The following update provides an overview of Federal Decree-Law No. 14/2022 concerning amending some provisions of Federal Decree-Law No. 33/2021 regarding the regulation of labour relations.
The UAE government has recently updated Clause (3) of Article (8) of the Federal Decree-Law No. 33/2021, Regulating Labor Relations (the Labour Law), by issuing Federal Decree-Law No. 14/2022 (the Amendment). The Amendment revises a previous requirement which stated that employment contracts in the private sector were limited to a maximum of three years.
Through the above Amendment, employers and employees will no longer be bound by the maximum three-year limitation to employment contracts. The employment contract must still be for a defined time-period; however, this time-period is no longer capped, and it can be at whatever the parties deem to be suitable in the circumstances. The Amendment will apply to the private sector in all areas of the UAE, save for the Dubai International Financial Center (DIFC) and Abu Dhabi Global Markets (ADGM) Freezones. This Amendment will not apply to the public sector, nor to domestic workers.
The Amendment means that parties will now have more flexibility and stability when negotiating an employment contract, as well as providing employers and employees more protection and security. Employees will now have the added advantage of knowing they have job security and the employer benefiting from having an employee they have trained and assisted in development, staying with the company. There will also be the added advantage of encouraging investment and productivity in the market.
The Amendment further highlights the UAE governments continued desire to ensure it meets its future development goals by creating a balance in the workforce and the employer/employee relationship and by making the UAE an even more attractive option for workers.
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