It is the most significant amendment to the United Arab Emirates (UAE) labour legislation since 1980.

It applies to all employment relations in the private sector onshore in the UAE, and also in free zones that do not have their own labour laws, except from Dubai International Financial Centre or the Abu Dhabi Global Market, that have their own labour law regime.

The main changes set out in the new law can be summarised as follows:

1. Part Time and Flexible Working Arrangements: the law introduces new arrangements, such as part-time (working for one or more employers for a specific number of hours or days), temporary work and flexible work, where working hours and/or days of work depends on the employer’s workload and economic and operational variables of the employer.
2. Fixed Term Contracts: the term of fixed employment contracts must not exceed three years. The term may be extended or renewed, any number of times, for similar or shorter terms. Where parties do not expressly renew or extend the term but continue performing the contract, the term is deemed automatically extended on the same terms and conditions. Fixed term contracts can be terminated on notice during the course of the term for a legitimate reason (that the law does not define).
3. Termination during probation period: it introduces a notice period of 14 days prior written notice for terminating an employment contract by the employer during the probation period. The notice period for the employee that intend to terminate the contract during the probation period is the same (14 days) if leaves the UAE. If he wants to work for another employer in the UAE, it is at least one month.
4. Non compete clause: it allows employers to agree on non-compete clauses, enforceable for a maximum of two years after the expiry or termination of an employment contract, with their employees. Clauses must specify the place and type of work, to the extent necessary, to protect the legitimate business’ interests of the employer.
5. Termination of employment contracts: the law provides for a list of cases to terminate an employment contract, with or without notice. Where termination is found to be unlawful (a result of the employee filing a serious complaint against the employer or the employee filed a case against the employer which is successfully upheld), the Labour Courts may oblige an employer to pay compensation of up to three months’ total remuneration, considering the amount of damage sustained by the employee, length of service and type of worked performed.
6. Maternity, Parental and Additional Leave: Maternity leave has been increased to 60 calendar days. The law also introduces new leave categories: compassionate leave, parental leave (offered for both parents for five days for childcare in addition to the mother’s maternity leave) and study leave.
7. Discrimination and Equal Pay: the new law prohibits discrimination on the grounds of race, colour, sex, religion, national origin, social origin and disability that would impair equal opportunities for an employee and provides for equal pay for men and women for the same work.
8. Bullying and Sexual Harassment: it expressly prohibits sexual harassment, bullying or any verbal, physical or mental abuse against employees by their employer, manager or colleagues.

Executive regulations are expected to be issued by the Cabinet upon the proposal of the Minister of Human Resources and Emiratization.

Employers will have until 1 February 2023 to make the necessary changes to their employment contracts and policies according to the new provisions.

Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, said in a media briefing that the new decree law comes, in consultation with all parties concerned in the federal and local government sectors and the private sector, as part of the UAE Government’s efforts to ensure efficiency in the labour market and also attracts and retain the best talent and skills for employment.