Labour and Employment Comparative Guide -

1 Legal framework

1.1 Are there statutory sources of labour and employment law?

Employment relationships in the United Arab Emirates are governed and regulated by the UAE Labour Law (33/2021) which is supplemented by UAE Cabinet Resolution 1/2022 (‘Executive Regulations').

The UAE Labour Law applies to all companies and employees in the private sector in the United Arab Emirates, including its free zones; save for the Dubai International Financial Centre and the Abu Dhabi Global Market, both of which implement their own employment laws.

The UAE Ministry of Human Resources and Emiratisation (MoHRE) also frequently issues resolutions and decisions which affect employers and employees across the private sector in the United Arab Emirates.

1.2 Is there a contractual system that operates in parallel, or in addition to, the statutory sources?

All employees in the United Arab Emirates must enter into a written employment contract.

Where an employee is employed by a company registered with the MoHRE, the employee must enter into a dual-language (Arabic/English) employment contract in a form prescribed by the MoHRE (‘MoHRE employment contract').

Similarly, some free zones require employees to enter into a dual-language (Arabic/English) employment contract in a form prescribed by the relevant free zone authority (‘free zone employment contract').

The MoHRE employment contract and the free zone employment contract contain only basic information and cannot be materially amended. It is therefore common for UAE employers to implement an additional English language company employment contract (‘company employment contract'), which contains additional and more sophisticated terms and conditions – for example, provisions relating to:

duties;
bonuses;
incentive arrangements;
confidentiality; and
obligations before and after the termination of employment.

While the MoHRE employment contract and the free zone employment contract are typically recognised by the UAE labour courts as the operative employment contract, the terms of a company employment contract will be enforceable as long as they do not seek to exclude the rights or entitlements afforded by the UAE Labour Law.

Where there is a discrepancy between the terms of two employment contracts, a UAE labour court will typically apply the term which is more beneficial to the employee.

1.3 Are employment contracts commonly used at all levels? If so, what types of contracts are used and how are they created? Must they be in writing must they include specific information? Are implied clauses allowed?

All employees in the United Arab Emirates must enter into a written employment contract.

All employees must be employed on fixed-term employment contracts not exceeding three years. Employment contracts may be extended for the same or a shorter period, either expressly or – if the parties simply continue to perform the employment contract – automatically.

The UAE labour courts typically place sole reliance on express written contractual terms and do not normally imply terms into employment contracts.

The UAE Labour Law states that employment contracts must include:

the name and address of the employer;
the name of the employee;
the employee's nationality;
the employee's date of birth;
the term of the contract;
the role or job title;
the commencement date;
the place of work;
working hours;
rest days;
any probationary period;
annual leave;
wages (including benefits and allowances); and
the notice period.

In practice, the inclusion of some of these particulars (eg, the employee's nationality and date of birth) is not rigorously enforced.

2 Employment rights and representations

2.1 What, if any, are the rights to parental leave, at either a national or local level?

All new mothers are entitled to:

up to 60 calendar days' maternity leave with 45 days at full pay and 15 days at half pay;
45 calendar days' unpaid leave if they suffer a pregnancy-related illness; and
30 days' paid and 30 days' unpaid leave if their child is born with a disability.

For a period of six months following the date of delivery, employees are entitled to two breaks of 30 minutes each for breastfeeding. In practice, most employers provide this as one hour and permit the employee:

to start work an hour later or leave work an hour earlier; or
to have a two-hour lunch break.

All new mothers and fathers are entitled to five days' parental leave at full pay, to be used within six months of the birth of their child. This parental leave is in addition to the mother's entitlement to statutory maternity leave.

Many employers in the United Arab Emirates offer enhanced maternity leave and benefits, although there is no statutory obligation to do so.

2.2 How long does it last and what benefits are given during this time?

See question 2.1.

2.3 Are trade unions recognised and what rights do they have?

Trade unions are not formally recognised in the United Arab Emirates, although the UAE Labour Law contains a mechanism by which groups of employees may raise collective grievances with the UAE Ministry of Human Resources and Emiratisation (MoHRE).

2.4 How are data protection rules applied in the workforce and how does this affect employees' privacy rights?

The United Arab Emirates recently issued the UAE Data Protection Law (45/2021). The law creates a framework which seeks to protect the privacy of individuals by requiring organisations – including employers – to implement appropriate governance for the management and protection of personal data.

Many features of the UAE Data Protection Law are consistent with international data protection laws. In particular, data processing is prohibited without the consent of the individual, unless an exception applies. Consent must be given in a "clear, simple, unambiguous and easily accessible manner", and can be withdrawn by the employee.

