The United Arab Emirates has continued its efforts to enhance the attractiveness of its private sector and to reduce the gap in rights and privileges between employees in the public and private sectors, thus reinforcing the foundations of social justice in the national economy. Recent legislation has largely eliminated differences between the two sectors, particularly in terms of holidays, end-of-service benefits, promotion systems, and direct support for localization efforts.
The issuance of the new labor relations law for the private sector, which will come into effect on February 2, marks a new precedent in the labor market of the UAE. This is due to the set of privileges and rights outlined for foreign workers, which are similar to those specified for foreign workers in the federal government’s human resources law.
The new labor relations law confirms that foreign workers who work full-time and have completed a year or more of continuous service are entitled to an end-of-service benefit upon the termination of their service. This benefit is calculated based on the basic salary, amounting to the equivalent of 21 days' wages for each of the first five years of service, and 30 days' wages for each additional year thereafter.
In the same context, the law states that private sector workers are entitled to paid leave under several circumstances, including a 5-day bereavement leave upon the death of a spouse, and 3 days in the event of the death of a parent, child, sibling, grandchild, or grandparent, starting from the date of death. Additionally, there is a parental leave of 5 working days for either the mother or father upon the birth of a child, which can be taken continuously or intermittently within 6 months of the child's birth, as well as any other leaves decided by the Cabinet.
Workers are also allowed to take a study leave of 10 working days per year for those enrolled in accredited educational institutions to take examinations, provided they have been employed by the employer for at least two years. UAE nationals are entitled to unpaid leave for national service obligations, subject to providing proof from relevant authorities.
The new law requires employers to establish work regulations, including guidelines for disciplinary actions, promotions, bonuses, and others. It also mandates the provision of suitable housing for employees or compensation for housing. The law exempts labor lawsuits from judicial fees at all stages of litigation and enforcement for claims raised by workers or their heirs, as long as the claim does not exceed 100,000 dirhams.
This law adds to a series of legislations that the state has adopted over recent years, providing a comprehensive protection system for private sector employees similar to that of their public sector counterparts, especially in employment, wages, housing, and health.
Since September 2020, the UAE has been implementing amendments to some provisions of Federal Law No. 8 of 1980 regarding labor relations, which stipulates that women should receive equal pay to that of men if they perform the same work or work of equal value.
In 2015, the Ministry of Human Resources and Emiratization issued three ministerial decisions aimed at ensuring voluntary relationships between workers and employers, improving transparency in terms of job opportunities and employment contracts. The decisions stipulate that potential workers must sign a standardized job offer in their home country, which is then deposited with the Ministry of Human Resources and Emiratization before a work permit is issued. Once the worker arrives in the country, this agreement is considered a legal contract, and any changes to it may only include additional benefits approved by the worker.
Under these decisions, either party has the right to terminate the contract, and the worker enjoys the freedom to transition to a new employer after termination, while the wage protection system ensures that wages for private sector workers are paid regularly according to set deadlines.
