3 Major Changes in UAE Labor Law That You Must Know in 2016

UAE Labor Law: Three new laws will cover the application process of the contracts approved by the Ministry, the conditions for employee termination and the new labor permits covering new employers.

New laws implemented by Dubai’s Ministry of Labour aims to create a stronger employee employer relationship and to improve the country’s labour market through greater transparency and allowing more room for worker mobility within the region.

Labour Minister Saqr Ghobash unveiled these rules which are founded on the labour policy initiative’s decisions in 2011 with regard to the labour mobility.

According to the ministry, ministerial Decrees 764, 765 and 766 focuses on improving labour relations by means of ensuring that legally sponsored employees will be governed by more stable regulations that will put the welfare of workers first stating that, “The new rules will also bring greater transparency, clarity and tighter monitoring of labour contract conditions and ensure both employer and employee enter into fully voluntary relationships”.

These decrees will see to the creating of a standard and unified labour contract.

Standard Work Contracts

Based on Ministerial Decree 764 of 2015 that governs standard employment contracts approved by the Ministry, any worker who receives an offer of employment should make sure that the contract presented confirms to the unified contract’s form and it should be duly signed.

Any contract renewal currently in force should use this new unified contract in addition to the offer of employment. Terms and conditions in such contract could not be substituted or altered unless there is an approval from the Ministry.

Unless approved by the Labour Ministry, clauses cannot be added to any of these contracts.

Termination of Work Contracts

A series of articles cover the conditions for terminating contracts with and without a term based on the Ministerial Decree 765 of 2015.

For contracts with a specified term of two years or less, contracts between the employee and employer is terminated upon expiration, through mutual agreement by both parties, or by means of a unilateral act for terminating the contract or the renewal as long as all legal consequences of early contract termination is met including the advance written notification of at least one month and it should not be longer than three months.

If the worker violates the Article 120 of the Federal Labour Law, the contract can be terminated based on these grounds.

In case of non-term contracts, termination can be done with the consent of both the employer and the employee. A notice of termination would be given by one party in advance for a period of at least one month as long as it does not exceed three months or when a party terminates the contract based on a unilateral act but it would not bear any consequences related to early termination.

If the Article 120 of the Labour Law is violated, the termination of a non-term contract can be completed.

Issuance of New Work Permits

According to the Ministry, the new conditions and rules outlined in the Article 1 of Ministerial Decree 766 of 2015 must be met for a new employer to issue a work permit to an employee.

New permits could be issued upon the employment termination upon the contract’s expiration whether the terms of employment is under a term or a non-term contract.

When both the employer and the worker consents, new permits can be issued upon the contract’s termination in the duration of the contract’s term so long as the worker completes an employment period of at least six months or when the worker has been classified by the Ministry under a skill se series.

This decree also emphasizes that issuance of new permits can be made to employees who were terminated by their employer without reason as long as six months service has been rendered.

If the Ministry classified the workers under Skill Level 1, 2 or 3 which implies that the worker has completed a university degree, holds a postsecondary diploma or is a high school graduate, this six-month rule can be waived.

Termination of term contracts can be made within a notice period of one to three months as long as the party who terminated the contract honours all contractual obligation outlined in the term duration or if the party who terminated the contract indemnifies the other for an amount which should not be worth more than the equivalent wages for three months.

If it can be proven that the employer failed to meet all obligations, whether it is contractual or legal in nature, work permits may be issued to workers whether they are bound by a term or a non-term contract. This includes but is not limited to the employer’s failure to pay the employee’s wages for over sixty days.

The Labour Ministry may issue a permit to a worker if it confirms that the employer was unable to provide work to an employee due to inactivity of over two months or when the workers filed a report to the Ministry while the company was being shut down.

These work permits could also be granted when the Ministry refers a labour related complaint to the concerned court and rulings favoured the employee who has been a victim of early termination and who is entitled to receiving unclaimed wages worth less than his or her salary for two months as compensation for ending his or her service.

Objectives of the Ministry’s Three Decrees

In a statement, the Ministry of Labour clarified the purpose of its decrees stating that,”The primary purpose of the decrees is to delink sponsorship and labour relations. The former serves to secure legal entry and temporary residence in the UAE, while the latter is governed by an employment contract the terms of which are compliant with national labour legislation and regulation.”

The purpose set forth by the Ministry is achieved through the following:

  • Ensuring the transparency of the contracting process in the country of origin;
  • Ensuring non-substitution of the contract terms post arrival in the UAE;
  • Defining due processes for terminating labour relations;
  • Spelling out the rules and conditions for granting a worker whose labour relation has ended a new work permit.

1. Highlights of Ministerial Decree (764) of 2015 on Ministry of Labour-Approved Standard Employment Contracts

  • Standard employment offer/contract: terms, rights and obligations;
  • Informed consent;
  • Non-substitution of labour contract;
  • Filing the offer for eventual capture as a legal contract;
  • Termination clause;
  • Commitments by the employer.

2. Highlights of Ministerial decree (765) of 2015 on Rules and Conditions for the Termination of Employment Relations

Either party may opt for terminating their employment relationship subject to due process. No party will be forced to continue their relation involuntarily. Employment relationship may be terminated:

  • By mutual consent, at any time
  • By one party or the other, subject to certain considerations of notice and/or identification

The relationship would be deemed terminated in the following circumstances:

  • If employer does not meet its contractual obligation to worker;
  • If employer ceases to empower worker to perform his/her employment duties without; complying with due process;
  • If a worker absconds, without complying with due termination process.

A relationship can only be sustained by means of mutual consent. The means of termination can directly affect the worker’s status after the contract’s termination which includes whether a new work permitted will be issued or not.

3. Highlights of Ministerial Decree (766) of 2015 on Rules and Conditions for granting a permit to a worker for employment by a new employer

This decree sets certain conditions in granting work permits to employees whose employment has been terminated by their employer.

This puts an emphasis that the determination of the worker’s status whose employment already ended is a power that can only be exercised by a public authority.


h/t: Gulf News