Given that consent may be withdrawn by an employee, it is preferable for employers to rely on other available legal bases to lawfully process employees' personal data, such as the following:

"necessary to protect public health";
"necessary to protect the interests of the data subject";
"necessary to fulfil their obligations… in the field of employment"; or
"necessary to perform a contract to which the data subject is a party".

The legal bases being relied upon by an employer should ideally be set out in an employee privacy notice.

Employers that undertake background checks on new employees should also properly notify the employees of the basis on which their data will be stored and processed.

2.5 Are contingent worker arrangements specifically regulated?

Historically, the concept of contingent workers did not exist in the United Arab Emirates due to the rigid nature of the labour and immigration framework, which envisaged full-time employees working only for an employer which sponsored them for their UAE residence visa. However, this inflexible approach is changing.

The Executive Regulations refer to the availability of a ‘self-employment permit' from the MoHRE, which would appear to allow individuals to engage with companies on a self-employed basis without being sponsored (and therefore employed) by that company for UAE residence visa purposes. However, at the time of writing, this permit is not readily available.

Similarly, a number of free zones in the United Arab Emirates have made freelancer permits available to individuals, allowing those individuals to undertake specific activities in the free zone without being sponsored by a particular company.

3 Employment benefits

3.1 Is there a national minimum wage that must be adhered to?

Currently, there is no national minimum wage in the United Arab Emirates.

However, an employee must earn a minimum of AED 3,000 per month (if the employer provides accommodation) or AED 4,000 per month (if the employer does not provide accommodation) in order to be able to sponsor his or her spouse or other dependent family members for a UAE residence visa.

3.2 Is there an entitlement to payment for overtime?

The maximum normal working hours permitted by the UAE Labour Law are:

eight hours per day (excluding one hour for lunch); and
48 hours per week (excluding one hour for lunch per day).

In addition to their normal working hours, employees are permitted to work up to two hours of overtime per day and may work a total of 144 hours in a three-week period.

Overtime pay should be calculated as follows:

the employee's basic salary, plus an uplift of 25% of the basic salary if the employee works overtime between 4:00 am and 10:00 pm; and
the employee's basic salary, plus an uplift of 50% of the basic salary if the employee works overtime between 10:00 pm and 4:00 am.

If an employee works on a rest day (as stipulated in the employment contract) or on a public holiday, the employer is entitled to choose between:

providing the employee with a day's holiday in lieu of the day worked; or
paying the employee his or her normal wage plus a 50% uplift to the basic salary for all hours worked by the employee on that day.

3.3 Is there an entitlement to annual leave? If so, what is the minimum that employees are entitled to receive?

An employee is entitled to the following minimum annual leave entitlements:

two calendar days per month for employees who have completed more than six months but less than one year of service with the employer (although most international employers in the United Arab Emirates provide employees with leave in their first year of employment, calculated on a pro rata basis according to their full annual leave entitlement); and
30 calendar days per year for employees who have completed more than one year of service with the employer.

The minimum entitlement of 30 calendar days' annual leave is generally accepted in the United Arab Emirates as equating to 22 working days (which is now the more common method of expressing an individual's annual leave).

An employee is entitled to be paid for all his or her accrued untaken annual leave upon termination of his or her employment.

In addition to annual leave, all employees are entitled to paid leave on UAE public holidays announced by the UAE government. Where a public holiday falls on a weekend and/or an employee's normal day of rest, there is no obligation on the employer to provide the employee with a day's additional leave in lieu of that public holiday.

3.4 Is there a requirement to provide sick leave? If so, what is the minimum that employees are entitled to receive?

Once a new employee has successfully completed his or her probationary period, he or she is entitled to 90 calendar days' sick leave per year of service. The employee will be entitled to sick pay as follows:

full pay for the first 15 days;
half pay for the next 30 days; and
no pay for the remaining 45 days.

An employee will not be entitled to receive any sick pay if the sickness arises:

from the use of narcotics or alcohol; or
as a result of any breach by the employee of the employer's health and safety policy.

An employer is permitted to terminate the employment of any employee who has exhausted his or her statutory sick leave and fails to return to work.

3.5 Is there a statutory retirement age? If so, what is it?

There is no statutory retirement age under the UAE Labour Law.

4 Discrimination and harassment

4.1 What actions are classified as unlawfully discriminatory?

The UAE Labour Law does not specify the types of actions which are considered unlawfully discriminatory.

