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Labor issues in the United Arab Emirates are regulated by Federal Law Regulating Labor Relations. Introduced in 1980, these regulations were subsequently amended in 1981, 1985, and 1986. The Law is applicable to the territory of the UAE except for some of the Free Zones where specific regulations are in action, such as Jebel Ali (Al Tamimi & Company par. 1-2).
As Article 3 of the Law states, all personnel working on the premises of the UAE are subject to these regulations. The nationality of the employees is of no significance as the personnel can originate from the UAE or be an expatriate. There are, however, several categories exempting the personnel from the Law’s scope. These include:
- Federal government employees and those hired by government departments;
- Those employed in municipal organs and assorted public sector establishments operating on the national and local scale;
- Those involved in nation-scale and local government projects;
- Armed force, police, and security officers;
- Domestic personnel, servants, etc.;
- Those employed in the sphere of agriculture and grazing (with the exception of technical staff and agricultural product processing employees) (Al Tamimi & Company par. 3-7).
Another exception is a business partnership. Partners in business are not considered as employees. Consequently, they are not mandated to receive a labor card in the Ministry of Labor – an obligation extending to all personnel (especially immigrants) not listed among the exemptions. Partners, specifically the foreign ones, are funded by the business they are partnered with. At that, the partner’s status will be that of an investor rather than personnel; the partners are obliged to make investments at least at a minimum level.
However, should the partner be registered as an employee in addition to their partnership status, they will be regarded as one. These considerations also apply to the personnel members working on a commission basis, regardless of whether they are partners to the establishment of hiring them (Employment Issues par. 5).
Free zones, such as Jebel Ali and Dubai Airport, have their own regulations to govern labor relations. Although the contract agreements originating from these zones are, naturally, the coinage of the zones’ regulations, their provisions must be consistent with the Law applicable nationwide. The wages, benefits, refurbishments, and other monetary expenses to provide for the employees are the free zones’ employers to avail. Such personnel, however, are provided for on condition that their dues and any payments after the agreement is ended are secured. In case a disagreement arises, the free zone personnel have the right to demand a court trial in accordance with the Law, despite the fact that the free zone establishments are sponsoring them (Howse et al. 266).
The Law accounts for every aspect of relationships existing between the employer and the personnel. The scope of coverage includes, for instance, conditions for employment, contract agreements and their termination, age- and gender-related restrictions, recording and filing, payroll, labor hours, leaves, benefits, compensations, penalties, condition safety, social support and medical care (including refurbishments for occupation-related disease and injuries), etc. The Law also prohibits the assemblage of labor unions.
The Law is enforced by the Ministry of Labor. With the exemptions stated above, it applies to all personnel employed on the territory of the UAE. Local courts have the power to litigate issues related to labor. However, because it acts as an enforcement agent, disputes on that matter should be considered by the Ministry.
Foreign labor employment
Considering that the UAE possesses an extremely vast base of multicultural human resources, the employers are put to face specific challenges related to such an environment, in addition to the difficulties common for all work givers.
The Federal Law Regulating Labor Relations has the employment of foreign workers as one of the aspects of labor governance. Firstly, for a business to be established within the UAE, the enterprise should register with the DNR (The Department of Naturalization and Residency) and the Ministry of Labor. These steps are taken so that the establishments can outsource and hire any human resources needed from both within the borders of the UAE and abroad.
If this business is established on the premises of a free zone, the procedural nuances differ. An establishment registered in the free zone should make a connection with the authorities of this zone to obtain visas and work permissions for the personnel. In most cases, the connection will be established and maintained between corresponding departments of the free zone authorities and the Ministry of Labor (Oxford Business Group 296).
Employment visa and residence permit are the documents necessary for a foreign employee to reside and work on the territory of the Emirates. If the LLC in question is headquartered in the mainland, its management is obliged to view and process these documents. If the employer is free zone-based, the corresponding department of its authority is tasked with processing. The documents are sponsored by the employer, which, again, should have a registration with the Ministry or a free zone authority.
The establishment of the free zones, as such, is known to facilitate human capital from abroad. For that sake, the regulations operable within the free zones are more flexible and differ from the mainland Labor Law to a certain extent. For instance, organizations such as DIFC (Dubai International Financial Center) are not legally obliged to provide a probation period for the workers. There is a recommended seven-day term in case the period specified in the contract is 3 months or less, a one-month term when the employment period is anywhere between 30 days and 5 years, and a 3-month term for an arrangement lasting 5 years or longer.
