UAE Labour Law overview; Legal Advice Online
The Labour Law in the UAE regulated by Federal Law No: 8 of 1980 amended Federal laws no: 24/81, 15/85 and 12/86. They apply both to UAE and expatriates. According to the Article 3 of UAE Labour Law, it applies to all the staff and employees who works. It can be nationals or expatriates. Some of the categories like federal government, government departments of member emirates, municipalities, federal and public bodies, local public institutions, and local government projects are exempted from the law.
The law includes all kinds of employer-employee relationships. This include all employment contracts, restriction on employment of juveniles and women, record maintenance, wages, and all other aspects of the work.
The Labour Law is enforced by the Ministry of Labour and Social Affair. This is applicable to all the emirates of the federation. To employ the expatriate employee in the UAE, the application is to be made to the Ministry of Labour and should be approved before he/she enters the job. The validity is for 3 years and further renewal can be made.
For national employees, the employment contract can be made anytime. The labour permit for expatriates are not issued by the Ministry of Labour unless a written labour contract is filed with the Ministry in a fully formal way.
Contract of Employment
The two types of employment contract are limited employment contracts and unlimited contracts. Limited contracts are for a particular time with commencement and completion dates. The renewal can be done on a mutual consent for 4 years or lesser period. The termination of employment occurs once the contract period is over. Article 120 describes the termination procedures that are applicable by the law. If against this law happens, then compensation payment shall be done.
In the unlimited contracts, the employee will continue the work from a particular date till the employment contract is terminated by any party. It can only be done by giving prior notice. The exact completion date is not known. The termination of contract can be done by a mutual agreement by any of the parties with a 30 days prior notice. There will be change in the notice period for a daily wage working employee. The payment of employee shall be paid full for the notice period for the employees.
The information specified in the employment contract are:
- Date of employment contract
- Date of commencement of employment contract
- Nature of contract
- Category or designation
- Term of contract (for limited contracts)
- Compensation package
Article No: 37 of Federal Law No: 8/1980 states that “The employee may be appointed for a probationary period not to exceed six months, and the employer may terminate the services of the employee during this period without giving a notice or end of service remuneration. Appointment of the employee on probation basis in the service of one particular employer may not be made more than once. However if the employee passed the probationary period satisfactorily, and remained in service, such period of service shall be computed in the period of his service”.
Payment of Wages
As per the Labour law, the payment of wages is stated as: “Remuneration paid to the employee in return for his services under a labour contract, whether in cash or in kind; annually, monthly, weekly, daily, hourly, on a piece-rate, productivity linked”. The cost of living allowance, incentives, etc. are included in the wages.
Basic Wage is specified in the labour contract which are agreed between the parties for contract. It includes the calculation of end-of-service gratuity. Allowances for transportation, accommodation, housing and travel are not included in the basic wage.
No minimum wage is prescribed in the UAE Labour law. But an employee with a salary of Dhs 4,000 per month will not be able to sponsor resident visa for his spouse. The wages are paid in UAE Dirhams or any other currency. Only thing is that both the parties should agree regarding the type of currency. A writing evidence regarding the payment are to be kept for avoiding unnecessary disputes.
The working hours for an adult employee are 8 hours per day or 48 hours per week. People employed in hotels, trades, cafeterias and guards may get increased in the working hours up to 9 hours per day. Travelling to and from home are not included in the working hours. Employee shall not work for more than 5 consecutive hours per day without breaks. The breaks are not calculated in the working hours.
If overtime work is required, the employee gets paid for it. The payment shall be equal to the wage period for the ordinary working hours with an increase of not less than 25% of their wage. If the overtime falls between 9pm to 4pm, the employee gets paid equal to the normal working fours with an increase of not less than 50% of their wage.
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