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The United Arab Emirates (UAE) is a federation of seven states — Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah, Ajman, Umm Al Quwain and Fujairah. Employment is a matter for regulation at federal level, and the principal item of legislation is the Labour Law (Federal Law No. 8 on the Organisation of Labour Relations), accompanied by a range of Ministerial Decrees and Resolutions. The Labour Law generally applies to employment relationships throughout the UAE, excluding the public sector, domestic servants and many agricultural workers, though the situation is complicated by the existence within the federation of around 35 “free zones”. These are areas where companies can operate under specific rules on matters including foreign ownership, taxation, repatriation of profits/capital and, in some cases, employment. Free zones are established by individual emirates, with Dubai especially active in this respect.
Two free zones, Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC), have entirely distinct legal systems (based on the common law) and their own employment legislation (replacing the UAE Labour Law) — specifically the ADGM Employment Regulations and DIFC Employment Law. The other free zones are broadly covered by the provisions of the UAE Labour Law. However, in some cases the rules and regulations governing these zones contain provisions on employment that differ to some extent from the Labour Law. The main areas of difference relate to the employment of foreign and UAE nationals, payment of wages, health and safety, and termination of contract.
In this article, we provide information on the employment legislation applicable to the UAE as a whole, and briefly note areas where the rules in free zones (except ADGM and DIFC) differ from these general provisions, referring mainly to the examples of Abu Dhabi Media Zone (ADMZ), Dubai Airport Free Zone (DAFZ), Dubai Healthcare City (DHCC), Dubai Multi Commodities Centre (DMCC), Dubai Silicon Oasis (DSO), Jebel Ali Free Zone (JAFZ) and Ras Al Khaimah Economic Zone (RAKEZ). As ADGM and DIFC have their own separate employment laws, we summarise their provisions in a table at the end of each section.
Only around 20% of the population of the UAE consists of UAE nationals, with the rest made up of migrants/expatriates, and the proportion of UAE nationals in the private sector workforce is very low (often estimated at under 1%). In this context, a range of “Emiratisation” statutes and programmes seeks to increase employment levels among UAE nationals, for example by giving them priority in recruitment and special protection against dismissal. These are not generally applicable in the free zones.
This topic refers only to the private sector.
Temporary COVID-19 Crisis Measures (as at 5 June 2020)
During the Covid-19 pandemic, the federal Government has taken a number of temporary employment-related measures. It has required private sector employers, except in certain key sectors, to limit the number of employees physically attending work to a minimum, and no more than 30% of the workforce. Other employees are generally expected to work remotely and the Government has stipulated the obligations of employers and employees in respect of such remote working. In order to protect jobs and businesses, employers can, with employees’ agreement, temporarily cut their pay (any permanent cut requires the approval of the public employment authorities) or place them on unpaid leave. In the case of expatriate employees, under a temporary “early leave scheme” they may return to their home country (at the employer’s expense) during unpaid leave and return to their jobs afterwards. Various measures have been taken to assist non-UAE nationals who lose their job because of the crisis.
Key points you need to know on this topic.
Detailed information on all matters in this topic.