However, the recommendatory character of these terms subsumes the parties can agree for a different probationary period. Another aspect the employer and the employee can agree upon is the working hours: the mandated as 48 hours a week can be extended or cut with both parties’ consent. The free zone establishments calculate the ESG payments in much the same manner as the Law applied in the mainland. The law covering these zones, however, cannot allow for the payment to be cut if the worker commences the departure-related procedures. Moreover, the free zone employment law does not include any specific circumstances justifying summary dismissal.
The free zone employer can dismiss an employee with the cause for termination present. In other words, the law relies firmly on the employer’s reasoning, which is another demonstration of the law’s flexibility. Additionally, the free zone law has very clear specifications on the subject of discrimination, explicitly prohibiting any of it based on gender, socio-economic status, ethnicity, age, religious convictions, or disability (Hubbard and Gehle par. 6).
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In case an employee with no legal right to work on the premises of the UAE or its free zones is employed, the work giver is punished by a fine or jail term.
Employers’ and employees’ rights and duties
As part of the Emiratization program, it is the employers’ legal obligation to prefer the Emirati work force over the immigrants. Although the objective reality may differ from theory, the work givers cannot employ a non-UAE national where an Emirati employee could do the job. This duty of the employers is specifically applicable to the spheres of banking and insurance. The establishments that operate within these two spheres are required to meet yearly quotas for the number of UAE nationals employed (Toledo 40).
Other duties of the employers include the following. The work givers should provide the personnel with the employment contract, fixed working hours (maximum 8 hours daily), and payment for the overtime hours. Since 2014, the employers have a duty to provide the workers with health insurance covering the fundamental aspects of medical care. In case an employer has arbitrarily dismissed a worker, the latter should be provided with a refurbishment – an obligation for the employer to fulfil.
The rights of the employers include the following. The employers can terminate the contract on probationary period immediately when a delinquency or violation occurs; at that, the probation can last up to a half-year. An employer can reject a job applicant who refuses to undergo medical check-ups and alcohol and drug tests. They can also abstain from paying the employees when the latter are under post-termination covenants.
The employees’ duties are to adhere to the employers’ requirements concerning the compliance with the contract specifications. They must submit their applications and references to the Ministry or the relevant department of the free zone authorities for consideration. The employees have a duty to undergo medical check-ups and drug/alcohol tests (Howse et al., 265).
Their rights are somewhat more extensive. For one, they include being provided by the contract specifying the requirements they are supposed to follow, such as the parties’ names, the dates and statuses, the duration, the wages, work hours, vacations, sick leaves, vacation and sick payments, the probationary periods, disciplinary and grievance procedures, etc. Although the employer reserves the right to choose a UAE national instead of an immigrant worker, the employees have the right to non-discrimination based on gender, age, health and mental status, SES, and marital status.
The immigrant employees have a right to have their visas and residence permits sponsored by the employers. In relation to the working hours, no underage employee is obliged to work an 8-hour shift. Adults have a right to rest and pray during their breaks. At that, the restrictions concerning rest and breaks are compulsory. The payment for the overtime work is a right granted to all employees, although the calculations may differ. Concerning the leaves and absence, the employees have a right to yearly and sick leave.
The employees are not entitled to leaves other than these but the right to discuss the absence with the employer and come to an agreement on a specified period of absence time is permissible. Concerning the intellectual property (the items and techniques invented by the employees), the workers can claim the right to this property on some conditions, namely, when the invention (either an item or activity) is not within this employee’s scope of work or is usable within the employers’ scope of business. The latter condition can serve as a viable explanation of the resources being used for the invention (Howse et al. 260-269).
Al Tamimi & Company. “UAE Labor Law.” UAE Labor Law. UAE Labor Law, n.d. Web.
Employment Issues in the United Arab Emirates. 2nd ed. Los Angeles, CA: Latham & Watkins, 2014. Print.
Howse, Matthew, Walter Ahrens, Sabine Smith-Vidal, and Mark Zelek. Labour & Employment in 39 Jurisdictions Worldwide. London, UK: Getting the Deal Through, 2014. Print.
Hubbard, Alison, and Björn Gehle. “Employment issues in The United Arab Emirates.” Out-Law.com. Pinsent Masons LLP. 2012. Web.
Oxford Business Group. The Report: Dubai 2014. Dubai, OAE: Oxford Business Group, 2014. Print.
Toledo, Hugo. “The political economy of emiratization in the UAE.” Journal of Economic Studies 40.3 (2013): 39-53. Print.