KEY DEVELOPMENTS FOR 2017


Maternity law changes

Although the law has not been changed as yet, changes relating to maternity leave in the private sector are expected in 2017. This speculation has been propelled by the creation of the Gender Balance Council, which aims to promote gender equality in the workforce and (among other issues) is expected to push for increased maternity leave.

The Abu Dhabi government sector has already changed its employment regulations to allow for three months of paid maternity leave as well as three days of paternity leave, and the private sector is expected to follow suit.


Emiratisation measures

The Ministry of Human Resources and Emiratisation (previously known as the Ministry of Labour) (“MOL”) recently announced that as of 1 January 2017, the following will apply:

  • Companies which employ over 1,000 staff will need to register with Tas’heel (the Ministry’s service provider through which work permits are processed and issued) online system and must ensure that at least two employees involved in data entry for Tas’heel related work are UAE nationals.
  • All construction companies which employ over 500 members of staff will now require at least one UAE national health and safety officer.

Companies which fail to comply will not be granted new entry permits or visas, effectively preventing them from taking on new employees. It is expected that this decision will increase the prospects of UAE nationals joining the private sector work force

Note: It should be noted that the developments set out below apply to onshore employment in the private sector and are not applicable to the public sector or within the UAE’s many free zones.


KEY DEVELOPMENTS FOR 2016


New standard offer of employment letter

As of 1 January 2016, employers have been required to provide a standard form offer of employment letter to new employees.

Employers need to submit an acknowledged signed offer letter by the candidate to the MOL before entry permits are issued and the candidate enters the country.

An employment contract cannot be less beneficial to the employee than what was stated in the offer letter. This new legislation is meant to ensure that expatriate employees are not brought to the UAE on falsely advertised salaries.


Changes to notice periods and termination process

As of 1 January 2016, the following applies in respect of employees on fixed term contracts:

  • Duration: The maximum duration of a fixed term contract will be reduced from four years to two years.
  • Notice period: Employees now require a notice period of one to three months.
  • Early termination compensation: Compensation may be as agreed upon between the parties, but no more than three months.

The amended rules require a terminating employee to pay the employer as agreed between the parties, but no more than one a half months’ salary.

Employees on permanent contracts will also see changes in terms of:

  • Notice period requirements: Previously, there was no maximum notice period. The new decree states a notice period of no more than three months.

This limit may prove to be difficult for some employers, especially in regard to senior employees, where larger notice periods are often desirable (both for the employer and the employee).


Changes to labour bans

As of 1 January 2016, work permits will be issued or renewed and the previously mandated six month post-employment work ban will not be applied in certain prescribed cases (for example, where employees engaged on fixed term contract have worked the duration of the fixed term and the contract is not renewed).


Increase in UAE National Retirement Age

From 28 February 2016, the minimum retirement age for UAE nationals was increased to 49 years, with retirement ages increasing by one year annually until the minimum age is 50 years. As a side, UAE nationals are only eligible for a pension where they have worked for 20 years or more, and pension payouts only become accessible at the age of 50.


Extension of compulsory military service

On 7 March 2016, the National and Reserve Service Authority of the UAE stated that the minimum military service required for UAE national secondary school certificate (or equivalent) male graduates will now be increased from nine months to one year. This increase will also be seen for UAE national females who volunteer to undergo military service.


Accommodation for employees earning under AED 2,000

As of 1 September 2016, employers in the UAE with 50 or more employees must ensure that all employees earning a total monthly salary of under AED 2,000 are provided with accommodation.

A practical alternative for those employees earning close to AED 2,000 would be to increase employee’s salaries to just over AED 2,000 via a housing allowance.


Requirement for companies to pay salaries within 10 days of due date

With effect from 3 October 2016, all companies employing over 100 staff must pay their employees within 10 days of the due date registered in the government-monitored Wage Protection System (“WPS”). In practice however, a company will not face any repercussions until the 16th day of non-payment, resulting ultimately in potential fines and work permit bans.

Note: It should be noted that the developments set out below apply to onshore employment in the private sector and are not applicable to the public sector or within the UAE’s many free zones.

With thanks to Gordon Barr and Roxanne Vesuvala of Al Tamimi & Company for their invaluable collaboration on this update.