The New UAE Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations ("New UAE Labour Law") took effect on February 2, 2022. The preceding Federal Law No. 8 of 1980 (as modified) ("Federal Law No 8 of 1980") will be replaced by the New UAE Labour Law. Except for free zone enterprises in Dubai International Financial Centre and Abu Dhabi Global Market, the New UAE Labour Law applies to all private sector establishments in the UAE. It makes several reasonable modifications that improve the working environment. The UAE has proved its commitment to aligning its labour laws with internationally recognized norms and evolving market practises with this tremendous achievement.
This article gives an overview of some of the essential articles of the New UAE Labour Law about employee dismissal without cause (Article 44) and employee suspension for a limited period (Article 40). It compares the above two articles to the provisions of Federal Law No. 8 of 1980, highlighting the New Labour Law's revisions.
Grounds for the termination of employment contract under new UAE Labour Law
The termination of employment contract may take place in any of the following situations, as per Article 42 of Federal Law No 33 of 2021 (the New UAE Labour Law):
- Both parties must agree in writing to the termination.
- When the contract's term expires, unless it is extended or renewed following the contract's terms.
- Upon either party's request, provided that the conditions of this agreement concerning termination of the employment contract and the notice time agreed upon in the contract are followed.
- If the contract's matter is tied to the employer's entity and the employer dies.
- The worker's death or complete and permanent incapacity to work, as evidenced by a medical entity certificate.
- A final judgement against the worker, with a freedom-restricting penalty of at least three months imposed.
- Permanent closure of the enterprise in line with applicable state legislation.
- Any economic or exceptional circumstances that prevent the project from continuing in conformity with the requirements, regulations, and procedures prescribed by the Implementing Regulation and the applicable State law.
- For reasons beyond the employer's control, the worker's inability to meet the criteria for renewing his or her work permit.
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Grounds to terminate a worker without notice
Article 44 of the New UAE Labour Law governs the prompt dismissal of employees without cause. It specifies ten (10) grounds to terminate a worker without Notice by the employer, which are as follows:
- If an employee pretends to be someone else and presents fake certifications or papers;
- If an employee makes an error that results in severe losses to the employer or intentionally causes harm to the employer's property, and the employee admits it, and the employer reports the event to the Ministry of Human Resources within seven (7) working days of becoming aware of it.
- If, despite being aware of the requirements, the employee violates the establishment's rules and regulations about work or safety measures;
- If an employee fails to meet his or her contractual obligations and fails to correct the problem despite receiving two warning letters from the employer and a formal investigation into the matter;
- If an employee discloses secret knowledge about industrial or intellectual property, resulting in a loss of income for the business, a loss of opportunity for the employee, or a personal gain for the employee;
- During working hours, the employee was drunk, under the influence of drugs or psychotropic substances, or engaged in workplace behavior against public morality.
- During the course of his or her employment, the worker assaulted the employer, the manager in charge, one of his or her superiors, or coworkers, using words, actions, or any other form of assault criminal under state law.
- The employee was absent for more than 20 days in a row or more than seven days without a reasonable cause or explanation recognized by the employer over the previous year.
- The employee unlawfully used his or her position to acquire personal benefits and outcomes.
- The employee transferred to another company without following the regulations and processes.
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Suspension for a limited time
The New UAE Labour Law's Article 40 addresses temporary employment suspension. The temporary suspension was provided by Article 112 of the preceding Federal Law No. 8 of 1980. Unlike Federal Law No. 8 of 1980, the New Labour Law defines an employer's method to suspend an employee from work temporarily.
On the question of temporary suspension from employment, the following are the main differences between the two statutes:
The need for the highest standards in employment practice is taken into account by the New Labour Law. Its goal is to promote the most advanced industrial advancement and labour market efficiency. The New Labour Law is a watershed moment in ensuring that employee and employer interests are balanced.
- Position under New UAE Labour Law
According to the New UAE Labour Law, an employer may temporarily suspend an employee for a maximum of thirty (30) days to conduct a disciplinary inquiry. The employee will be suspended but will be paid half their salary during this time. If the employee is not found guilty of the infraction, the employee is entitled to wages throughout the suspension time.
It is a significant difference since Federal Law No. 8 of 1980 did not stipulate a time limit for the employer to finish the inquiry. It further indicates that the suspension period begins on the day the occurrence is reported to authorities and ends until the authorities judge the subject. Similarly, the Federal Law No. 8 of 1980 did not specify that the employee is paid half salary while the employer conducted an inquiry.
Without a doubt, the New UAE Labour Law considers the need for the highest work standards. Its goal is to help the labour market achieve the highest industrial growth and efficiency levels. The New Labour Law is a watershed moment in balancing the interests of employees and employers.
For any labour-related issues, please don't hesitate to contact HHS Lawyers and Legal Consultants Top Labour lawyers in UAE team.