4.2 Are there specified groups or classifications entitled to protection?

Any rules and procedures which have the aim of enhancing the employment of UAE nationals will not be regarded as discriminatory.

Ministerial Decision 212/2018 on the Regulation of Employing Nationals in the Private Sector was introduced to control the circumstances in which UAE nationals may be dismissed.

Employers must undertake exit interviews with UAE nationals and submit details of the interview to the UAE Ministry of Human Resources and Emiratisation (MoHRE), confirming the reasons for the dismissal.

The dismissal of a UAE national will be regarded as unlawful if:

the termination is not for a reason falling under the UAE Labour Law;
a non-UAE national is performing the same role and duties as the UAE national, or it can be evidenced that the reason for termination was to replace the UAE national with a non-UAE national;
the reason for termination is unrelated to the employee's work;
the reason for termination is due to the UAE national filing a complaint with the UAE authorities; or
the employer fails to submit details of the exit interview to the MoHRE.

4.3 What protections are employed against discrimination in the workforce?

The UAE Labour Law prohibits discrimination on the grounds of race, colour, sex, religion, national origin, ethnic origin or disability. Women are also entitled to receive equal pay to males who undertake the same work.

The UAE Discrimination Law (2/2015), as amended, prohibits discrimination based on religion, creed, doctrine, sect, caste, race, colour or ethnic origin.

Breaches of the UAE Labour Law and/or the UAE Discrimination Law can result in imprisonment and/or heavy fines of up to AED 10 million.

4.4 How is a discrimination claim processed?

A complaint of discrimination under the UAE Labour Law can be filed with the MoHRE and then progressed via the UAE courts.

Alternatively, a criminal complaint of discrimination under the Discrimination Law may be filed with the police, which will refer the matter to the public prosecutor, who will determine whether to prosecute the alleged offender in the UAE criminal courts.

4.5 What remedies are available?

There are no specific financial remedies available to victims of discrimination under the UAE Labour Law or the UAE Discrimination Law; although it is open to a victim to pursue a civil claim for damages against an individual who has caused them harm.

4.6 What protections and remedies are available against harassment, bullying and retaliation/victimisation?

The UAE Labour Law specifically prohibits sexual harassment, bullying or any verbal, physical or mental violence against employees by an employer, the employee's manager or any co-worker.

The UAE Penal Code (31/2021) also makes sexual harassment a criminal offence.

There are no specific financial remedies available to victims of harassment, bullying or victimisation under the UAE Labour Law or the UAE Penal Code; although, as set out in question 4.5, it is open to a victim to pursue a civil claim for damages against an individual who has caused him or her harm.

5 Dismissals and terminations

5.1 Must a valid reason be given to lawfully terminate an employment contract?

An employer must have a valid reason for terminating an employment contract, failing which the employer will be exposed to a successful claim of arbitrary (or unfair) dismissal.

A valid reason for termination is either:

one that is specifically referred to in the UAE Labour Law, such as:
- the permanent closure or bankruptcy of the employer;
- the expiry of the term of the employment contract;
- the conviction of the employee of a custodial sentence of more than three months;
- where the employee ceases to hold the requisite authorisation to work in the United Arab Emirates; or
- where the contract is terminated by mutual written agreement; or
one that is misconduct or performance-related.

5.2 Is a minimum notice period required?

After completion of an employee's probationary period, the parties must normally give each other a minimum of 30 days' notice to terminate the employment during the term of the employment contract.

The parties may agree a longer notice period in the employment contract up to a maximum of 90 days.

The UAE Labour Law contains a list of limited circumstances in which an employer may terminate an employee without giving any notice, including the following:

The employee assumes a false identity or submits false documentation;
The employee commits an error causing material losses to the employer;
The employee breaches the health and safety rules of the employer;
The employee fails to perform his or her duties in accordance with the employment contract despite two prior written warnings;
The employee discloses trade secrets or intellectual property which results in losses for the employer;
The employee is found during working hours to be drunk or under the influence of drugs, or commits any other act against the morals of the workplace;
The employee commits a verbal, physical or other assault against the employer, a manager or a co-worker;
The employee is absent from work without lawful excuse for a period of more than seven consecutive days or 20 intermittent days in a year;
The employee abuses his or her position for personal gain; or
The employee joins another employer without complying with the relevant rules and regulations.

An employee may also terminate his or her employment without notice in circumstances where:

the employer commits a breach of its legal obligations to the employee; or
the employee is subjected to harassment or violence by the employer.

