New Labor Law:

New Labor Law: Positive move to attract global talent

On 16 November 2021, significant changes were announced to the employment law in the UAE. A new UAE Labour Law (Federal Decree Law No. 33 of 2021) was introduced, and it will come in force on 02 February 2022.

One of the main goals of the new law is to ensure the efficiency of the labour market in the UAE, which contributes to the attraction and retention of best future talent and skills. Further, it also aims to enhance productivity, flexibility, sustainability, and security for both employer and employees. With the said objectives clearly reflected in the new law, UAE is very likely to create more confidence in the minds of the global investors and thereby attracting foreign direct investments.

Following are some of the newly introduced articles / provisions:

• The employment contract is specified to be a period not exceeding three years and, by agreement of the parties, may be subject to renewal or extension. Therefore, the unlimited contracts have been discontinued on a going forward basis.
• As a step towards recognizing the need for flexible working structures, various models of work have been introduced (including but not limited to full-time, part-time, temporary, flexible).
• Another welcoming move are provisions related to anti-discrimination, harassment, and equality. It emphasizes on equal opportunities, access to jobs, and treatment of working women. It has specific provisions against the use of force, sexual harassment, and bullying against the employee or among employees.
• Non-compete clause is now more elaborated than the erstwhile provisions.
• New leave types have been introduced thereby entitling the employee to mourning, parental and study leaves. As the next steps, the authorities are expected to issue the Executive Regulations to provide clarity around various aspects of the new law (specially for the transition / implementation period).