Here's all you need to know about the UAE labour law
As an expat in the UAE, you need to keep yourself informed and abreast of your rights and responsibilities surrounding employment in the country. The UAE follows the Federal Law No. 8 of 1980 on regulating labour relations.
In 2006, The Dubai Government came up with a landmark Human Resources Law for government employees that include code of conduct, work environment, recruitment and employment policies and compensation and benefits.
Khaleej Times capsules the labour law's stipulations on employee disciplinary rules, termination, their rights and end-of-service settlements, so you don't have to read through the fine print.
Article 102 of the labour law states that disciplinary rules may be imposed by the employer or their representative in the following forms:
Suspension with reduced pay for a period not exceeding 10 days
Deprivation from or deferment of periodic bonus (if such bonuses are applicable in your company)
Deprivation from promotion
Dismissal from work, without affecting end-of-service gratuity
Dismissal from work, with total loss of end-of-service gratuity or a part of it
The law includes safeguards to protect the employee's cause and welfare as well. For instance, the above mentioned fine may not exceed the equivalent of the employee's pay for 5 days (Article 104), and such fines may only be imposed once a year (Article 106). A work promotion also cannot be withheld for more than one promotional cycle (Article 107).
Any of the Article 102 rules can only be imposed on the worker after issuing a notice with details of the charges against them in writing, and only after having heard them out first and the reasons investigated (Article 110). Any such disciplinary action also has to be taken and issued within 30 days of the discovery or allegations made (Article 111).
Know the termination laws
1. When can an employment contract be terminated?
a) If both parties agree to cancel the contract, with the employee's consent given in writing.
b) If the contract period expires, unless it is explicitly or implicitly extended according to the law.
c) If the contract period is unspecified and any party wish to terminate it, provided they stick to the acceptable grounds and provisions surrounding contract termination (Article 113).
2. What happens in case of death or disability of the worker?
The employment contract cannot be terminated in the event of the employer's death. However, it can be if the employee dies or is completely disabled, with approved medical certificate given by the country's health authorities (Article 114). In case of partial disability, and the employee can continue to do tasks within their capacity, they should be retained or moved to such a job role, without any effect on their rights or compensation.
3. What happens if the employer or employee terminate the contract before its end-date?
If the employer does it, they are to compensate the employee with an amount not more than their 3 months' total salaries, or for the remaining period of the contract, whichever is shorter (unless the contract states different rules), according to Article 115. The same applies in vice-versa if the employee cancels the contract (Article 116).
4. When can the employer dismiss the worker without prior notice?*
a) If the employee assumes a false identity or nationality, or submits false certificates or documents
b) Within or at the end of the employee's probation period
c) If the employee makes errors resulting in major material or financial loss to employer, and the Labour Department is informed of it within 48 hours of the incident
d) In the event of violation of safety or workplace rules, communicated in prior to the worker clearly
e) If the employee fails to perform his or her duties as stipulated in the contract, and not improve their performance in spite of warnings
f) If they reveal any confidential information regarding the company or workplace to the public
g) If they are charged with a crime of honour, honesty or public ethics by a court
h) If found under the influence of alcohol or drugs during work hours
i) If they assault the employer, manager or coworkers
j) If they are absent without leave or valid cause for over 20 non-consecutive working days in a year, or over 7 consecutive days
(*all under Article 120)
NOTE: A crucial point here is the employee's termination will be deemed arbitrary if the cause is not work-related, and especially if it follows any serious complaint or claim filed by the employee against the employer to valid authorities (Article 122). In this case, the employee has to be compensated as assessed and ruled by the court, based on factors such as type and duration of work and damage caused to the worker. The worker is also entitled to their gratuity in such cases (Article 123).
5. When may the employee quit work without notice?
If the employer breaches their contractual obligations made to the worker, or if they or their legal representative assault the worker (Article 121).
6. Things the employer may NOT do:
a) Terminate employee for medical unfitness before their medical leaves are exhausted (Article 124).
b) Deny the employee (if the latter requests, or at end of contract period) the certificate of the end-of-service settlement, with details of joining/leaving dates, type of work, last paid salary and benefits; hold back any of the employee's certificates, documents or items at the end of contract (Article 125).
c) Take up other employment if they leave work without valid cause (with or without notice given) before the end of contract period (for non-UAE nationals only), for 1 year from the date of leaving (Articles 128, 129).
7. Things the employee may NOT do:
a) If the work involves meeting clients or the knowledge of business secrets, they cannot take part in any activity that competes with the employer's interests after the contract period (if agreed upon with the employer beforehand), and such a period may only be for a limited period of time, only allowing for the legal interests of the employer. The employee also has to be 21 years of age or over for this to apply (Article 127).
8. What are the rules on repatriation of the worker after contract termination?
a) The employer has to bear the expenses of repatriation to the location from where the employee was hired. This includes their travel ticket, and any contractual obligations on travel expenses for their family, cost of shipping of personal items etc.
b) If the termination is attributable to the worker, the latter has to be repatriated on their own expense (Article 131).
c) If company accommodation is provided, the employee has to vacate it within 30 days from date of termination, provided the employer pays the above expenses, end-of-service settlements or any other entitlements as previously agreed upon.
Making a compensation claim
If an employee contests the end-of-service settlements and repatriation expenses in court against the employeer, the labour department will specify these entitlements in a week from the date of notification. The employer then has 30 days to pay up these amounts to the Ministry of Labour. The labour law does not prejudice the right of the worker in contesting such compensations in court.
How the end-of-service (or) severance pay is calculated:
According to Article 132 of the UAE Labour Law on the calculation of gratuity/severance pay:
An employee who has completed 1 or more years of continuous service is entitled to severance pay
The amount is calculated as 21 days' basic pay for each of the first 5 years of employment; 30 days' basic pay for each extra year of service, provided the total pay does not exceed the employee's 2 years' pay. The calculation does not include any allowances (like housing, transport, travel, overtime etc), other benefits or bonus.
If the worker is under an indefinite contract term and leaves work after continuous service of not less than 1 year and not more than 3 years, he or she is entitled to one-third of the severance pay.
If the employee quits after continuous service of more than 3 years, up to 5 years, they get two-third of the severance pay.
If a worker under a definite term contract quits before the contract period expiry, they are not entitled to severance pay unless they have worked 5 years.