New UAE labour rules to come into effect from January 1

This post was originally published on 21 December 2015.

Three new decrees that were recently issued by UAE’s Ministry of Labour will come into effect from January 1, 2016.

The revised laws that offer flexible labour mobility for employees will benefit workers who have completed two-year contracts. The rules also pertain to conditions for granting of work permits by a new employer and outline the rules for terminating employees.

Rule 1: Standard work contract

A worker must be presented with an employment offer that conforms with the unified contract and then must be signed by the worker.
All contract renewals in force beforehand must use the new unified contract which, in addition to the employment offer.
The terms of contract cannot be altered or substituted unless approved by the ministry.
The contract must be signed by the worker before it is submitted to the labour ministry for the issuance of a work permit, which must not be altered at any stage.

Rule 2: Contract termination

Term contracts up to two years can be terminated in ANY of the below conditions:
a) If the term of the contract expires.
b) Both parties agree to end their two-year contract.
c) One party unilaterally acts to terminate contract or renewal but complies with legal consequences of early termination including notice in writing (Minimum: 1 month, Maximum : 3 months).
d) An employee violates labour law rules under Article 120.
Non-term contracts can be terminated in ANY of the below conditions:
a) Both parties agree to end their contract.
b) One party gives notice of termination (Minimum: 1 month, Maximum : 3 months).
c) One party unilaterally acts to terminate the contract but bears consequences of early termination.
d) An employee violates labour law rules under Article 120.

Under the new rule, the work contract is considered null if the employer is found to have violated the law including failure to pay the worker for two months.

In case a worker could not start his job because of the closure of the company, the labour ministry will send inspectors to check the company’s status before issuing a decision within two months.
As for cases considered by the labour court at the ministry, it will issue a final decision forcing the employer to pay the worker two months’ salary or to compensate him for service termination or depriving workers from end of service benefits.

Rule 3: Issuing new job contracts

For both term and non-term contracts, a new permit may be granted upon termination of the workers employment when the term of the contract has expired.

A new permit can be granted when both worker and employer mutually consent to terminate the contract during the term provided that the worker has completed at least six months employment or if workers qualify for a skill set series classified by the ministry.

A new permit can be issued for a worker whose employer terminated him or her without reason provided the worker has completed six months.

The six-month rule is waived if the worker has skill levels classified by the ministry as 1, 2, and 3 meaning those who hold a university degree, post-secondary diploma or high school diploma, respectively.

Term contracts can be terminated with notice periods of between one and three months, of the terminating party continues to honour contractual obligations for the term duration or if the terminating party indemnifies the other party in the amount not exceeding the equivalent of three month’s gross wages.

Meanwhile, a worker may be granted a work permit for all term and non-term contracts if it is determined that the employer has failed to meet legal and contractual obligations, including but not limited to when the employer fails to pay the worker’s wages for more than 60 days.

A worker may also be granted a permit if the labour ministry confirms that the employing company has not provided work due to the firm being inactive for more than two months and, if the worker reports to the ministry during the company shutdown.

Work permits may also be issued in cases in which a labour complaint is referred by the ministry to the labour court and final ruling in favour of the worker who is terminated early or is owed outstanding wages less than two months of dues for end of service.

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