UAE: Decrees Designed to Promote Labor Mobility, Protect Employment Terms Issued

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by Jenny David

Nov. 23— Three ministerial decrees intended to promote labor mobility and ensure that employers cannot unilaterally change the employment conditions of foreign workers will take effect in the United Arab Emirates on Jan. 1. The new decrees—numbers 764, 765 and 766—amend Federal Labor Law No. 8 of 1980.

The decrees are a “welcome change” that will “provide a fair balance of protection for employees, while clarifying employers' legal obligations,” according to Anand Singh, an associate at Kennedy's Dubai LLP.

Most importantly, the decrees will make it easier to switch jobs, especially for less skilled workers, and aim to prevent a much-criticized practice of changing the employment terms promised to prospective workers abroad when they arrive in the UAE, according to Sara Khoja, a partner in the Dubai office of Clyde & Co.

“The new rules will bring greater transparency, clarity and tighter monitoring of labor contract conditions and ensure both employer and employee enter into fully voluntary relationships,” the Labor Ministry said in a statement.

Clear Conditions of Employment

Decree 764 seeks to ensure that workers are fully informed of the contractual terms and conditions of their employment before moving to the UAE or leaving one UAE employer for another. The decree will require employers to provide prospective employees from abroad with a standard offer letter containing “clear and enforceable terms and conditions of employment.” The signed offer must be filed with and approved by the Labor Ministry, and the contract subsequently issued to the employee must accurately reflect the offer's original terms.

On renewal, existing contracts cannot be altered unless the change benefits the employee, is made with his or her agreement and is approved by the ministry.

The ministry has promised to release a revised standard contract for use beginning Jan. 1 that will include more information on the minimum employment conditions provided by the Federal Labor Law.

Detailed Termination Procedures

Decree 765 details termination procedures for employers and employees, increases employers' liability for termination, differentiates between limited-term and open-ended contracts, reduces the maximum duration of a limited-term contract from four to two years and stipulates that notification of termination must be given three months in advance unless otherwise specified in an employment contract.

Contracts can be terminated at any time by either party as long as contractually agreed notice is given and the terminating party honors the contractual obligations for the duration of the notice period, including full payment of salary. In the case of open-ended contracts, an employee can end employment if the employer fails to fulfill its obligations—for example, by not making timely wage payment for 60 days or more—or if the employing business has been inactive for more than two months.

If the employer or the employee terminates the contract without following the legally specified procedure, the wronged party can take legal action for redress.

Permits for New Employment

Decree 766 will increase employees' ability to move between UAE employers by eliminating a previously imposed six-month employment ban before the issuance of a new work permit. An employee will be allowed to change jobs as long as the employee has met all contractual and legal obligations. An employee who has not fulfilled contractual obligations, however, could be blocked from taking another job for 12 months.

Unskilled laborers must have been employed for at least six months before requesting a transfer. There is no minimum service requirement for skilled workers, but they must have a valid reason for requesting a new permit.

The new decree also revokes an earlier rule that allowed an employee to seek a new permit to work for a new employer only when his or her existing employment contract expired.

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For More Information

For more information on UAE HR law and regulation, see the UAE primer.

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