In such case the employee must report the matter to the UAE Ministry of Human Resources and Emiratisation in accordance with the UAE Labour Law.

In practice, both employer and employee must meet an extremely high threshold in order to justify termination of employment without notice.

5.3 What rights do employees have when arguing unfair dismissal?

If an employee succeeds with a claim for arbitrary (or unfair) dismissal, he or she may be awarded compensation of up to three months' pay (in addition to any other outstanding contractual and statutory entitlements). In determining the amount of compensation, a UAE court will have regard to:

the harm suffered by the employee; and
his or her length of service.

5.4 What rights, if any, are there to statutory severance pay?

Foreign employees with more than one year's service are entitled to statutory severance pay, calculated as follows:

21 days' basic pay for each year of service for the first five years; and
30 days' basic pay for each year of service after five years.

An employee's statutory severance pay is capped at two years' total wage (basic pay and allowances) and should be pro-rated in respect of part-years worked.

6 Employment tribunals

6.1 How are employment-related complaints dealt with?

To file a labour complaint, an employee must first:

register a complaint with the UAE Ministry of Human Resources and Emiratisation (MoHRE); or
if applicable, register a complaint with the authority of the free zone in which the employer is located.

The MoHRE or free zone authority will attempt to mediate the dispute and may also provide recommendations as to how the matter should be resolved.

If the matter cannot be resolved amicably, the MoHRE or free zone authority will refer the matter to the UAE Labour Court.

6.2 What are the procedures and timeframes for employment-related tribunals actions?

The key features of UAE Labour Court proceedings are as follows:

All proceedings are conducted in Arabic.
All documents submitted to support a claim or defence must be legally translated into Arabic.
Only advocates who are registered with the UAE courts have rights of audience.
A power of attorney must be issued by a party to proceedings to his or her legal representatives and filed with the UAE Labour Court to enable the legal representatives to participate in the proceedings.
There is no duty of full disclosure (ie, in the absence of a court order, parties are not required to disclose documents that do not support, or otherwise undermine, their case).

The UAE Labour Courts rely heavily on the parties' written submissions and there is very limited opportunity for oral evidence (if any).

The proceedings will be progressed through a series of hearings, during which each party submits a written memorandum with supporting evidence. Each party will be given the opportunity to reply to the other's memorandum. Once the court is satisfied that it has a complete picture of the case, it will reserve the matter for judgment.

If the court considers that the claim or a particular issue requires further investigation or analysis, it has absolute discretion to appoint an expert to investigate any particular aspect of the case. The expert has a broad remit, which may include:

visiting the parties' premises;
requesting certain documentation for review; and
interviewing party representatives.

Written submissions can also be made to the expert. The expert will then prepare a report of his or her findings, which will be submitted to the court. The parties will have the opportunity to reply to the report prior to the matter being reserved for judgment.

After the first court's judgment, a party will have 30 days to appeal to the Court of Appeal. There may be a further opportunity to appeal to the Dubai Court of Cassation or the Federal Supreme Court.

7 Trends and predictions

7.1 How would you describe the current employment landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The labour market in the United Arab Emirates is becoming increasingly regulated, as reflected by the recent introduction of the UAE Labour Law in February 2022, replacing the previous labour legislation which was in place since 1980.

One of the principal drivers behind the recent legislative changes is to make the labour market more flexible and adaptable, having regard to the increased prevalence of flexible working, such as part-time work and remote working arrangements. We therefore anticipate further developments to facilitate atypical working.

The other key issue which is, and will continue to be, high up the agenda of the UAE government is increasing the employment of Emiratis in the private sector through its programme of Emiratisation. We expect there to be increased focus on incentivising private sector companies to employ Emiratis, along with further regulation around the ongoing employment of Emiratis generally.

8 Tips and traps

8.1 What are your top tips for navigating the employment regime and what potential sticking points would you highlight?

Our top tips for navigating the employment regime in the United Arab Emirates are as follows:

UAE federal law is drafted in Arabic. Arabic does not always translate easily into English, so it is important not to place sole reliance on an English translation of the UAE Labour Law. If necessary, seek assistance from an Arabic speaker to ensure that you understand the exact meaning of a particular article or provision.
Have regard to local customs and cultures at all times when dealing with sensitive employment issues.
Do not assume that a UAE court will approach an employment dispute in a way which is remotely similar to the approach typically taken by a court in your home jurisdiction.
Everything agreed between an employer and an employee must be recorded clearly in writing.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

United Arab Emirates: Labour and Employment Comparative Guide