Starting a company in the UAE may expose you to a slew of regulations related to the region’s commercial legal framework, which can be overwhelming. While emphasising employee-employer associations and the sequence of regulations that follow them – including ministerial decrees, UAE labour legislation, and so on – the UAE also stresses the importance of collective bargaining in the workplace.
The UAE Federal Law No. 8 of 1980, formally known as the Regulation of Labour Relations, the UAE Federal Laws No. 24 of 1981, No. 15 of 1985, No.12 of 1986, and the ministerial decrees issued over the years are some of the most important laws mentioned. Special economic zones also have their own employment regulations. In any case, these regulations do not constitute a challenge to the Labour Law, but rather serve to benefit the workers. The regularisation of visas, as well as the UAE’s immigration directives and decrees, are all beneficial to those seeking work in the country.
These organisational measures, as well as the UAE’s Labor Law, may be a time-consuming procedure with a plethora of parts, changes, and updates that occur often. Taking these essential aspects into account by an employer before hiring an employee is always preferable since it ensures that the employee will operate in the best interests of the business.
The following are the Core Principles that every employer should be aware of:
The Labor Law of the United Arab Emirates
Employee-employer associations are recognised under UAE Labor Law, which takes these criteria into consideration. The law establishes guidelines for employment contracts, as well as restrictions on employment terms, the maintenance of documents, wage directives, working-hour regulations, leave procedures, employee safety, protection, medical and social welfare, codes of conduct and discipline, the termination of employment contracts, reimbursement for occupational issues, labour examinations, and employment law.
Considering the concept of sponsorship
The majority of businesses in the United Arab Emirates fund their workers’ visas, airline tickets, and other travel expenses (under circumstance companies also offering accommodation, food etc.) Nonetheless, the most important element to remember as an employer is that the acts of employees, including liabilities and misconducts, become the responsibility of the organisation. The employer is thus responsible for ensuring that the employee has a ticket to leave the country or has been transferred to another person’s sponsorship at the conclusion of the employment relationship.
Visa for Temporary Employment
This is one of the most important principles to consider when selecting someone. An employer may only appoint someone who has obtained an employment visa — and in most instances, the employer is the one who sponsors the visa application. However, there are a few exceptions to this regulation, such as people on a spouse visa, students, and part-time workers, among other things. The employer that is exposed to the practise of hiring people who do not have an employment visa or who have an erroneous visa is liable to severe monetary penalties – including prison time – and, in certain cases, expulsion from the United States.
The Employment Contract is a legal document that governs the terms and conditions of a person’s employment.
When it comes to employment contracts, they are very essential since they provide reality to the connection that exists between an employer and an employee. In all economic zones, an employment contract approved by the government is binding on both parties involved. Companies may also have their own employment contracts, which may include additional rules, limitations, and reimbursement provisions. In the case of a disagreement, these papers must take precedence and act as controlling instruments.
Exiting the Company and Receiving Compensation:
The most contentious aspects of the work relationship in the United Arab Emirates are those relating to termination and compensation. Unplanned and/or unjustified terminations are classified as premature and/or owing to a specific reason in several categories. Furthermore, the amount of compensation is decided by the conditions of the termination agreement. Whatever the situation, reaching a mutually beneficial agreement with the employee may be difficult for the employer at times.
It is important for the employer to be aware that there are primarily two kinds of termination notice that may be provided to an employee: formal and informal. The first is the premature termination, which is subject to a one-month notice period under the terms of the Employment Act. The second kind of termination is for reason, and it is administered in accordance with Article 121 of the Labour Law – under which the employee may be dismissed immediately. It also says that the employee is to blame for a breach of the rules and regulations. According to Article 121, the employer is not obligated to provide the employee with any further notice or compensation.
Services have come to an end.
As an employer, you should be aware that in the United Arab Emirates, workers are compensated for the time they have spent on the job. Companies offer workers with interim income to which they are entitled according to the terms of the contract, which is typically one year of continuous service after the conclusion of the service period. For the first five years of employment, an employee is entitled to 21 days of basic pay for each year of service. After that, the employee is entitled to a wage increase. When you reach your fifth year of service, your end of service benefits increase by 30 days for every subsequent year of service. Despite the fact that variables such as commissions, bonuses, and increases into the basic pay are entirely dependent on the business and are computed on a regular basis as end of service rewards, they are not included in the basic wage.
To learn more about your benefits as well as your responsibilities as an employer, get in touch with Generis Global now! We help you with all of the formalities associated with hiring a new employee, including recruiting processes, employment contracts, employment visas, transfer visas, and aid in understanding UAE labour regulations, among other things.