Employment

Establishing employment relations properly, amending them in case of need, and, if necessary, terminating them in a fair manner

Regardless of whether you are an employer or an employee, we support you in all labour related issues, such as:

  • Drafting employment contracts, bonus agreements and employee handbooks
  • Advising on individual employment matters, such as end-of-service benefits and non-competition clauses
  • Assisting with the cancellation of employment relationships through termination notice or settlement agreement
  • Coordinating applications for residence visas and work permits

Overview

We have compiled notable facts regarding the employment law of the United Arab Emirates hereinafter:

1. Labour Regulations in the United Arab Emirates

The Labour Law of the United Arab Emirates ("UAE") can be considered rather employer-friendly. Amongst others, this principle is reflected by the stipulations concerning the termination of employment and the fact that neither trade unions nor work councils currently exist.

2. Legal Basis

Federal Law No. 8 of 1980 as amended ("UAE Labour Law") forms the primary legal basis with regard to the relation between employer and employee.

3. Creation of the Employment Relationship

When entering into an employment relationship, special attention needs to be paid to the drafting of the employment contract. Apart from local rules and regulations, the legal requirements of the home country of the employer and the employee may be taken into consideration should the employee work for a foreign parent company.

The employment contract may be concluded for an unlimited or a limited period. The kind of contract affects, inter alia, claims for compensation and gratuity.

Provisions of the employment contract may deviate from the UAE Labour Law only if they are in favour of the employee.

4. Terms of the Employment Relationship

Relevant aspects during the employment relationship are for instance:

a. Salary
The UAE Labour Law does not provide for a minimum wage. In general, the remuneration is divided into basic salary and various allowances.

b. Working Hours
Friday is the regular weekly holiday for all employees except for those who work on a daily basis. Governmental institutions remain closed on Fridays and Saturdays. The same applies for the majority of companies in the private sector. Retail outlets and restaurants, however, open seven days a week.

c. Public Holidays
The UAE Labour Law stipulates a number of public holidays, such as the Christian New Year (1st January), the UAE National Day (2nd December), the Islamic New Year, Prophet Mohammed's Birthday and the public holidays at the end of Ramadan.

d. Leave
An employee is entitled to a minimum of 30 calendar days annual leave provided his service exceeds one year. If the employee is employed more than six months but less than a year, the leave period amounts to two calendar days per month.

5. Termination of the Employment Relationship

The employment relationship ends in any of the following cases:

  • The parties agree to terminate the contract.
  • The validity of the contract expires.
  • One of the parties serves notice of termination.
  • The employee dies or is wholly disabled.

An employee who completes one year or more of continuous service is generally entitled to gratuity at the end of his service. Furthermore, he may claim payment in lieu of holiday, reimbursement of repatriation costs and/or damages.

Further Information

Practical Guidance: Payment of Allowances in the United Arab Emirates

AHK Legal Newsletter October 2017

Compulsory Health Insurance in the Emirate of Dubai

AHK Newsletter Law and Taxes, May 2015, p. 8 f.

Post-Contractual Non-Competition Clause according to the Laws of the United Arab Emirates

AHK Newsletter Law and Taxes, August 2014, p. 10 f.

Entitlements in case of Termination of Employment pursuant to the laws of the United Arab Emirates

AHK Newsletter Law and Taxes, August 2013, p. 5 f.