UAE Labor Law: Executive Regulations Published

​The executive regulations of the United Arab Emirates' new Labor Law have been passed via Cabinet Resolution No 1 of 2022. While the regulations do not provide all the answers employers had, they do provide much detail employers expected.

This article sets out 10 key need-to-know points about the new regulations.

1. New Work Permits Introduced

Under the regulations, the Ministry of Human Resources and Emiratization (MOHRE) will be able to issue a number of new work permits including, most significantly, the apparent introduction of a self-employed work permit, which lets individuals work "onshore" in the UAE without obtaining sponsorship from, or a work permit via, an onshore employer.

2. Additional Models of Work Introduced for Employees

Article 7 of the Labor Law established four types of work models that could be stipulated in an employment contract: (1) full-time; (2) part-time; (3) temporary; and (4) flexible work. The regulations have extended this to include: (5) remote work, where all work is performed outside the workplace and communication is electronic; and (6) job sharing, whereby tasks and duties are divided between more than one employee. MOHRE will make available template employment contracts for each work model.

3. Regulation of Recruitment Agencies

The regulations set out conditions that agencies must meet in order to obtain a license to practice recruitment activities, including participating in or providing outsourcing or temporary recruitment services. For example, an agency is required to give a bank guarantee of between AED 300,000 (approximately US$81,675) and AED 1,000,000 (approximately US$272,250) to MOHRE for the duration of its license. Agents must not supply employees to any entity that has been suspended by MOHRE and must inform MOHRE should they become aware of any breach of workers' rights by an entity to whom they have supplied employees.

4. Granting of New Work Permit Following Termination of an Employment Contract During Probationary Period

Typically, a foreign employee who leaves the UAE after terminating their employment contract during their probationary period will be prevented from receiving a new work permit for 12 months. However, under Article 11 of the regulations this restriction can be waived for individuals who fall into one of the following categories:

• Workers who possess the required skill, professional or knowledge levels of the UAE.
• Workers under the sponsorship of a family member.
• Holders of a Golden Visa.
• Any professional categories according to the needs of the labor market in the UAE, as determined by MOHRE.

5. Application of Noncompete Clauses

Article 12 of the regulations places limits on the application of noncomplete clauses. Such provisions may not have a term that exceeds two years and are conditional upon the nature of the work they attempt to restrict, which must be capable of causing serious harm to the legitimate interests of the employer. A noncompete clause will not apply if the contract was terminated within the probation period, as a result of the employer's breach, or where the employer terminates the contract. Importantly, the regulations also expressly provide that an employer must prove harm where it alleges breach of a noncompete clause. An employee may also be exempted from a noncompete clause if: (i) they or their new employer pays compensation to the former employer; or (ii) they belong to one of the professional categories identified by MOHRE as being needed in the UAE labor market.

6. Work Hours

The regulations stipulate that normal work hours be reduced by two hours during the month of Ramadan. Employees may work beyond normal work hours but shall not exceed a total of 144 hours every three weeks. Certain professions, including chairman, board members and individuals working on naval vessels, are excluded from the provisions on maximum work hours.

7. Workplace Health and Safety

Article 22 of the regulations sets out the health and safety measures an employer must implement in the workplace, including the supply of appropriate training and protective equipment to employees, first aid supervision, fire prevention, provision of health insurance and appropriate sign posting next to machinery or hazards. In the case of a workplace injury or occupational illness that was not the fault of the employee, employers will be responsible for the costs of treatment, including any necessary moving expenses.

MOHRE will control, inspect and apply administrative sanctions to establishments that fail to comply with the required health and safety standards.

8. Internal Work Regulations

The regulations require all establishments with more than 50 employees to establish an internal set of rules and procedures that cover employee instructions, promotions, bonuses, holiday entitlement and termination. In particular, these regulations should contain a list of sanctions that may be imposed on offending employees, and the conditions and rules for their imposition.

9. Disciplinary Actions Against Workers

Under the regulations, sanctions imposed on employees must be appropriate to the seriousness and gravity of the violation, taking into account its implications on the business' reputation, its financial, safety and confidentiality requirements, as well as whether criminal conduct was involved. The regulations give employees the right to be informed of and respond to any allegations of misconduct before any penalty is imposed under Article 39 of the Labor Law.

10. Collective Labor Disputes

The regulations set out the procedure that must be followed in the event of a dispute arising between an employer and a group of employees. Following a referral of a dispute, MOHRE may take any actions or measures that guarantee the payments of employees' entitlements.

The Collective Labor Disputes Committee has been formed by a decision of the UAE Cabinet. Any disputes that fail to reach settlement shall be referred by MOHRE to the committee, which shall issue a binding decision on the parties.

Benjamin Hopps and Stuart Paterson are attorneys with Herbert Smith Freehills LLP in Dubai, UAE. Emily Kemp, based in London, is a trainee solicitor and Dubai secondee with Herbert Smith Freehills. © 2022 Herbert Smith Freehills LLP. All rights reserved. Reposted with permission of Lexology.