Contractual Changes and Updates: UAE Labour Law 2023

uae labour law 2023

The UAE labor law 2023 brings a series of updates and changes, which affect both employers and employees. This is for those who work in the private sector as well as in the public sector. All these changes are to improve working conditions. Not only that, but also protects the rights of workers of all industries, and promotes innovation and competitiveness. It is common knowledge that entrepreneurs want their businesses to grow, which is why it is important to adapt to the new realities of the market. This law also initiates for this additional reason.

In this article, we will analyze some of the most relevant aspects of the changes and updates of the UAE labor law 2023. Specifically, you will see two points of great importance for all companies. The first is the entire process for resolving labor disputes. You will see all the steps to follow and who you should go to. The second point is everything regarding contracts and job categories. In addition, we will offer some interesting and practical recommendations for employers and employees to implement effectively.

Labour dispute resolution mechanisms

uae labour law 2023

According to the UAE employment standards, when there is a breach of the terms of the employment contract, a complaint can be filed with the MoHRE. The employee may file this complaint, the employee’s beneficiary, or the employer. In addition, no rights claim will be recognized if a year or more has elapsed since the breach of contract occurred.

If the case goes to court, the employee can apply to the MoHRE for a temporary work permit. This way, while they seek a solution to the case, you will be able to work for another employer. The labor laws of the UAE guarantee the rights of employees and employers. For this reason, both parties can submit a labor complaint to the MoHRE by following the appropriate steps.

It is important to understand that there are laws that regulate all employment complaints in the UAE. For this reason, to better understand Labor dispute resolution in the UAE, these laws should be taken into account:

Federal Decree-Law number 33 of 2021 (Regulation of labor relations in the private sector):  Here you can find that if there is a conflict between the parties, the Ministry has to receive the request. In this way, he will be in charge of examining the entire situation and will request to take measures to resolve it amicably.

Cabinet Resolution number 1 of 2022 (Regulation of labor relations):  All employees who have complaints or cases to the courts by the MoHRE, must quickly file a case and request the modification of their employment status. Among the Employee rights and obligations in Dubai, is to claim 2 months’ salary if you work for the employer while the referred labor dispute is in court.

Mediation & Conciliation Processes in UAE

This is a process that allows the parties to focus more on the commercial aspects than on the legal issues. It is important to understand that mediation is a completely voluntary process. In this way, it will not be possible without the commitment and participation of the parties involved. Also, if either party decides to withdraw, at that time the mediation will cease.

For these reasons, the parties must agree to start the process with the right mindset. Mediation is completely non-judgmental and confidential. In this way, whoever acts as a mediator must maintain the confidentiality of each party during and after the process. Thanks to this, the position of either party is not compromised if the mediation fails and the problem continues.

It should be understood that the mediation process does not require the parties to reach an agreement. For this reason, if the parties do not reach an agreement at the end of the process, it will simply go to the legal procedure stage. On the other hand, if the parties manage to reach an agreement, the terms that are established in said agreement must be written in an executable and binding contract.

This is a completely flexible process and allows the parties to maintain control while receiving the guidance of a neutral mediator. Likewise, the parties have full responsibility for their actions and any terms agreed upon at the end. In addition, It is important to note that mediators have full training to resolve these types of disputes.

Enforcement of Labor tribunal decisions

It is important to understand that there are workers’ legal protections and protections for employers. In this way, in the UAE the Labor Courts work in the same way as they do with other claims filed before them. In this sense, there are 3 stages to follow: The Court of First Instance, the Court of Appeal, and finally the Court of Cassation or Supreme Court.

At the time a UAE labor appeal court issues its judgment and in case an amount is awarded to the employee, the sentence may be executed immediately. This, without prejudice to any of the parties appealing the sentence before a Court of Cassation. In order for the sentence to be enforced or executed, you must go to an enforcement court and request that the sentence be executed.

Then, the Enforcement Court will notify the employer requesting the payment within 15 days of receiving the notification. It should be noted that it is very common for an employer to file complaints and objections to delay payment. However, the enforcement court has the power to impose certain determined measures. Where embargo of shares, bonds, bank accounts, etc. are included.

The aforementioned measures can last for months before finally concluding. For this reason, the Ministry of Labor introduced sanctions on any UAE entity that does not comply within 15 days with a court debt. In addition, the Ministry has the power to suspend the business license of a company for lack of cooperation or payment of a sentence issued by the Labor Courts.

Role of Authorities in Implementation

The functions of the relevant authorities in the UAE concerning labor disputes will depend on the nature and type of the dispute. Next, you will see some of the occupations depending on the disputes.

Individual labor disputes: The MOHRE or Ministry of Human Resources and Emiratization is the competent authority to receive and resolve labor complaints. They can be presented either by the employees or by the employees within 15 days following the fact in question. They take action if a friendly solution is not reached. The next step is to refer the dispute to the competent labor court.

Collective labor disputes: For these disputes, MOHRE establishes conciliation and arbitration committees. These will be made up of representatives of MOHRE, employers, and workers’ unions. The function of these committees is to try to resolve collective labor disputes through mediation and arbitration. Which is done within the month following its formation.

If a solution is not reached, MOHRE can intervene to resolve the dispute. Otherwise, they can refer to the competent labor court.

General functions: The first thing is that they must provide legal support to employees in labor care units and the courts. Depending on the case, they are in charge of exempting workers from paying legal fees for claims of less than 100,000 AED. In addition, they must receive and resolve individual labor complaints. These can come from both employees and employers, through the Ministry of Human Resources and Emiratization (MOHRE).

