The UAE Labour Law is the foundation of regulations governing workplace competence. Whether you are an employer running your own company or an employee taking on a new job, understanding the provisions of contracts, probation, pay, working hours, and termination is essential. By integrating ERP Dubai solutions, businesses can better manage employee records, payroll, and compliance in line with UAE Labour Law. The law safeguards both parties to ensure fair, transparent, and friction-free relations between employers and employees.
The entire guide provides a deconstruction of the UAE Labor Law into understandable forms, including, but not limited to, employment contracts with work visa, and useful commentary on the relevance of these rules in normal working life.
Employment Contract
An employment contract in the UAE forms the legal bond between employer and employee. The law requires all contracts to be in writing and approved by the Ministry of Human Resources and Emiratization (MOHRE).
There are two main types of contracts:
- Limited-term contracts – with a defined end date.
- Unlimited-term contracts – ongoing until one of the parties terminates them with adequate notification.
All contracts should specifically address employment status, salary compensation, benefits, probation or trial period, work hours and conditions, leave policy, termination. Anything extra in the agreement is subject to a unilateral decision of the employer.
Work Arrangement Types:
The UAE recognizes flexible ways of working to meet modern business needs:
- Full-time – traditional 8-hour daily or 48-hour weekly schedule.
- Part-time – employees can work for more than one employer with MOHRE approval.
- Temporary work – employment tied to specific projects or timelines.
- Flexible arrangements – variable working hours or tasks based on employer needs.
- Remote work – an emerging phenomenon, especially for knowledge-based employees
These employment structures offer greater flexibility to employees and budget-friendly staffing options for employers.
Probation Period in the Private Sector and Public Sector:
The probation period allows both employer and employee to assess fit before permanent commitment.
- In the private sector, probation cannot exceed 6 months. Employers must provide at least 14 days’ notice if terminating during probation. If the employee wants to leave, one month’s notice is required (or 14 days if leaving for another UAE-based job).
- In the public sector, probation rules vary slightly depending on the government entity but generally also follow a six-month cap.
Extending probation beyond six months is strictly prohibited under UAE Labour Law.
Working Hours and Holidays
- Working Hours
As per the law, following are the daily and weekly working hours measures are mentioned to the letter:
- Private sector:
Hours of work can’t be more than 8 hours a day or 48 hours a week and there is a necessary break after 5 hours of continuous work. Working hours are reduced by two during the month of Ramadan (Holy month).
- Public sector:
Employees working hours are usually lesser, the number of hours varies from 7 to 8 per day. It also differs depending on the authority.
Overtime is paid to the employees of the private sector who work extra than the standard working hours and night shifts or rest days will be at a higher rate.
- Leaves and Holidays
As per the UAE Labour Law, Employees are allowed to take different kinds of leaves:
- Annual leave:
30 calendar days after the completion of the first year of service.
- Sick leave:
90 days per year at the most, full pay for the initial 15 days, half-pay for the next 30 days, and no pay for the rest of the time.
- Maternity leave:
60 days (45 fully paid + 15 half-paid), an extension is also possible.
- Paternity leave:
5 working days out of the initial 6 months after the child is born.
- Public holidays:
Paid leaves that are given to the employees on official events like Eid Al Fitr, Eid Al Adha, National Day, and the others.
Employers can’t subtract any public holiday from the employees’ annual leave.
Wages:
The Wage Protection System (WPS) helps to get accurate and timely payment of salaries. Employers must:
- Payment of salaries through WPS to a UAE based bank.
- make direct payments (typically monthly) on agreed dates
- Include pay slips with deductions, allowances, and bonuses
Deductions can only be made for legitimate purposes, e.g., fines for misbehaviour, repayment of loans, etc. Failure to implement WPS is heavily penalized against employers.
Health and Safety:
The UAE Labour law states the importance of workplace health and safety. Employers have a legal duty of care to:
- Ensuring a safe working environment.
- proper equipment, protective gear, and training in place
- Reporting and payment of workplace injuries or accidents
Right to refuse unsafe work if it involves danger to life and health; and This qualification meets the global standards of occupational health and safety.
Non-Compete Restrictions:
Employers are free to include non-compete provisions in employment contracts as a means of protecting business interests. These types of clauses simply stop employees from operating a competing business or competing with the employee’s new business in a specific territory within a certain period of time following their departure.
However, restrictions should be reasonable as to time (maximum 2 years), location and kind of work. Courts sometimes get rid of overly limiting clauses.
- Termination and Employment:
Termination procedures are strictly regulated:
- Valid termination:
For legitimate reasons such as poor performance, misconduct, redundancy, or mutual agreement.
- Notice period:
30 to 90 days depending on the contract.
- Wrongful termination:
If an employee is dismissed without valid reason, they can claim compensation.
Employees are entitled to end-of-service benefits, including gratuity pay, based on years of service, unless dismissed for gross misconduct.
- Work Permits and Visas
To legally work in the UAE, expatriates need both a work permit and a residency visa. The employer typically sponsors and arranges these.
The process involves:
- Entry permit for employment.
- Medical fitness test.
- Emirates ID registration.
- Issuance of residency visa and labor card.
Without these documents, working in the UAE is illegal and punishable with fines or deportation.
The way SowaanERP helps to comply with the UAE Labour Law:
Businesses may find it difficult to remain within the confines of the UAE Labour Law, particularly when it comes to dealing with contracts, wages, leaves, and work permits. SowaanERP makes it easy by integrating HR and payroll solutions which automatically conform to legal requirements. Creating employment contracts that are MOHRE compliant, monitoring probation, the balance of leaves, calculating gratuity, and a stable payment of salaries through the Wage Protection System (WPS), SowaanERP is one of the sure methods to minimize the number of errors and punishments. This is not only a way of ensuring compliance, but also is time and energy saving and creates trust with the employees.
Final Thoughts:
The UAE Labour Law is a well-balanced system for the employer and the employee. By learning contracts, work terms, probation, wages, and firing rules, both sides can be kept off of each other’s backs and act with fair treatment. For expatriates, good work permits and familiarity of expats’ leave working rights, safety, and gratuity are the key to leading a comfortable career in the UAE.
