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 and reviewing employment contracts, bonus agreements and employee handbooks
- Advising on individual employment questions, such as end-of-service benefits and non-competition clauses
- Assisting with the cancellation of employment relationships by termination notice or settlement agreement
- Coordinating visa-related matters
Labour Regulations in the United Arab Emirates
From a European perspective, the labour laws of the United Arab Emirates ("UAE") can be considered rather employer-friendly. Amongst others, this assessment is based on the stipulations concerning the termination of employment and the fact that neither trade unions nor work councils currently exist.
Legal Basis
Federal Decree-Law No. 33 of 2021 ("UAE Labour Law") forms the primary legal basis with regard to the relation between employer and employee since 02.02.2022.
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, legal requirements of the home country of the employer and the employee may have to be taken into consideration, in particular should the employee be seconded to the UAE.
The UAE Labour Law only provides for limited-term contracts. Existing unlimited employment contracts must be converted to limited-term contracts by 31.12.2023.
Provisions of the employment contract may only deviate from the UAE Labour Law if they are in favour of the employee.
Terms of the Employment Relationship
During the employment relationship, the following aspects are significant, amongst others:
a. Salary
In general, the remuneration is divided into basic salary and various allowances.
There is currently no statutory minimum wage. However, the UAE Labour Law provides for the possibility of setting one by cabinet resolution.
b. Working Hours
The employee must be granted at least one day of rest per week. According to the UAE Labour Law, this day does not necessarily have to be on Friday. Therefore, a six-day workweek basically prevails in the UAE. However, most companies in the private sector are closed two days a week.
A four-and-a-half-day workweek was introduced for the public sector on 01.01.2022. Saturday and Sunday form the new weekend and Friday is a half working day. The changes are not binding on the private sector.
c. Public Holidays
Employees are entitled to full pay on holidays officially announced for the private sector. To date, these include, for example, the Christian New Year (1st January), the UAE National Day (2nd December), the Islamic New Year and the public holidays at the end of Ramadan.
d. Leave
An employee is generally entitled to a minimum of 30 calendar days of annual leave. However, if the employee is employed less than a year but more than six months, the leave period amounts to two calendar days per month.
Termination of the Employment Relationship
Amongst other, 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 becomes 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.