Regulating Labor Relations Published Date: 30 Jan 2023

The new UAE labor law has introduced positive changes to enhance the competitiveness of the UAE’s economy and attract new talent to the local market. Some of the key new improvements include the following:


The old labor law set out just twelve definitions. This has now been expanded in the new Labor Law to include a total of twenty-one definitions. Most  notably, these include definitions of terms such as the private sector, the probationary period, the notice period, the workplace, an employee’s family, and medical facilities. Many of  these definitions can be important to know when interpreting some of the texts contained in the new Labor Law, and make it easier to understand the purpose and meaning of the new provisions.

Equality and Non-Discrimination:

Article No. (4) of the new law has also introduced new concepts such as equality and non-discrimination, whereby discrimination between individuals working in a facility on the basis of race, color, nationality, religion, national origin or social origin is prohibited.  In addition, Article 4 provides for equal opportunities between individuals by reference to relevant efficiency criteria only.

Types of work:

The Law has also recognized, through Article No. (7), varying patterns of work practice, addressing full- time work, part-time work, temporary work, and flexible work. These patterns      of work were not recognized under the old labor law, and moreover, each of these working  relationships has its own terms and provisions that are regulated by law.

Probation period:

Article No. (9) of the new Labor Law addresses probationary periods, which are not to exceed six    months. The new Law has created a notice period requirement of (14) fourteen days when terminating employment during a probationary period. In the event that an employer does   wish to terminate a work contract during a probationary period,  to protect the employee, such that they are to be given an adequate opportunity to organize their affairs. This is unlike the position under the old law where a contract could be terminated during the probationary period without notice.

Similarly, the new Law has introduced an employee’s right to transfer to a new employer during the probationary period. However, in such a case, the employee is required to give the employer (30) thirty days’ notice, before the end of the probation period, as specified in the third paragraph of Article No. (9). In addition, the new employer is obliged to compensate the old  employer for the costs of recruiting and contracting the employee.

The Law has also introduced an employee’s right to terminate their employment contract  during a probationary period on the ground that they are leaving the country.

Minimum wage:

Article No. 27 of the new Labor Law has introduced a minimum wage system and given the Council of Ministers the right to issue a regulation on minimum wages. This is a new system that has been introduced in line with economic developments to ensure a minimum standard of decent living for employees.

Employment contract:

The new Law has also introduced a system of fixed-term employment contracts, and in the process, abolished the old system of indefinite employment contracts. In this regard, a contract of employment is to be for a specified period of (3) three years, subject to renewal with the agreement of the parties for one or more period(s). This follows Law No.14 of year 2022, which amended the text of clause No. (3) of article No. (8) of the paired law, and states that a work contract is concluded for a specific period subject to renewal, in line with what is agreed upon by the two parties concerned.

Miscellaneous holidays:

A system of various absences from work has also been brought in – this was not in place before except within relatively narrow limits. Article No. (27) of the Labor Law provides for a five-day mourning leave (in the event of the death of a spouse), and a three-day period of leave in the event of the death of a parent or child. Introduced as well was a period of five working days of parental leave to which either parent is entitled for the care of their newborn, whether continuous or intermittent, during the first six months of the newborn’s life.

Study leave of up to ten working days per year is also now available for an employee affiliated with a university or school for the completion of their studies.

Compensation for work injury:

Article No. (37), paragraph (3) of the Labor Law also introduced the concept of compensation for work related injuries in an amount of two hundred thousand Dirhams. This is a clear improvement in the position of an employee, which takes into consideration the economic conditions of the employee in seeking to enable higher benefits and better living conditions.

Notice period:

Article No. (43) of the new Labor Law has introduced a notice period of not less than thirty days and not more than ninety days, and stipulated that work is to remain ongoing during this period. It also provides an employee with the right, if termination is by their employer, to be granted one day of leave each week to be used for searching for an alternative job.  In this regard, the employer must be given three days advance notice and each day of leave is deducted from the employee's wages. In introducing this provision, the legislator has sought to balance the interests of the employer and the right of an employee to search for alternative employment while on notice.

Termination of service on grounds of health or for a lack fitness-to-work:

The new Labor Law prohibits an employer from dismissing an employee on the grounds of health, before the employee has exhausted his entire leave as specified in this Law (Article No. (46)). It also deems a nullity any  agreement that is contrary to Article 46, even if it existed prior to the implementation of this Law. This provision effectively works to guarantee an employee’s rights under the Law when issues of health arise.

Continuity of Employment Contracts:

Article No. (48) of the new Labor Law has introduced a provision ensuring the continuity of valid employment contracts in the event of any change in the form of the establishment that has contracted with the employee.  Article 48 also requires a new employer to implement existing contracts on an ongoing basis in accordance with the provisions of the Law, and not to seek to repudiate  their implementation.

End of service benefits:

Pursuant to Article (51) of the new Labor Law, the calculation of an end-of-service gratuity for full-time employees is required as per the following:

  • Twenty-one (21) days for the first five years of service
  • Thirty (30) days for the following years of service (i.e., post-five years)

Payment of final settlements and full dues must be paid by the employer within 14 days of the termination of the employee’s employment as per Article No. (53) of the Constitution.

Settlement of situations:

Article No. (68) of the new Law requires employers to reconcile their employment conditions, and to convert indefinite-term employment contracts into fixed-term employment contracts within a period of one year from the date the Law came into force. The law entered into force on February 2, 2022 , and therefore the year’s grace period ends on February 1, 2023, at which point fines will be applied to violators – provided that the period has not already been extended by His Excellency the Minister of Labor in implementation of the text of Article No. (63) of the    same law.