UAE New Labour Law


Reminder: The New Labour Law is now effective in the UAE

Amidst the pandemic, the UAE is currently witnessing a fast-evolving tax and legal landscape with the introduction of New labour law, commercial company law, corporate tax regime, types of visas, data protection laws and much more. These developments aim to be in line with the international best practices.                                                                                         

Yesterday, 2 February 2022, was a landmark day in the UAE employment landscape. The New Labour Law i.e., Federal Decree Law No. (33) of 2021 on the Regulation of Labor Relations was officially implemented.

With the introduction of this new law, in addition to the new types of visas introduced last year, UAE aims to attract the best global talent and skills. This is a major step towards ensuring the efficiency of the Labour Market in the UAE. In fact, the new law aims to regulate the legal relationship between the employer and the employee in a balanced way and is adapting to the increasing need for flexibility as required in these challenging times.

We will now look at the most significant amendments, particularly regarding the relevant changes for those employees working in the private sector:


Promoting flexibility and work-life balance

  • Multiple work models have been introduced i.e., full-time, part-time, temporary work, flexible work and more.
  • Should the employee desire to work remotely, whether from inside or outside the UAE, and the employer approves, then certain working hours may be determined to do so.
  • Wages can be paid in UAE Dirhams or any agreed currency.
  • Employees must utilize their annual leave in the applicable annual leave year, unless agreed otherwise with the employer.
  • Additional types of paid leave are introduced such as bereavement leave, paternal leave, study leave.
  • Maternity leave benefits are enhanced and now includes leave during miscarriage / still birth / upon death of an infant after birth / delivery of a child of determination.


Upskilling the employees

  • Employers should ensure their current equal opportunities policies are robust. The new law emphasizes on equal opportunities and non-discrimination.
  • Employer shall invest in developing the skills of their employees.
  • Paid study leave for 10 working days may be granted to an employee who is studying at an accredited UAE educational institution for the purpose of taking their exams, subject to conditions.


Defined role of the employee

  • Employer needs written consent of the employee to assign any work that it is not agreed upon in the employment contract. Once the employee agrees, any resulting cost (relocation, change of accommodation) to perform such work shall be borne by the employer.
  • Employer is required to have an Employee Handbook created which clearly specifies the work instructions, sanctions, promotions, rewards etc.


Employment Contract

  • Unlimited contracts will no longer be recognized. All employees must be employed on fixed term (renewable) contracts of not more than three years in length.
  • Provide an accommodation licensed by authority or housing allowance in cash (or include the same in contractual salary).
  • Non-compete clause may be introduced by the employer not exceeding 2 years. However, such clause does not apply if employer terminates the employment contract.



  • A 6-month probation period is permitted during which time the employer and employee are required to provide 14 days' notice of termination.
  • If the employee wishes to take up new employment with another employer in the UAE, a higher notice period would be applicable. Additionally, the new employer will be obliged to compensate the current employer in respect of the costs of recruiting the employee subject to certain conditions.



  • The formula for computing gratuity has been revised to the benefit of the employee.
  • All end of service entitlements must be paid within 14 days from the termination date.
  • If the employer terminates the contract, the employee shall be entitled to one working day (unpaid) per week during the notice period to search for another job.

Further guidance is expected to be introduced through the implementing regulations. Hence, it remains to be seen how these new provisions will work in practice.

For any further details, please contact [email protected]

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Alok Desai
Alok Desai
Senior Associate - Consulting
Deepika Chandak
Deepika Chandak
Director - Global Mobility & Consulting