introduces a range of family related leave whilst also enhancing maternity leave; thereby aligning the law with international best practice." - Rebecca Ford, Partner
Emiratisation in the UAE
Emiratisation was and continues to be one of the hot topics in the UAE, particularly in light of the promotion of foreign investment into the UAE and the relaxation of restrictions on foreign ownership.
Recently, following the introduction of the new UAE Federal Labour Law on 2 February 2022, the Ministry of Human Resources and Emiratisation (MHRE) issued a new Ministerial Decision in relation to Emiratisation in the UAE. In this article, we take a closer look at the new Emiratisation requirements which go hand in hand with the UAE’s ambitious target of creating 75,000 new jobs in the private sector by 2025.
The Nafis (meaning to compete in Arabic) program was launched on 13 September 2021 as part of the UAE’s ‘Projects of the 50,’ and aims to support Emirati nationals to pursue their professional careers in the private sector.
Against an ambitious target of creating 75,000 jobs in the private sector by 2025, the program has a number of different strands by way of support to Emirati nationals seeking either to enter the workplace or to develop their career. It is also open to private sector employers essentially to partner with the UAE Government to facilitate employment opportunities and to increase the number of UAE nationals in their organisation. Alongside Nafis, the UAE Government has announced a general target of 10% Emiratisation in the private sector by 2025 in skilled and knowledge-based roles (with the current requirement being 2% for commercial organisations).
Eleven initiatives have been announced as part of the Nafis scheme (with nine being currently operational).
Clyde & Co's UAE Labour Law webinar series
We delivered a UAE labour law webinar series where Sara Khoja, Rebecca Ford and Samantha Ellaby highlighted the key operational changes required under the new UAE Labour Law. The webinar series explored end of service gratuity, employment contracts, employer policies and what the new provisions relating to discrimination and harassment mean in practice. Our concluding webinar discussed the key features of the Implementing Regulations including working hours and overtime, leave, work regulations and non-compete obligations.
Watch the webinar series:
The coming year will be an exceptionally busy time for employers as they work to update their frameworks and start to work out not only how to implement the new law but also how to use the framework effectively for their operations as they grow their business in the UAE and beyond.
One of the most significant developments in the new law is the recognition of different work models, including part time, flexible working and temporary work which opens up an exciting range of resourcing models for employers and work options for individuals. Coupled with the immigration developments which have involved the introduction of a range of new visas we will now see more flexibility and really for the first time in the UAE, the separation of work and immigration status.
In many ways the new law is the start of a process to modernise and continue to develop the UAE employment framework. One of the potential developments is likely to be the introduction of a savings or pension scheme for non-GCC nationals to be enrolled into in lieu of Gratuity.