UAE Labour Law Factsheet

01 Sep 2020

Workers in Dubai are split between those employed under an offshore regime and those employed under an onshore regime. If you are working onshore in Dubai, you will be subject to Federal Law No. 8 of 1980, as amended ("UAE Labour Law"). Offshore workers will be subject to their own free zone rules as well as the UAE Labour Law, except for the DIFC financial free zone which has its own Employment Law and Regulations which are similar to those in the UK.

The UAE Labour Law is regularly updated and amended but the key rights for workers and employers are as follows:

Maternity: Female workers are entitled to Maternity Leave and Pay under UAE Labour Law. After completing one year’s continuous employment, a female worker will be entitled to 45 days fully paid leave (if you do not have the necessary length of continuous employment you would only be entitled to 50% pay for 45 days). Companies will often have more favorable internal maternity policies, however, this is the statutory minimum.

Equal Pay: Whilst a number of discrimination protections are being introduced currently, equal pay rights are already stipulated under UAE Labour Law, requiring companies to pay women equally to their male counterparts for equal work.

Working Time: The UAE Labour Law imposes working time restrictions to 8 hours per day or 48 hours per week (save for certain industries). During Ramadan, working hours are reduced by 2 hours per day. Workers receive an additional 25% for overtime and 50% for night work.

Annual Leave: Workers are entitled to 30 days of paid annual leave per year once they have completed one year of continuous employment. The UAE also has the following public holidays; Hijra New Year, Christian New Year, Eid, Birthday of the Prophet, Ascension Day and National Day.

Sick Leave: Workers, who have completed probation are entitled to take up to 90 days (whether consecutively or intermittently) of sick leave per year, being entitled to full pay for the first 15 days and 50% pay for the next 30 days.        Any period exceeding this is without pay. If the sickness is due to misbehaviour (e.g. consumption of alcohol) you lose your right to be paid for such leave. After 90 days, your employer can terminate your employment contract.

Penalties: Your employer has the usual disciplinary rights and can issue a warning, suspension and in certain cases dismissal. However, the employer can also impose fines (up to 5 days salary) and forfeiture of promotions.

Termination: Employment can be terminated in one of three ways: (i) mutual consent, (ii) expiry of a fixed term or (iii) for cause. If a contract of fixed duration is terminated prematurely (other than for causes), the terminating party is liable to pay the other for compensation. In such a case, you could owe your employer up to 50% of 3 months’ pay, similarly, the employer  could owe you 3 months’ pay. If contract is of unlimited duration, and termination is arbitrary (i.e. not for one of the permitted causes or mutually agreed), the employer is liable to pay compensation to the worker of up to 3 months’ salary.

Notice: Under the UAE Labour Law, if you do not work your notice period or have unauthorised absences during your notice period, you can be prohibited from working in the UAE for one year. Further, the right to work is not protected in the same way as in other jurisdictions;  employers can require employees to refrain from working for competitors under non-compete clauses for a specified period of time.

Gratuity: It is commonly known that the UAE Labour Law provides a right to gratuity (21 days’ basic pay per year for the first 5 years of service and 30 days’ basic pay for each year of service thereafter), repatriation costs and a flight home at the end of your contract. However, there are restrictions, for example; the gratuity is generally capped at 2 years’ pay. Unless the worker under a fixed term contract has served 5 years, the right to gratuity is excluded altogether. Termination for cause or without notice will mean a forfeiture of the gratuity right and, your gratuity shall be reduced incrementally based on service if you are the one terminating the contract (by 66% if under 3 years’ service and by 33% if between 3 and 5 years’ service).