UAE: Annual Update – Expected labour law changes in 2016

Employment Contracts

New rules regarding contracts for the employment of foreign workers: With effect from January 1, 2016 a UAE based employer who hires a foreign worker must provide the employee with a written offer letter containing the terms of the standard, unified employment contract. The employer must obtain the employee’s agreement to and signature on the offer letter. Approval of the labour contract by the Ministry of Labour will only be given on the provision of evidence that the employee has accepted the offer letter. No changes to the terms of the standard employment contract will be permitted unless approved by the Ministry.
Action required: Employers should ensure they understand and follow the new procedural rules, building them in to their recruitment process.

Termination of fixed and long-term contracts

Fixed term contracts: Fixed term contracts now cannot exceed 2 years. The contract terminates if: (1) the term expires; (2) the parties agree to terminate; or (3) one party gives the other notice in writing in accordance with the agreed notice period, which shall be not less than 1 month nor more than 3 months.

Where no notice period is specified in the contract, it shall be 3 months. The parties must comply with their obligations during the notice period. The employer must indemnify the employee as agreed in the contract, not to exceed 3 months’ wages.

Non-term contracts: Non-term contracts can be terminated if (1) the parties consent;(2) one party gives the other notice in writing of between 1 and 3 months and bears the consequences of the termination.
Action required: Employers should ensure they understand and follow the new procedural rules.

Work permits

Rules for the issue of new permits following a termination:
A new work permit will only be issued to an employee if the termination of his previous employment meets specified criteria and procedures.
In addition, an employee who wants to move to a new employer will only get a new permit if:
(1) the previous employer has failed to meet its legal obligations under the employment contract;
(2) the employee has filed a complaint that the previous employer has ceased activity for at least 2 months;
(3) the Labour Court has ruled in favour of the employee.
Action required: Employers should make sure they understand these rules if hiring an employee following a termination from their previous employment.