Finally, they have the function of establishing conciliation and arbitration committees to resolve collective labor disputes. Generally, it is between labor unions and employers.

Employment Contracts & Categories in UAE

uae labour law 2023

There are some new Labor Law Resolutions that MOHRE released. Among them are the modifications on, the skill levels. In total, there are five skill levels. The first is level 1, for people with a high level of education. The last one is level 5 and they are people with a very low educational level.

First level of ability: They are all people who have a university degree, specifically, a bachelor’s degree or higher qualification. That is, professional people. In the new resolution 765 of labor legislation, workers belonging to this level will not face a labor ban when changing jobs. They do have to prove that they met the notice period that you can find in the employment contract.

Second Skill Level: Individuals in this category are those who have a Diploma in any field. Generally, this category involves people who do technical and mechanical work. For instance, mechanical workers, ITI diploma holders, and more.

Third Skill Level: Individuals with a high school or senior high school degree will be classified as Skill Level 3. This category includes the following employees, Sales Representative, Sales Executive, Administration Receptionist, and more.

Levels 4 and 5: These are all those workers with a very low educational level. Generally, it includes housewives, cleaners, office workers, construction workers, loading and unloading employees, and other positions.

On the other hand, people who want to work in the UAE must not only know the categories of employees, they also have to understand the types of contracts. Depending on the sector in which you work, you have access to different types of contracts. It is part of labor rights in the UAE to understand all this information.

Limited Contracts vs. Unlimited Contracts

In the private sector, there are two types of employment contracts. The first is of limited duration or fixed duration. The second is the unlimited-duration contract. These labor agreements have main distinctions, in two basic respects.

Terminate contracts: For limited contracts, if an employee or employer wants to terminate the limited contract, they can do so. If the employer wants to terminate the contract, the employee has to request compensation for early termination. This, according to the UAE labor law 2023. In other words, the employee must receive three months of remuneration. This includes benefits and wages.

However, you have to keep in mind that this does not apply if the cause of dismissal is one of those specified in the UAE Labor Law 2023. Also, if the dismissal occurs when the employee is on trial, you will not be able to request compensation.

On the other hand, terminating an unlimited contract may be easier. In this case, if either party agrees to terminate the agreement, they must comply with the conditions for doing so. That is, the obligations of the notice period and provide a valid cause. This cause must be concerning employment.

End-of-service severance pay: Upon termination of an employment contract, the employee is entitled to a bonus. It is important to highlight that depending on the contract and the conditions of the dismissal, the compensation will vary. This, according to the UAE labor law 2023.

First, if the termination is by the employer, the employee has to complete a year or more of service to receive the payment. This will consist of 21 days of basic salary for the first 5 years of service. If, on the contrary, the termination by employee, if does not have more than 5 years of service, he does not receive a bonus.

Part-Time and Full-Time Employment

In the case of the public sector, labor contracts are those that appear in Cabinet Decision No. 13 of 2012. In particular, about the Regulation of Decree Law No. 11 of 2008. Of all these, the most common are full-time and part-time contracts.

It is important to highlight that, in the UAE labor law 2023, there are no differences between part-time and full-time jobs. In both, employees must have a guarantee that all their rights are fulfilled. Below you will see a description of full-time contracts and part-time contracts according to UAE Labor Law 2023.

Full-time contract: This contract is for employees who dedicate working hours or full days. They receive the total salary, benefits granted by the companies, and allowances. Currently, it is the most common working day in companies.

Part-time contract: When an employee works only a certain number of hours per business day, they have a part-time contract. In order for the contract to be part-time, the working day must be less than eight hours a day. Also, it is important to note that any UAE resident holding a valid visa can apply for a part-time job. The individual must be over the age of 18, but under the age of 65.

On the other hand, people who have a tourist or visit visa, cannot apply for a part-time job in the United Arab Emirates. Another good thing to clarify is that the law allows a worker to have both jobs. That is, a part-time and a full-time simultaneously.

Generally, people tend to confuse temporary contracts with part-time ones. Under the UAE Labor Law 2023, the main difference is that a temporary contract cannot be valid for more than six months.

Work hours and entitlements for Part-Timers & Full-Timers

Even though in the UAE labor law 2023 full-time and part-time workers are not legally differentiated, there are certain characteristics of each one that make them different. Next, you will see the most important aspects in which each of these differ.

Working hours: People who work part-time, their working hours are less than 8 hours a day. Whereas, if it were full-time, the working time would be 8 hours a day or 48 hours a week. Of course, according to the UAE labor law 2023.

Work permit: It is common knowledge that people with a part-time job may need to have more than one job. If that is your case, you require a work permit from MOHRE. In other words, part-time employees who want to have two employers simultaneously must have a MOHRE work permit.

Wages and salaries: The salary of full-time employees depends on the agreement between the employer and the same. However, it cannot be less than the one that MOHRE establishes. At the same time, the salary of the part-time worker depends 100% on the agreement between the two.

Rights and benefits: Benefits for full-time employees will depend on the agreement between the employee and the employer. Among the most common are accommodation, transportation, health insurance, annual vacations, and more. Of course, all follow the guidelines and conditions of the UAE Labor Law 2023. Similarly, the rights of part-time employees will depend on the contract between both parties. The difference is that it is not common to have access to the other benefits.

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