New year changes to the UAE legal landscape – New UAE working week and employment law
The new year brings with it significant changes to the UAE employment regime. Private sector employers are deciding whether to change their working week to follow the public sector and the new employment law enters into force in February implementing fundamental changes to key employment terms.
From 3rd January, the UAE's public sector will change its weekend from Friday and Saturday to Friday afternoon, Saturday and Sunday. There have been no such announcements for the private sector, and it is being left to individual businesses to decide how they wish to proceed. In terms of legislation, Decree Law No. 33 of 2021 on Regulation of Labour Relations (the new Labour Law) provides for the change to the working week, in that, unlike the previous employment law, it does not require Friday to be the weekly day off. Schools are following the public sector weekend and in general, private sector businesses seem to be taking the decision to change to a Saturday and Sunday weekend.
Implementation of the change in the working week for the private sector has its challenges; Friday is the day of worship for Muslim employees and traditionally a time for families to gather after prayers. Some employers are choosing to align with the 4 ½ day working week of the public sector, and increasing the daily working hours to accommodate this, although this needs to be achieved within the maximum permitted working hours, otherwise employers will have to pay overtime. Other employers are giving employees an extended period for lunch on a Friday to allow for prayer times. Careful consideration needs to be given to these decisions and how they are implemented by employers, including the requirement to amend the employment contract which will require employee agreement.
The new Labour Law enters into force in February 2022 bringing with it some fundamental changes to employment terms. Two of the most significant changes are:
- Unlimited contracts will no longer be recognised. All employees under the new Labour Law must be employed on fixed term contracts with a term of no more than 3 years. The contract can be renewed either for the same duration or for a term of less than 3 years. Employers have until 1 February 2023 to convert unlimited employment contracts to fixed term contracts.
- The recognition of different work models; full time, part time, temporary, or flexible work. There is limited information currently available on the different work models and further guidance is expected in the implementing regulations of the new Labour Law which are expected by the summer.
In addition, the new Labour Law introduces greater regulation in the workplace, for example anti-discrimination provisions to combat discrimination in the workplace and protection for employees against inequality of treatment or opportunities in the workplace, among many other developments.
The UAE legal landscape is changing significantly, in addition to the above, a new Federal Data Protection Law has been adopted with an implementation period of six months from the publication of the Executive Regulations which are expected in March 2022. Businesses would be well advised to stay abreast of these developments and obtain advice on how they impact on them. We are advising a number of clients on these developments, if we can be of assistance please contact Stephen Sullivan.