During 2022, several modifications have been implemented throughout the Gulf Cooperation Council states (many of which are now in effect, while others will take effect later in 2023). In this article, the first in a short series addressing these changes, we provide a concise overview of the most significant employment developments that will likely impact UAE employers.
UAE Discrimination / Harassment and Bullying
The UAE Labour Law (Federal Decree-Law No. 33 of 2021 on the Regulation of Labour Relations) was enacted on 2 February 2022. This bans discrimination based on race, color, gender, religion, nationality, social origin, or impairment that would limit an employee’s access to equal employment opportunities or hinder his or her ability to obtain and/or maintain employment.
Significantly, the UAE Labour Law now bans sexual harassment and/or any physical, verbal, or psychological form of abuse by an employer or supervisor/coworkers against an employee. Employers may be held liable for penalties ranging from AED5,000 to AED 1,000,000 for single and repeated law violations.
Therefore, it is crucial to ensure every worker and manager is apprised of the alterations. Specifically, this could be a good time to examine policies and offer training on workplace equality, diversity, and dignity.
Fixed-Term Agreementsby the UAE Labour Law: The deadline for companies to comply with UAE Labour Law has been extended to December 31, 2023, from the Ministry of Human Resources and Emiratisation (MoHRE).
The postponement of the deadline is applauded because it provides employers with additional time to ensure that their employees’ contracts comply with the UAE Labour Law. Even though the MoHRE’s announcement provides employers with additional breathing room, businesses should be aware of the possibility of incurring penalties or fines if these modifications are not implemented by December 31.
Employers who have not yet taken the necessary steps should review and revise the current agreements and engage with affected employees well in advance of the extended deadline, as it is extremely unlikely that it will be extended again. Employers may also wish to coordinate the granting of new fixed-term contracts with the upcoming visa renewal dates of any of their employees.
(source – https://u.ae/en/information-and-services/jobs/employment-contracts-duration-and-models-in-the-private-sector)
Improved Protection Against Work-Related Injuries and Occupational Illnesses
Employers with at least fifty staff members must implement a monitoring system for work-related injuries and occupational diseases, as well as implement preventative tools and conduct periodic health examinations as of January 3, 2019.
In addition, the UAE Labour Law stipulates that employees are entitled to compensation for injuries sustained at work and permanent impairments and affirms that their families are obliged to compensation if the injury results in the employee’s mortality.
Unemployment Insurance Scheme
The UAE unemployment insurance scheme, first announced in October 2022, is intended to provide financial assistance to employees who have lost their jobs. Except for investors, domestic assistants, part-time employees, retirees with a retirement pension, and those under the age of 18, participation in the program is mandatory for all onshore federal government and private sector staff older than 18 years old.
AED20,000 (US$5,445/J4,500) per month in compensation shall be given for three months from the day of the employee’s employment termination, based on sixty percent of their preceding basic salary. The monthly insurance premium for employees with a base salary of AED 16,000 or lower will be $5. Those whose income exceeds AED16,000 will pay AED10 per month for insurance. Employees are eligible for unemployment benefits if they have worked and paid into the insurance scheme for at least 12 months and their job did not end for disciplinary or voluntary reasons.
Commission-based employees are also eligible to enroll in the program. Insured employees are ineligible for reimbursement if they have fled the country or begun a new job immediately. Employees with a labor card issued before January 1, 2023, have till June 30, 2023, to enroll; failing to do so will result in a sanction of AED400. Employees with a labor card issued after January 1, 2023, have four months from the card’s issuance date before being subject to the same penalty. While employers do not have to enroll their employees in an insurance scheme or pay payments to a scheme, from an employee relationships standpoint, employers ought to remind their staff members of their duty to register.
(Source – https://www.mohre.gov.ae/en/laws-and-regulations/laws.aspx)
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