UAE Federal Law No.33 of 2021 (the "New UAE Labour Law") contains numerous references to "executive regulations", which have now been released in the form of UAE Cabinet Resolution No.1 of 2022 (the "Executive Regulations").
It was hoped that the Executive Regulations would clarify the areas of uncertainty in the New UAE Labour Law. In most instances, unfortunately this is not the case.
We have summarised below the key aspects of the Executive Regulations. We have not made reference to those aspects of the Executive Regulations which we do not consider will have a meaningful impact on the majority of employers in the UAE.
Summary of Executive Regulations
- A number of new work permits will be available from the Ministry of Human Resources & Emiratisation ("MHRE"). By far the most interesting development is the apparent introduction of a self-employed work permit, which permits individuals to work "onshore" without being sponsored by, or without being required to, obtain a work permit via, an onshore employing entity. This is a potentially significant development which mirrors the freelancer options which are available in some of the UAE's free zones. Details are yet to be released by the MHRE.
- New template employment contracts will apparently be available from the MHRE, including a flexible employment contract, remote employment contract and job-sharing contract.
- The Executive Regulations suggest that non-compete clauses will not be enforceable where the employer terminates the employee's employment.
- Employers with more than 50 employees must implement internal policies and procedures addressing issues such as working hours, holidays, disciplinary sanctions and health and safety. It is likely that most medium to large employers already have these types of policies and procedures in place.
- The limit on working hours will not apply to board members or employees in supervisory roles "who enjoy the powers of the employer".
- Importantly, the exemptions to the limit on working hours do not strictly apply to overtime pay, although it is unclear whether this was intentional.
- The Executive Regulations state that companies which undertake "technical" work may implement shift working patterns, provided employees' average working hours do not exceed 56 hours per week. It is assumed that employees who work shift work will still be subject to the maximum working hours limit of 144 over any three-week period.
- The Executive Regulations specify how to calculate annual leave for part-time employees.
- Disciplinary sanctions should be imposed having regard to, amongst other things, the impact of the employee's conduct on the employer's reputation, the financial impact of the employee's conduct on the employer, whether criminal conduct was involved and whether the employee's conduct impacted the health and safety of other employees.
- Before imposing any disciplinary sanction, an employer must notify the employee of the allegations against them, give the employee an opportunity to respond, investigate their response and, importantly, record the outcome of the disciplinary process in a report kept on the employee's personnel file.
- All disciplinary sanctions must be communicated to an employee in writing, include the reasons for the decision and explain the consequences of any repeat conduct.
- Employees have the right to appeal against any disciplinary sanction, which is a departure from the position under the previous labour law.
- Employers with more than 50 employees must implement a procedure by which employees can submit complaints or grievances.