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New UAE labour law explained: What employees need to know before quitting a job

Top UAE legal experts discuss recent updates during employers forum

UAE private sector employees need to give a minimum 14-day notice period to their employees if they plan to resign during the probation period, a top legal expert told audiences in Sharjah on Tuesday.

“During the probation period, employees must give 14 days’ notice to resign if they are leaving the UAE and a one-month notice period if they are leaving to join another employer in the UAE,” said Dr Ahmad Al Shehi, legal expert and head of labour complaints at the Ministry of Human Resources and Emiratization.

Also, where an employee leaves during the probationary period to join another employer in the UAE (or returns to the UAE to work within three months), the old employer may claim the costs of recruitment from the new employer.

Dr Shehi was speaking at the second forum for employers, organised by the Labour Standards Development Authority (LSDA) in Sharjah.

Including the above-mentioned, significant changes have been introduced to family leave entitlements, discrimination laws, termination of employment and ‘non-compete’ clauses in employment contracts drafted after February 2022.

Federal Decree – Law No. 33 of 2021 on the regulation of labour relations in the private sector came into force on February 2 this year. According to the UAE government, the law is designed to enhance employment rights and boost the competitiveness of the Emirates as a place to live and work, helping the region to attract and retain world class talent.

The new law also makes provision for businesses to put in place part-time and flexible working arrangements.

Dr Ali Al Hosani, judge of appeal and manager of technical office at the labour court in Dubai, gave a detailed presentation on ‘termination and ending of work relationships and their legal impact on private sector employees.

Speaking at the opening ceremony, Salem Yousef Al Qaseer, chairman of LSDA, said amendments to the UAE labour law are among the biggest developments since the establishment of LSDA.

“The developments in this law result in a paradigm shift and aims to ensure the efficiency of the labour marketplace and retain an attractive work environment for employees,” said Al Qaseer.

Organisations must have well-defined aims and objectives

According to Dr Shehi, it is of utmost importance for organisations to have cleat aims and objectives. “The end goal of creating a stable labour work environment by attracting skilled and talented work force is national development. While facilitating the rights of employees, we reach comprehensive national development,” he explained.

The aims, according to Dr Shehi, must have flexibility and agility as well. “It needs to meet market requirements and needs of the employers and employees as well,” he added.

Here are some key takeaways from forum:

What are the key changes in the probation period protocols?

According to Dr Shehi, the maximum six-month probationary period remains. However, employers must give 14 days’ notice to dismiss their employees. Earlier, no notice required from either party to terminate the employment

However, in the new labour law, employees must give 14 days’ notice to resign if they are leaving the UAE, and a one- month notice required if they are leaving to join another employer in the country. “Where an employee leaves during the probationary period to join another employer in the UAE (or returns to the UAE to work within three months), the old employer may claim the costs of recruitment from the old employer,” he explained.

What are the clauses of non-competition in the labour laws?

Previously, non-competition clauses were permitted, with no stated maximum length. “The maximum permitted length was generally considered to be 12 months,” explained Dr Shehi. However, the new laws stipulate that non-competition clauses can be used and can last up to two years in length.

“The new laws have put in place a few standards that protect both the employer and the employee. The clauses for non-competition must not harm either party in a severe way. The clauses are also subjective to whether the employee is subject to company’s sensitive information,” he explained.

According to Dr Shehi, the restriction must go no further than is necessary to protect a legitimate business interest requiring that it is limited in terms of geographical location, type of work and length.

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The law sets out the circumstances in which post-termination restrictions will unenforceable including where, for example, the employer terminates the employment in breach of its legal obligations due to the employee.

Restrictive covenants can be set aside where any of the following occur: the parties’ written agreement; the new employer or the employee pays up to three months’ compensation to the old employer (subject to the old employer providing their written consent); the employee is terminated during their probationary period; or as may be deemed appropriate in light of labour market needs.