Rachel Hill, Partner and Head of Employment, recently wrote a feature piece on Employment law in the United Arab Emirates for Legal 500 and their In-House Lawyer Summer 2023 Magazine.
Born and raised in Belfast, Northern Ireland, as a relatively green qualified lawyer I yearned for an environment that would offer greater opportunities for personal and professional growth.
Dubai, a gleaming oasis in the Arabian Desert, was that beacon of hope. Renowned for its rapid economic growth, cultural diversity, and thriving legal sector, the United Arab Emirates (‘UAE’) held the promise of a better future. With its flourishing economy and cosmopolitan atmosphere, the city seemed like the perfect destination to foster my career. It has been 14 years since I made that move to the UAE and it was the best decision I ever made.
The legal landscape is a dynamic and exciting domain, where local and international legal systems converge. With English being widely spoken and the presence of numerous multinational corporations, the UAE is an attractive hub of employment opportunity for expatriates, given the tax free salary, magnificent sunshine and competitive labour market. The UAE sits as a fairly central connection hub for the world and is therefore easily accessible for many individuals seeking to better improve their financial prosperity and future through either employment or investment opportunities.
The total expat population in the UAE has now come to around 9.8 million, which constitutes approximately 89% of the population. Emiratis or the UAE nationals are only 11% or 1.15 million today. The country, while relatively small, is full of personality and continues to prosper and thrive following a difficult pandemic period where the employment regulator, the Ministry of Human Resources and Emiratisation, together with the UAE government, successfully mitigated and relaxed various employment and immigration laws, to navigate thousands of businesses through extraordinary times. The motivator being to best protect and preserve the country’s skilled workforce and business assets.
This environment is an employment lawyer’s dream.
2022 brought with it sweeping changes to the UAE employment regime. Federal Law No 8 of 1980 (as amended) (‘Old Labour Law’) was repealed in full and replaced with a rejuvenated and progressive labour law in the form of Federal Decree Law No 33 of 2021 (the ‘New Labour Law’) and supplemented by Cabinet Resolution No 1 of 2022 (the ‘Executive Regulations’). This is the first major change of the UAE labour laws in over 40 years aligning the UAE with other global labour laws and practices. It is an exciting and welcomed change for both employer and employees alike.
Supporting the UAE government’s vision, the change advances the region further in its quest to ensure a labour market in the UAE that empowers Emiratis and attracts talent from around the world.
The New Labour Law introduces a statutory protection for employees against all forms of discrimination in the workplace, and has increased employment rights and protections for women including a long overdue extension of paid maternity leave and options of taking increased unpaid maternity leave while also addressing parental leave for the first time. The increase in employee benefits under the New Law is a positive step to ensure retention of the regions existing elite employment talent while marketing itself as an attractive option for those considering viable potential emigration options.
In the event that discrimination, bullying or sexual harassment is found to be in a workplace, no explicit remedy is provided under the New Labour Law for the employee as yet, however, employers may be liable for fines ranging between AED 5,000 and AED 1,000,000 with a possible multiplier effect for the number of employees affected by the breach. The next year will prove challenging for the employment lawyers in the region as we navigate the practical hurdles of understanding the approach the labour court will take in its evaluation of what constitutes discrimination and how this must be demonstrated.
2022 also embraced comprehensive immigration law changes with the introduction of many varying forms of visa residency options and flexible working options.
Historically all expatriates, in order to lawfully reside and work in the UAE, required to be sponsored by a locally licensed and registered entity for UAE work permit and residency visa purposes. Such sponsorship was both employer and location specific, entitling the employee to work only for their sponsoring employer and at the premises under which their visa has been obtained. The UAE’s employment regime was inextricably linked to the immigration regime which was itself fairly static (very limited exceptions applied). Self-employment and consultancy were not permitted, for any individuals, within the narrow confines of the framework established by the Old Labour Law and Federal Law No 6 of 1973 (as amended) (the ‘Old Immigration Law’). As a result of that framework, with only a few limited exceptions, any expatriate who sought to take up employment in the UAE must be sponsored and employed by a licensed UAE entity. However, with the arrival of a new immigration law, namely Federal Decree Law No 29 of 2021 Concerning Entry and Residence of Foreigners (‘Immigration Law’), we saw immigration procedural requirements relaxing with the UAE Cabinet also approving the Executive Regulations to Federal Decree-Law on Entry and Residence of Foreigners (the ‘Regulations’).
The Regulations introduce a plethora of new, flexible visas to the UAE and residency permits which include benefits for individuals and their families. The introduction of the new system is a welcome initiative that will be of particular interest and benefit to investors, skilled employees, freelancers and their families. It will attract and retain talent to the UAE, along with easing the red tape burden of moving country.
The UAE has demonstrated a commitment to adapting its employment laws to keep pace with societal changes and global trends. As a result, the legal landscape continuously evolves, addressing emerging issues such as remote work, digital transformation, and diversity and inclusion in the workplace. Overall, the dynamic nature of the employment law landscape in the UAE ensures that both employers and employees can navigate the evolving challenges and opportunities in the world of work, making it an exciting environment for all who live and work here.
About our Employment team
Hadef & Partners is an independent, full-service business law firm with local knowledge and experience, along with international expertise, providing comprehensive, multidisciplinary legal advice specific to the jurisdiction of the UAE. Founded in 1980 by Dr Hadef Al Dhaheri, the former UAE Minister of Justice, the firm is consistently instructed on all manner and aspects of regional and multi-jurisdictional matters in the UAE onshore and the varying free zones throughout the UAE.
Our market-leading and award winning employment team offers a range of legal services for international and regional employers in all sectors and for the entire life cycle of the employment relationship. The team’s six lawyers advise on immigration and residency rules, Ministry of Human Resources and Emiratisation, staff benefits and incentive schemes, redundancy and termination management, end-of-service gratuity settlements, drafting and remodeling of service contracts and all other kinds of employment contract documentation, carrying out investigations in respect of suspected fraud/misappropriation of funds in an employment context, and representation in employment disputes in both the Dubai Courts and DIFC Courts.
Originally published at Legal 500 In-House Lawyer Summer 2023 Magazine. To view the full report please click here.
To view the full magazine, please click here.