For UAE businesses, there are two crucial deadlines related to employment legislation, the first of which is in less than a week.
Except for businesses located in the free zones of The Abu Dhabi Global Market and Dubai International Financial Centre, all employers must transfer contracts by Wednesday, February 1, in accordance with the most recent labour legislation.
Domestic workers employed by families are likewise protected from the reforms. Businesses that don’t renew employment contracts risk a fee or penalty, although the amount hasn’t been made public by the government. The legislation may not have an immediate impact on your job, but it is part of a larger reorganisation of the private sector work landscape and was originally enacted in 1980.
Firms and employees will be able to more easily agree on part-time employment, job-sharing, and project-based activities as a result of the move. A government order announced in October scrapped an intended three-year contract maximum, so companies must agree on a length with employees. Companies who modified contracts following the first ruling in February but prior to the decree in October may need to do so again.
Shiraz Sethi, a Dubai lawyer who specialises in UAE labour law, believes that only time will tell how the new legislation impacts the labour market. “It is of paramount importance that employers in the private sector are advised to review and amend employment contracts if they are currently on an unlimited time frame by February 1, 2023 to avoid possible fines or sanctions,” said Mr. Sethi, regional head of employment at Dentons, according to the National. “With the lifting of the cap of three years for a limited-term contract, this arrangement more closely reflects an unlimited-term employment contract than a true fixed-term employment contract.”
“Only time will tell how this new requirement will play out in practice and how it will impact the labour market in the UAE.” To allow greater flexible working and job-sharing, the way private-sector enterprises function will alter. According to laws implemented in February, the majority of individuals working in the private sector will have shorter, fixed-term contracts and would be able to stay in the country for up to 180 days after quitting a job.
The government waived a three-year restriction on the duration of fixed-term employment contracts in the private sector in an update announced in October. Employment contracts must now span a stated length, but there is no longer a time limit on how long the contract may be. Students and individuals returning to work after a break are more likely to benefit from more flexible working hours.
It will allow employees to work for many employers for a fixed amount of working hours or days, as well as work on a temporary basis to finish a predetermined contract. Employers were reminded to check their employment contracts and make any necessary changes to avoid fines or punishments.
The deadline for UAE citizens to apply for unemployment insurance is also approaching. By June 30, all personnel working for companies subject to the Ministry of Human Resources and Emiratisation must register. The insurance plan went into effect on January 1. Workers would pay only AED 5 to AED 10 each month. They may get thousands of dirhams every month for three months if they lost their job.
“Whilst employers are not obligated to register for their employees, they are able to if they would like to offer this as an additional benefit to their staff,” said Mr. Sethi, according to the National. “Employers should, however, continue to remind their employees of the need to register and encourage them to do so within the deadlines provided, otherwise face fines and penalties once the deadline has lapsed, similar to fines having already been issued to some companies who have failed to meet their Emiratisation quotas.”
The social security support programme is a welcome financial safety net that provides Emiratis and residents with a cash payment for three months if they lose their jobs. According to the government, the system would ensure the sustainability of a good living for Emiratis and residents during their unemployed period, as well as eliminate business risks.
