Changes to employment law are quite significant and require changes to existing employment contracts as well as changes to policies and procedures regarding future agreements with new employees. The UAE government plans to issue implementing regulations to provide additional guidance on the new laws. We await the official publication of the new law and accompanying implementing regulations and will provide a further update on these changes in due course. At press time, the UAE federal government has also just announced a postponement of the working week for public sector employees from Sunday/Thursday to Monday/Friday. We will be publishing a separate [newsletter] on this subject shortly. If you have any questions about the new law or the postponement of the working week in the UAE and what this could mean for you or your business, please contact your usual HSF contact for assistance. The UAE`s new labour legislation brings important changes for affected employers. Employers should consider developing strategies to implement these new changes next year. On 15 November, it was announced that a new UAE labour law would come into force early next year.
Federal Decree No. 33 of 2021 on the Regulation of Industrial Relations (the new Act), which will replace Federal Law No. (8) of 1980, is expected to enter into force on 2 February 2022. This bulletin contains 10 important changes that will be implemented under the new legislation. The United Arab Emirates (UAE), which has significantly updated its business laws in recent years, has once again revised and refined the country`s business legal landscape. The enactment of a new Commercial Companies Law, which entered into force on 2 January 2022, as well as the announcement of the introduction of corporate income tax for fiscal years beginning on 1 June 2023, provide companies operating in the UAE with new elements to consider when setting course in a post-pandemic world. Here we summarize the main changes to the UAE`s new Commercial Companies Law and explain what is currently known about the upcoming corporate tax system. Article 13 of the new law sets out a number of obligations of the employer, including the obligation of employers to comply with internal labour rules. No further information will be provided.
Therefore, it is expected that future implementing regulations will set the framework and provide additional details on this requirement. Nevertheless, there are a number of important aspects that affected employers must consider, and changes must be made to contracts, policies and work practices. It is difficult to imagine how these new rules on dismissal during the probationary period will work in practice. The precondition for the MoHRE/free zone agreement remains in place. However, changes can now be made to the MoRE contract template, and there are different forms depending on the type of visa/work model. Important changes have been introduced with regard to compassionate leave rights, discrimination laws, termination of employment and non-competition clauses in employment contracts. The new law also allows companies to introduce part-time and flexible working arrangements. While the full impact of the myriad changes to UAE law is not immediately known, companies may want to hire short-term consultants to align their constitutional documents with the provisions of the new CDC. Businesses may also consider whether they want to make changes to existing ownership structures if they were designed to comply with previous versions of the Business Companies Act.
Here we summarize some of the most important changes to the legal framework. Below is an overview of the main changes to the UAE`s labour legislation. 10. Modification of the working time policy to reflect the overtime limit and changes in the calculation of overtime pay. Dr. Hassan Elhais, Legal Advisor at Al Rowaad Advocates, said the abolition of open-ended contracts, protection against discrimination and new working models such as flexible hours, part-time work and extra leave were the main changes. The main changes for all employers and employees, including those in the Islamic financial sector, include: In addition to the changes to labour law, the UAE government has changed the working schedule from Monday to Friday (with half a day on Friday) for all government employees. While not mandatory in the private sector, many private sector companies plan to introduce a Monday to Friday schedule to align with the government`s new schedule. The UAE also announced in early December 2021 a comprehensive social law reform programme and adopted a new Federal Law on Crime and Penalties, which changed the UAE`s stance on social issues. These changes, together with the trade adjustments discussed earlier and the recently described changes in labour law, can be seen as part of a concerted programme to bring the UAE into line with much of the rest of the world, both economically and socially.
We clearly hope that these changes will boost economic activity in the UAE and solidify the country`s position as one of the most important international trade centres in the next decade and beyond, and we expect these changes to be welcomed by companies and investors, as well as affected employees. Under the new law, dismissal is considered a valid reason for termination of an employment contract. Under the previous law, dismissal was not recognized. There are other grounds for dismissal for cause, including if an employee: (i) abuses his or her position for profit or personal gain; or (ii) accepts employment for another employer without complying with applicable rules and procedures. The changes introduced by Federal Decree No. 33 of 2021 were signed into law by President Sheikh Khalifa in November.
