Legal advisor Dennis Brand on what a review of the UAE's Labour Law will mean to you.
The Labour Law in the UAE has as its base the model law of the International Labour Organisation. Federal Law No 8 of the 1980 Regulating Labour Regulations as amended by Federal Laws No 24: 1981, No 15: 1985 and No 12: 1986 are together known as the Labour Law.
This governs most aspects of employer and employee relations, including hours of work, leave, termination rights, medical benefits and, where appropriate, repatriation. It is protective of employees in general and it is interesting to note that unless they are beneficial to the employee, the Labour Law will override any contractual provisions that are in conflict with it, even though they may have been agreed in another jurisdiction. Save for certain exceptions, such as government employees, the armed forces and police, all employers and employees in the UAE are subject to the Labour Law.
In early February 2007 the Ministry of Labour published a draft of the proposed new Labour Law, which is intended to replace Law No 8 of 1980 as amended. In order to promote discussion and input from the public, the Ministry published this draft law on its website.
The draft law retains many of the provisions of the existing Labour Law, but includes various changes. Some of the more important changes that are proposed will be discussed in this article.
The draft law provides (Article 15.2) that the validity of a non-national's employment permit shall be subject to a period of residence that must not exceed three years. However, it is permissible for that work permit to be renewed, on a once-only basis, for a further three years.
The draft law also provides that a non-national shall not be allowed to work or be granted a fresh employment permit until at least six months after the date of expiration of the existing one. Notwithstanding this, the draft law also provides that the Minister shall issue a resolution specifying the occupations and jobs that may be exempted from this provision.
The draft law also gives authority for the Minister to propose to the Cabinet minimum wages and cost of living allowances. This can be a general recommendation or for a specific area, profession or category of workers (Article 64).
Maternity leave (Article 31) is for a maximum period of 100 days; the first 45 days leave are to be on full pay and the balance of 55 days will be unpaid leave. In order to qualify for leave of 100 days the employee must have completed at least one year of continuous service with her employer. A worker who has not completed the required period of service will still be entitled to maternity leave, but at half pay for the first 45 days. Moreover, a worker who has exhausted her maternity leave may be absent from employment, without pay, for a further period of up to 45 consecutive or non-consecutive days if such absence is due to a maternity-related illness preventing her from resuming work after the appointed time.
As for holidays, the 10 days official holidays and 90 days sick leave as provided under the current Labour Law remain unchanged. But in respect of paid leave, the draft law (Article 78) provides that annual paid leave is reduced to 21 days and the unpaid Haj or pilgrimage leave is reduced from 30 days to 20 days (Article 90).
With regards to disciplinary matters, the draft law provides (Article 113) that no worker may be charged with a disciplinary offence after a lapse of over 60 days from the date it was detected. This provision also applies to the imposition of a disciplinary penalty, which may not be imposed after the date on which the inquiry into the offence ended and the worker was found guilty. This is a change to the current Labour Law, where the period is 30 days.
The draft law (Article 115.4) provides for termination of a contract of employment where the worker reaches 60 years of age. However, it also provides that the Minister may issue a resolution determining the provisions and cases where employment permits can be granted and renewed for workers who have reached that age should it be required.
The draft law (Article 115.5) also provides authority for employers to terminate employment contracts for economic, technical or structural grounds or in compliance with the requirements of Emiritisation. This is subject to the Ministry's approval that such termination is without prejudice to the worker's rights in respect of compensation in lieu of notice.
Article 124 of the draft law provides that where an employer has arbitrarily terminated a worker's service, the Labour Department may reinstate the worker. This is particularly the case if the termination was prompted by a formal complaint filed by the worker against the employer. Moreover, where the Labour Department orders that the worker be reinstated and the employer fails to do so, the maximum limit of compensation may be raised to six months salary, calculated on the basis of the worker's last wage (Article 125). This is an increase on the current Labour Law of a maximum of three months compensation.
In respect of a worker's end of service gratuity the draft law provides (Article 137) that it shall be calculated on the basis of 15 days wages for each of the first five years of service - a reduction from the current 21 days. However, the 30 days wages for each additional year of service will remain in accordance with the current law.
Although some of the changes proposed by the draft law have generated considerable comment, it is likely that it will undergo further modification before it is enacted.