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KARACHI: As the UAE revamps its regulations to remain attractive to businesses and expats – for instance, it is welcoming crypto companies with open arms and has allowed unmarried couples to live together – it has also overhauled its labour laws that come into effect next month.

Many believe one of the most significant changes include employees no longer having to exit the country upon losing their job, as well as more generous maternity leave. The New Labour Law, which completely replaces the Old Labour Law, will impact the approximately 1.5 million Pakistanis that work in the region and who send back millions of dollars in remittances back to their home country every month (the figure for November 2021 was about $452.5 million).

The rules aim to equalise regulations for the public and private sector as the region looks to “establish the best, most flexible and diversified business environment,” said Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister of the UAE, and promote an attractive and sustainable employment market.

One of the questions around labour has been treatment of some migrant workers, including those from Pakistan, with employers sometimes confiscating passports.

However, this may change as protection of workers’ documents appears to be a priority in the new laws, which state that employers are prohibited from confiscating employees’ official documents. They also cannot charge worker recruitment fees.

Additionally, employees will no longer have to pay legal fees when filing labour cases against employers when they are asking compensation that is less than Dh100,000.

The rules state workers cannot be forced to leave the country following the end of their work term, a common complaint among expats.

They will be given 180 days to remain in the country and look for a new job without worrying about overstaying their visa.

The new legislation also puts emphasis on equality and non-discrimination on grounds of race, colour, sex, religion, nation origin, ethnic origin and disability.

In the case of an employee’s death, employers must pay end-of-service benefits and any outstanding amount to the family of the deceased within ten days. The employer will also need to pay the costs of repatriating the body.

Reacting to the unprecedented situation that has resulted from the COVID-19 pandemic, the laws make allowances for “new types of work” including part-time, temporary and flexible work.

The part-time model allows for a person to work for more than one employer while the flexible work model means they can do work that involves changing hours or working days, depending on the workload and the employer’s needs. An employer may also allow people to choose the times that they work.

In practice, though, “these models reflect the common working modes already implemented by many UAE employers and we do not believe that the references to them in the New Labor Law will materially impact employers or employees or the way in which they operate,” The Society for Human Resource Management noted.

The maternity leave entitlement for employees has been increased to 60 days from 45 for any pregnant employee, regardless of length of employment – the first 45 days will be fully paid while for the remaining 15 days they will receive half pay.

In cases where there are health issues for the mother or child, more days can be taken off. Men will get 5 days paternity leave, which they can take at any point during the six months following the birth of their child.

Employees will now also get five days’ leave in the event of the death of a spouse; and three days in the event of the death of their mother, father, and other close relatives. They will benefit from an approximate 35% to 40% increase in their end-of-service gratuity.

The laws could mean working fewer days: a condensed-hours model allows for those contractually employed to complete 40 hours a week to do so in less days, if their employer is on board.

The new law also abolishes the concept of an unlimited term contract and mandates that all employees must be employed on fixed-term contracts that do not exceed 3 years. Such contracts can be extended any number of times. The laws also stipulate men and women must be paid equally, but legal analysis website Lexology pointed out that as with the Old Labour Law, “it is unclear how these provisions will be enforced in practice by the UAE Ministry of Human Resources and Emiratisation.”

What we do know is that fines of up to AED 1million may be imposed for breaches, and this may be more in cases where numerous employees are affected.

Like the current law, the New Labour Law will apply to all companies and employees in the private sector in the UAE, including its free zones, save for the Dubai International Financial Centre and the Abu Dhabi Global Market, which have their own employment laws.

Dr Abdulrahman al-Awar, UAE Minister of Human Resources and Emiratization, said the new legislation is part of efforts to create a competitive work environment as the UAE embarks on its journey towards “the next 50 years”, having celebrated its 50th anniversary last year.

The new laws don’t address all problems with labour laws. For instance, migrant workers in the UAE still cannot form unions and pathways to citizenship and permanent residence are limited. However, they are a step in the right direction.

Copyright Business Recorder, 2022


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