United Arab Emirates: Labour Law In The UAE

Last Updated: 27 February 2012
Article by Hassan Elhais

The following essay discusses briefly the important aspects of Labour Law in the UAE.

Introduction

Labour cases in the UAE are governed by Federal Law No. 8 of 1980 Regulating Labour Relations as amended by Federal Laws No. 24 of 1981, No. 15 of 1985 and No. 12 of 1986 (the "Law"). According to Article 3 of the Law, the law applies to all employees and workers in the UAE including UAE nationals and expatriates. It should be noted that partners in a business are not considered as 'employees'; instead they are treated as 'investors' in their businesses. However, if the partner holds an employee position, additional to his status as partner, he will be considered as an 'employee' working in the company. The Ministry of Labor and Social Affairs (the Ministry) is the main body responsible for regulating manpower recruitment and it facilitates to settle disputes between employers and employees.

Free-Zones and the Law

The employees in a freezone are sponsored by relevant free zone(s), and not their employers. Jebel Ali and Dubai International Free Zone have their own rules and regulations and they maintain their own employment contracts. However, the Law will still apply and the provisions should be in accordance with the Law. In the event of a dispute, the employees maintain their right of action against employers, not the relevant sponsoring free zone authority. It is advisable that employees' provide bank guarantees, to the relevant free zone authorities, in order to secure their dues and end of service incentive which may be payable upon termination of their employment contracts.

What does the Law encompasses?

The Law covers every aspect in relation to the employee-employer relationship including employment contract, wages, working hours, incentives, medical and social care, restrictions on the employment of women and juvenile, safety and protection of employees, penalties and employment related accidents, injuries and death.

Enforceability of the Law

The Law is Federal and it applies all the Emirates of UAE. It is enforced by the Ministry. All disputes relating to Labour matters must first be referred to the Ministry, if an amicable settlement is not reached, then the Ministry could delegate the matter to the court for litigation. Labour related disputes are adjudicated by the Ministry and the local courts of the UAE.

Termination of Contract

A contract may be terminated in the following circumstances:

  • If employee consents to cancel the contract in agreement with the employer.
  • If the term of the contract has ended, and it is not extended according to the implied and explicit provisions of the Law.
  • A contract may be terminated by one of the parties by serving a timely notice, provided that the parties observe the provisions of the Law and accept reasons to cancel the contract without prejudice.

There may be circumstances where an employer wants to terminate the contract without serving a timely notice and with immediate effect. As per Article 120 of the Law, the employer may dismiss the employee in the following cases:

  • If the employee was appointed under probation and was terminated before the end of probation period.
  • If the employee commits a mistake which causes substantial losses to the concerned employer, provided a notice was served to the Ministry within 48 hours.
  • If the employee fails to carry out his basic duties and obligations, after serving a written warning letter by the employer.
  • If he confides secrets of his establishment to a potential competitor.
  • If he is drunk or intoxicated during working hours.
  • If he physically assaults his employer or a manager or any colleague during work.
  • If he remains absent, without a legitimate reason, continuously for 20 days without giving any information to the employer.
  • If the employee violates safety instruction, provided those instructions were written and employee was made aware of those instructions orally if he is illiterate.

Dispute Settlement

As stated earlier, if there is a dispute between an employer and an employee, the case should be filed at Ministry and they will do their best to settle the dispute amicably. However, if the parties fail to reach a mutual agreement then Ministry will send an application to the Court, highlighting the dispute, and they will then adjudicate the matter. Both the parties will be summoned to state their respective arguments and then the court will schedule a hearing date and summon parties to hear the matter.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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